3 Ways to Help Your Finance Team Add More Value

For your team to develop these abilities, it will take some time. They will need to be better politicians in the workplace,and master these three critical skills. Are you ready to learn how to do it? Let’s begin.

To get this started, let’s make an assumption. The assumption is that the finance team members you are targeting to “tell us why and drive it” have core financial analysis skills. They can put together a discounted cash flow, read and interpret financial statements, prepare financial models, and do “what if” analysis. They can access the necessary data, and run models to twist and cut it.

The skills of facilitation, teamwork, communication, and driving strategy are tougher to get your arms around. I call these the non-traditional finance skills. There are several ways to develop them. For me, the start came with my role as a cost accountant. I had the necessary mundane assignments of explaining different operations variances, but I was also very lucky. As a cost accountant, I was a new product development committee member. It’s where I learned the inner workings of Sales, Marketing, Operations, R&D, and Quality Assurance.

In this role, I was able to learn how things work, and develop a foundation of institutional knowledge required to understand why certain decisions are made. After I developed it, I focused on these 3 skills to get my seat at the table:

1. Understand the Business ModelTo get your seat at the table, you need to know and understand how the organization structure, purpose, products, services, customers, strategic partnerships, and supply chain come together to create and deliver value. Crunching numbers and sitting in your cube will help, but ultimately Finance leaders need to get their people out of their chairs. Whenever possible, your finance team members need to volunteer or “be volunteered” to work on cross functional projects that boost their business acumen. A few ways to get this done are to have them travel on sales calls, work in production, or complete job rotation assignments. Give your best and brightest people assignments that will stretch them well beyond their comfort zone.

2. Build and Sustain RelationshipsHave you ever been in this position? You’ve been asked to find out why the average selling price is down this month. So…you head over to marketing and sales and talk to the people in the know. They divulge something that makes you scratch your head. You go to a cross functional meeting, and the subject comes up. You repeat what you heard, and the sales and marketing team feels that you threw them under the bus. Nice work.

To become a valued team member, you have to help colleagues achieve. If they come to you with an idea, work with them to figure out a way to get it done. It’s easy to say no. An example that is commonly seen is when a sales person wants to close a large deal, but there are some credit terms that need to be worked through. If you follow the letter of the law, you just say no. However, if you come up with an idea on how they can get 80% of the way there instead of no, you now have that person’s trust. The help you gave will spread like wild fire through the sales department, and they will view you as a problem solver – not a stop sign. Your seat at the table has been reserved.

3. Communicate and Drive ChangeIn Accounting 101, they tell students to be barometers, not thermometers. OK, that’s fine. However, there is so much more. The barometer needs to tell the business leaders more than which direction they are headed. Leaders want to know why they are headed in a certain direction, what can be done to keep it that way or change it, and finally, whether or not it’s sustainable. Can someone provide this insightful analysis from cubicle land? Heck no. Finance people need to master skills 1 & 2. The third, communicating and driving change is actually a powerful reward for mastering the first two. You now have the ability to influence decisions, achieve consensus, and drive change across the business. Your toolbox is well stocked!

Developing these three competencies will earn Finance a seat at the table. It takes effort, skill, and sometimes a complete change of outlook. When it’s done well, Finance earns a respected and valued role in establishing strategy, and the responsibility for owning the results of the business.

How to Build Organizational Trust That Boosts the Bottom Line

The purpose of communicating with employees is to share information to influence behavior, drive engagement and achieve business goals. But what if employees distrust the source of that information–or the information itself? Unfortunately, that’s exactly what’s happening in today’s business world.

In fact, according to research from Watson Wyatt, only 39 percent of employees say they trust senior management, and a mere 45 percent say they have confidence in their management’s abilities.

As professional communicators, it’s up to us to start building trust in our organizations. While that trust must start on a personal level, there are also things we can–and should–be doing to help build trust at the organizational level.

Here are five strategies to help you do that.

1. Start sharing more information. Research from CHA, a U.K.-based consultancy, found that 90 percent of employees who are kept fully informed are motivated to deliver added value by staying with a company longer and working harder, while 80 percent of those who are kept in the dark are not. As communicators, it’s our job to encourage our executives to share information more frequently and more openly.

