Here's how you can enhance your career in Corporate Finance through strategic thinking.

I see so many young analysts skip the step of building their acumen in a wide range of topics. "Strategic thinking" is most often the result of hard work developing a very strong understanding of finance and economics then applying those concepts to the broader world of regulation, trends and competition. Work hard to become a trustworthy expert and leaders will naturally start depending on you for insight.

D.I.V.E. into it. D is to Develop your thoughts/ideas thoroughly by researching needs, markets, industry, competition and laws/regulations. I is to Investigate feasibility/economics of products/services with strategies, financial plan and investments required. V is to Validate it by seeking feedback, input and challenges to D & I and to test market it. E is to Expand based on learnings/success from V.

I always found it really important to understand the financial characteristics of businesses particularly margins, cash flow, capital intensity and returns…..in order to recognise the financial levers to achieve synergistic benefits when expanding businesses.

Many business leaders/owners fail to grasp what’s possible in terms of financial performance by a well-informed, unified team striving for continuous progress in a performance/based company culture. Benchmarking the top performers in your sector, comparing notes with likeminded/trustworthy CEO peers, & building a well-trained/accountable organization are all key drivers. Everyone has a role to play in honing your return on assets/equity performance by specifically driving the two key multipliers (operating margin - through optimizing price/cost/waste/productivity - & asset turns - through working capital management, fixed asset/floorspace management, & sharper supply chain/facilities/clock management to speed-up throughput/leadtime.

A typical key strategic failure among chief executives is failing to clearly define the playing field for their team. Without crystal clarity on their “served market” definition or company charter, they can’t collaborate effectively as one team nor be held accountable for worthy performance. Mission drift occurs & companies begin doing many things that dilute their strengths & reputation in the eyes of the true target market. Greater clarity & team focus regarding products, services, geography, market segments/verticals, & target customer profile(s) is an ongoing CEO responsibility. It’s nearly always better to be a clear leader with a more tightly-defined target market than to be a mediocre, amorphous participant. Build on strength!

Experience suggests that “facts are often at variance with opinions” so I have found a successful approach is to empirically understand the market, the market share of competitors and to relate your internal product sales trends with developments in the market- based on available studies and in depth discussions with your sales staff. Understanding these dynamics- and your trends relative to movements in the market- is critical to developing strategies and to providing direction when talking to shareholders and investors.

Experience suggests that the dangerous risks are the ones that risk assessment exercises often fail to identify. Risk awareness needs to be an attitude of mind, not a paper exercise, albeit supported by thorough assessment.

Clear communication is crucial for expressing complex financial concepts and strategies in corporate finance. To ensure your strategic thoughts are understood and supported by stakeholders, tailor your message to your audience, simplify complex ideas, use clear and concise language, and engage your audience with questions and feedback. Visual aids like charts and infographics can make information more digestible. Regular practice and seeking feedback can further enhance your communication skills. This approach helps in solidifying your role as a leader, fostering better decision-making, collaboration, and alignment within the organization.

In corporate finance, building a robust professional network is as important as technical skills. Networking provides access to mentors, allies, and valuable information that aids in strategic decision-making. Attending industry events, joining professional associations, and engaging on platforms like LinkedIn can help establish connections. A diverse network offers different perspectives and insights, enhancing your strategic thinking and opening doors to new career opportunities. By leveraging these connections, you stay informed about industry trends, make better-informed decisions, and advance your career effectively. This proactive approach to networking supports long-term career growth and success.

By developing a deep understanding of financial markets, honing analytical skills, and staying informed about industry trends. Proactively identifying growth opportunities, managing risks, and improving efficiencies within the organization allows professionals to propose innovative, data-driven solutions. Building strong relationships with stakeholders and seeking continuous professional development through certifications and advanced education further solidifies one's strategic impact. By consistently aligning financial strategies with the company's long-term objectives, individuals can demonstrate their value as key assets and leaders within the corporate finance realm, ultimately driving their career growth and organizational success.

Continuously benchmarking yourself against your industry’s top competitors is a key function that underlies strategic & tactical goal-setting, coaching, performance management, & on-going collaboration and communication. The data, properly presented, digested, & acted upon is a fundamental function of the CFO & their team as an aid to planning, execution, leadership development, & enabling performance accountability. The finance function should not just track the numbers & project future financials, but also continuously equip busy operational folks to better focus on the right things (soft spots) along the way (e.g., declining orders/backlog, eroding price or margins, increasing cost drivers, areas of waste, sliding asset turns, etc.).