Ever since the emergence of the word "Finance" – derived from the 14th century Old French Finer meaning "settle a debt" – people have had a love-hate relationship with those of us who have had to manage money.
That’s because financial management in a modern-day perspective has consistently been viewed in a negative way, as in “if only Finance would turn on the taps/release the funds/let us spend more money then we would be able to do what we want to do”.
We are, in effect, the “Fun Police” and particularly so when it comes to allocating funds for the enjoyable things on corporate wish lists or taking stuff away when we need to save money.
Such a state of affairs tends to set Finance units apart from other company divisions, so much so that our colleagues often see us as being the root cause of a “them and us” culture.
It’s time that we put such unhelpful views behind us and embrace Finance for what we really are - creative and strategically-minded people who can help others to achieve what they want to achieve.
With that in mind, I’ve looked at the word in more detail – letter by letter - to come up with a more positive - and to me real - meaning which is more applicable for the digital age of business.
F is for FACTS. The great thing about working for innovative, exciting and ideas-driven companies is that they can be exactly that - lots of exciting, go-ahead ideas which people just want to get off and DO!
Where we come in is by helping to turn some of these ideas into reality. We do that by helping people come up with well-defined, fact-based business cases which are essential to effective decision making. Opinions and views are great but they are no substitute for facts.
I is for INNOVATION. It’s one thing to adopt the word in your lexicon, it’s another thing altogether to be truly innovative. We have to ask ourselves the question: is this just another version of the same old “thing” or are we really offering consumers something excitingly new that they are likely to take up in droves? Will it really move the dial for them and us?
Not only can we get numbers together and analyse them, we can see the trends and likely developments and help ask - and answer - the inevitable questions as to whether we can succeed or not.
N is for NUMBERS. Let’s face it, they are our lifeblood! And because we can’t get away from them then we should revel in the Numbers and use them to help our business partners. At the end of the day, producing a fact-based business case which helps with our decision-making depends on the numbers.
A is for ANALYSIS. The numbers then are one thing but it is the analysis of them that give you real insight and help everyone in the company to have a clear view and direction in terms of what success really looks like.
You have to know your market. I know that sounds like teaching everyone inside our companies obvious lessons but if you don’t understand or appreciate the small and large aspects - and all of the stuff in between - then there is a real danger of getting it wrong.
N is for NEED. Once you’ve got a handle on the market, we have to understand our customer’s need. What do they exactly want and how they go about getting it? Do they have a regular “need” or do you have to help create it so they’ll come back for more. From there, you can ascertain the opportunity and therefore work out exactly what success looks like from the bottom line up!
C is for CREDIBILITY. At the end of the day, it doesn’t matter how much you’ve established the facts, come up with the truly innovative product, revealed and analysed the numbers to know the market and worked out the customer’s need, you still have to get the rest of the management team and, in most cases, the board over the line.
Credibility in presenting your case and making your argument is therefore everything. If you can’t persuade them that it could work, will work then all of that work is a wasted resource.
Make sure therefore that everything stacks up and your key players are on board.
E is for EXECUTION. So to our final letter and we all know how important this one is! You can have the best business case and the best business plan or you could already be there - think the Blackberry mobile phone as an example or before that Kodak film. But if you misread your market and you don’t execute well or properly on your plan for entry or continue to innovate then everything is in great danger of being wasted.
Millions of dollars could be wasted or worse, the future of your company put at risk if you don’t have the right people and the right systems in place to execute on your proposition.
History is littered with wasted or badly executed examples of that.
We in Finance have a duty, an over-riding responsibility and yes, an opportunity to make sure we don’t get it wrong. Of course, it’s not a guarantee of success and we, ourselves, need to ensure we have the right people and the right systems in place to help our business partners to execute well on their part of the plan.
This is an abridged version of a presentation I gave (yesterday) at the Finance, Innovation and Tech Fest conference in Manly, Sydney. My thanks to the conference organisers the eventful group.