2. Do a trust-based communications audit. Take a look back at all communications with employees (or any stakeholder group for that matter) over the last six months. Include e-mails from top executives, intranet postings, newsletters and so on. Then evaluate those communications for their openness and honesty. Look at whether or not any commitments were made in those communications–and if those commitments were kept. Finally, determine if there was consistency in messaging across each platform. Is your organization speaking with one voice? Or are you sending mixed signals?

3. Conduct a trust-based risk assessment. When it comes to trust, it’s much more difficult to rebuild it than it is to maintain it. That’s why it’s so important to be proactive. Start by looking across your organization and pinpointing all of the touch points with your key stakeholder groups–employees and retirees, analysts and investors, media, customers and so on. Then identify the areas that are either (a) most vulnerable to a breach of trust or (b) would cause the most damage to your reputation if there was a breach of trust.

For example, an organization that has hundreds of customer service representatives taking calls 24-hours per day faces the risk that any one of those representatives could breach a customer’s trust at any moment. Just look at the damage that was caused to AOL when a customer (who also happened to be a blogger) recorded a call with one of the company’s customer service representatives when he tried to cancel his service. (If you haven’t already seen it, check out the video on YouTube: http://www.youtube.com/watch?v=xmpDSBAh6RY)

When it comes to breaching an employee’s trust, the most risk is likely posed by his or her direct supervisor. Failure on the supervisor’s part to tell the truth or follow through on commitments could do irreparable damage to the trust he or she has established with that employee.

4. Create SOPs for any major risks. Once the highest threats for a potential breach of trust are identified, you need to develop a risk mitigation plan. In the situation above, for example, you might offer additional training to customer service representatives that includes an overview on how social media tools like YouTube and mySpace are making it all the more important to provide excellent service on each and every call. Or you may offer workshops for managers that help build their leadership skills with an emphasis on building and maintaining trust with their direct reports.

Even with a risk mitigation plan, however, you still need to be prepared for the inevitable breach of trust. But how quickly and effectively your organization responds can make all the difference in whether the hit to your reputation is a mere chip in the armor or a devastating blow.

5. Start a dialogue about trust with your executive team. Once you’ve conducted a communications audit, completed a risk assessment and developed a preliminary response plan, it’s time to start a dialogue with your executive team about the importance of building trust with all key stakeholder groups. There is a tremendous amount of research (including the 2008 Edelman Trust Barometer highlighted in this issue) that provides concrete evidence of the low trust epidemic and how it’s affecting (among other things) employee engagement, customer loyalty and financial performance.

(c) Bon Mot Communications 2008

Why We Don’t Grow Our Business – Leadership Mindset

We generally ask business teams we are working with, the question: “Why can’t you grow?” The answers are captured and filed away for future reference. We codified the data into subject matter that fell into three categories – Leadership Mindset, Organizational Skillset, and Operational Toolset. In our previous article we defined these “SETS “. In this article we will explore the major factors that prevent a growth mindset and some remedies.

Chapter 2. Leadership Mindset

By leadership, we mean that level in the organization responsible for the profit and loss of a business, and those who provide guidance and direction to the growth project teams. They are generally made up of business, marketing, and technical management. They control budgets and allocate resources. They report up through one or more functional vice presidents reporting directly to the CEO. The factors below best describe the leadership behavior that – in the minds of the project teams – are the primary causes for growth failure.

· “Too Little, Too Late” – ignoring the time factor.
· “Beware the Cannibals” – fear of losing control of the current business.
· “Stuck in Today” – inward focus with a silo structure.

These growth failure factors are not independent of each other and also not independent of both skillset and toolset issues, however they cry out loudly for fixing. We will examine the factors one-by-one and suggest approaches for changing leadership mindset that causes these behaviors. Survey tools and workshops can help leadership teams to both identify their growth mindset and impact on growth success rates. as well as engaging implementation mechanisms to transform leadership mindset into one that fosters and drives business growth.

