By Michael Stell, CFO
Financial leadership sits on the shoulders of more than just the CFO – it is the responsibility of all leadership team members to understand how the company’s financials are affected by and affect both the business and its employees. It’s important to have a strong command over this realm of business, but there are a few areas that can be a hurdle for leadership to understand and overcome.
Understand your numbers and effectively communicate them.
In business, it’s key to know your numbers. Why? The old adage, “It is difficult to improve what you don’t measure.” Business changes at such a rapid pace in today’s technological and economic environment. Knowing the driving forces behind your business is critical to continued success. A step beyond is effectively sharing your numbers with your people. The more communicative, the more open a company is in sharing critical metrics, the more successful the company can be. This goes beyond celebrating successes when results are positive and developing action plans to address critical concerns when results are negative. Sharing this data helps to develop a more thoughtful and comprehensive leadership team. One that understands the need of the company, beyond their own department.
Use resources to decide where to invest.
With business and financial focus pulled in so many different directions – growth in service, offerings, customer base, sales – how do you focus on what you should really be investing in? That is the big question. Limited resources of time and money pose a challenge. The answer is difficult to pin down and can change month to month, sometimes day to day. This is why data, and scorecards in general, is so critical. Without it, you are throwing darts… blindfolded.
Get non-financial employee buy-in.
Typically, employee focus is on the numbers – smaller businesses without the salary levels of larger companies can emphasize the importance of non-financial benefits. Playing a significant role in the success of a growing company is a benefit larger companies may have a difficult time offering. Involving employees in monthly meetings and bringing them along in the growth cycle will help the employee feel like part of the team and will encourage buy-in. Taking advantage of the reduced bureaucracy that is often possible for smaller companies can also be a marketable benefit. Offering flexible hours, dress-down days, and more PTO will go a long way in keeping your employees motivated and your workforce more productive.