In the last few months, I have been talking more and more about financial engagement – yet I have been asked more than once to explain what I mean by this term.
There is undoubtedly a need to improve the financial acumen skills of many operational managers so they can make better and more informed financial decisions. However, the role of Finance is, or should be, changing. Transactional accounting and reporting is increasingly being digitised with far more emphasis on greater accessibility to reporting for all. So where is the value add that the Finance team can deliver? As one CFO put it – he wants his team to become ‘Indispensable Business Partners’.
So we are working with both sides of the business – working alongside Finance to get them involved in supporting the financial acumen training, but also working with them on their communication skills and commercial commentaries. Internal finance teams need to see themselves and act more as internal consultants and you cannot do that from behind a laptop!
Our work with various Finance teams has involved getting them to complete a self-assessment around various aspects of internal consultancy skills and drawing up a development plan. One of the key skills that we employ in running Financial Acumen training for non finance people has been the ability to make the complex simple. This is a skill that many finance team members need to learn if they are going to be truly collaborative business partners. They also need to really understand the business. How commercially aware are they?
Another aspect which many need to improve is their communication – especially when it comes to commercial commentaries on business results. Their value add will be demonstrated through providing business insights. The digital tools are there so how are they harnessing all the data? Commentaries which purely reference the quantum of variances, which everyone can see, add nothing! We need the ‘Why’ and the ‘So What’!
So just as Force Field Analysis has taught us, we need to work on both sides at the same time– Operations understand the language of Finance and Finance understand Operations!!
Financial engagement can be very powerful when this happens!