“Too Little, Too Late”: Many projects take too long from concept to commercialization. Too many projects result in under resourcing with people working on too many projects. Teams spend too much time getting to and through gates. One team said, “It takes longer to get a meeting with the growth board than it does to do the work necessary to meet the stage requirements”. Actually they kept score and counted 57 elapsed days waiting for meetings to get through the first two gates vs. about 55 elapsed days of the team’s actual work time. The project was eventually rejected for fear of potential cannibalization of existing products. Later a competitor entered the market with a new offering similar but not as robust as the one rejected. The top three remedies are:

1. Prioritize what you work on. Resource to win, and if necessary reduce the bets to those that are most critical to success. The key is to require robust project charters with clear goals, defined business impact, required resources, and criteria for success. Quality of the concept description is a good barometer. If they can’t describe it, they don’t have a valid concept.

2. Simplify your process. Over the past several years most have added and added to process when they should be simplifying. You only need three decision points: the first after a robust market validation to clearly define the opportunity to enable the business case; the second after business case generation leading to product development; and third following product development leading to launch. Utilize coaches rather than process facilitators. Coaches take up less time, cost less, and focus primarily on content and getting results.

3. Utilize multi-functional teams, particularly technical and commercial. Often time is lost by poor communications between technical and marketing. Join them at the hip and save valuable time. Increase project leader’s communication capability. Decision makers need to know what they are deciding before reaching the decision points, and teams need to know the issues.

“Beware the Cannibals”: Many times growth initiatives fail at the same time existing businesses begin to lose growth, share, price, and position. Leadership focus is on the existing business attempting to blunt or forestall the tailspin. Growth resourcing grinds slowly and budgets are trimmed to the bare minimum. The fear of product cannibalism takes on an even greater influence in business decisions. The key here is to innovate with fewer, safer, faster, and simpler projects. Forget the homerun and start hitting singles. Demonstrate you can grow again.

1. Focus is king. Prioritize on the basis of speed, agility, and simplicity. Select the top few you can afford to resource for success. Generate charters that reflect the new growth strategy. Set timelines tight. Get technical on board to help set product specifications that can be developed quickly.

2. Invest in high quality upfront market validation. You need to get it right the first time. It is critical that you get a good understanding of value (price they will pay) and impact on existing business during this part of the process. Build your business case before investing in any technical development. Don’t waste what few resources you have. Evaluate the impact of the business case on your business strategy.

3. Get a few key customers involved early. Risk the fear of disclosure for early adoption. Naturally you would not do this if working on a homerun. Accelerate ramp up by using your sales force and key distributors more aggressively. They could use this as an offensive weapon against the price pressures of their current situation. Move your project teams on to the next set quickly. Repeat, repeat, and repeat until you have blunted the competitive erosion, and then begin to engage the bigger ticket concepts.

“Stuck in Today”: We dug into the main causes of inward focus and came up with one major issue – stuck in today’s business model. “We know who are customers are, what our customers want, and will pay for. If something changes they will let us know”. This head-in-the-sand attitude is one of the most difficult to address because it assumes your customers are in the same place you are and if not, they will let you know so you can react. Leaders who behave this way don’t recognize they have a problem until it is too late to act. An outgrowth of inward focus is the silo structure usually manifested in functional organizations not in sync that result in misaligned priorities across the business.

1. Recognize that you may not know what your customers need because they may not know what their customers want. Thus, you will need to learn the larger market unmet needs, and the current gaps in your customer’s value proposition, and consider aiming your value proposition at the customer’s customer. Do not fall into the trap creating internally generated product concepts, or even worse new products until you have completed building the market analytics.

2. Open your thinking to new and different business models including building increased service into your value proposition. Understanding real value is fairly straightforward, and begins with interviews that utilize an outcomes approach, and focus on the entire value adding chain values beyond how they value your existing product.

3. Incorporate “Market Driven” across the entire organization. Break away from a product forward strategy limitation. With a business orientation aimed at specific markets, resource allocation can be more clearly defined, and all functions can know their role in achieving a common market back strategy and innovation process. Decisions are driven by your emphasis on meeting customer values, how you go to market, and how you position your business in the competitive arena.

If you recall from Chapter 1, our thesis is that all growth barriers arise from either or all of Leadership Mindset, Organizational Skillset, and Operational Toolset. In Chapter 3 of “Why We Can’t Grow Our Business”, we will address Organizational Skillset in more detail as a basis for successful growth. Stay Tuned!