Previous Installment Part II: Painting the Picture
So far we have ascertained that our FD needs to be able to put the people, systems and processes in place to generate the appropriate level of financial information. We have also discussed the communication and style qualities required. However these are all very passive, non operational roles.
An FD should be able to take the information about the business and use it to affect change within the organisation, questioning the conventional wisdom. The FD needs to be the ‘critical friend’ of all areas of the business. Asking every manager to look at the cost benefit equation of every area of expenditure or investment. The trick for an excellent FD is how to do this without interrupting business and without affecting the ability of the company to execute. Again communication is a key factor, the FD needs to be able to frame why he/she is questioning the expenditure or investment in the bigger picture of the budget or plan.
The role of the FD is to bring the various elements of the business back to the central plan, but also have the ability to see when the assumptions underlying the plan have changed and be able to model the new scenarios and to change the financial priorities.
In the most successful businesses that I have worked with there has been a healthy tension between the key business functions. Sales and marketing need to be pushing the boundaries, service or product delivery need to be pushing the boundaries. Finance needs to be the flexible glue that holds these functions together and prevents them from fracturing.
This is often the most controversial role of the FD. It is easy to get this part of the role wrong, to stray outside of the FD’s remit for situations to become political. I believe that this is the last piece of the puzzle. Dependent upon the situation of the company, the FD must earn the right to challenge the other areas of the business by delivering excellence in the first two parts of the FD role.
Mike O’Connell, CEO, Isosceles Finance
Tags: Finance Director, Interim FD, Outsourced accounting, Outsourced finance, Part time FD
