What Employers Want from You, the Finance Professional

#Finance is a critical function in any organization, and as such, bears a hefty responsibility.? Business leaders depend on timely and insightful information to aid in their decision-making, relying on finance professionals like yourself to play a pivotal role in meeting that need. This is especially important in this new era of the 21st century, where competition for markets and resources has gone truly global (or should I say, viral).

What follows below is by no means an exhaustive list, but rather some of the more critical things I consider most #employers expect today from their finance professionals:

1.????? Help your employer build distance between the employer and the competition. As market places become more global in nature, companies must compete ever more fiercely to maintain and grow their business, at the same time shedding non-performing product portfolios or exiting weak markets. Your providing of timely and insightful information gives the employer a leg up on the competition.

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2.????? Save the company money. Take the initiative to recommend ideas for cost improvement, to pursue new opportunities, or to reduce risk, even if outside your immediate area of expertise or responsibility. The best ideas often come from people operating outside their field of expertise, like the receptionist at a doctor’s office correctly suggesting a treatment option for a young patient that the doctor had not considered. ?As an outsider to the problem at hand, you are not burdened by past failures or circumstances, so you can often bring a fresh perspective to the challenge at hand.

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3.????? Know the business and products of your employer. To my CPA colleagues, don’t be like the auditor who, after completing an audit for a client and was asked, in what business did the client operate, responded with a blank stare. He executed flawlessly on his debits and credits, but had no idea how those debits and credits relate to the business he was auditing.??

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4.????? Know the environment in which your employer operates. Read up on the competition and other matters impacting the industry. A good grasp of the external environment in which your employer operates will provide context to the financials you generate and a basis for offering valuable insights and advice to your business partner. In heavily regulated industries such as Life Sciences, keeping up on regulatory issues such as happenings at the Dept of Health is a winner. A free subscription to Pharmaceutical Executive does not hurt.

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5. Understand risk.? Your grasp of risks can be of tremendous value. Guide your business partner on the range of future outcomes that could arise from actions taken today; offer possible mitigating solutions. Use a graphic such as a “tornado” chart to depict, at a glance, the likely outcomes of actions taken. In presenting “tomorrow” today, we often can only apply assumptions.? Showing your business partners the sensitivity of likely outcomes to key assumptions is a winner. See example “tornado” chart below.

Assuming the likely net income of $650M based on a select set of assumptions, the chart above depicts the likely impact on net income if key assumptions vary within a certain range. For example, a change of a mere +/-5% in market share increases or decreases net income by about 50%, i.e. swings net income between $950M and $350M. Net income is therefore most sensitive to market share. At the same time, a 25% change in the unit cost of manufacture does not have as much an impact on net income, with the least impact coming from overhead changes. This is a story well told graphically, without the need for a lot of verbiage.

6.????? Have a creative, yet analytical mind. Be able to translate operating plans into financial plans. Be a true bi-lingual, speaking both the language of business and of finance. Explain drivers of variances aptly and advise on corrective actions to avoid your business partner steering the business into an iceberg, i.e. being decimated by a competitor or producing an unforced error (self-inflicted wound). Help provide that early warning signal through insightful, forward looking financial analysis.

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7.????? Break down financial information into digestible bites (or bytes). The best reaction you can get from an exec when presenting is, “I get it; it’s very clear”. Therefore, synthesize complex financials into simple to understand messages; dazzle your execs with some clear and concise graphics. For example, when explaining period-end variances, how about using a waterfall chart vs. the bland and ubiquitous Excel table? See example chart below. ?

Net income is $90K above budgeted income of $1000K. As depicted in the graph, the variance is driven by gains in pricing and volume, offset by increased promotional spend and some overhead cost increases; a message conveyed by a quick glance at the chart. This approach gives your business partner more time to focus on solutions to improve earnings rather than be wading through a dense Excel table of financial data.

8.????? Soar high and dive deep. Be both a big picture and details-oriented person all wrapped into one. Business schools sometimes train us to be one or the other, but we need not walk that plank. A running joke on campus back in my MBA days in Cambridge, Massachusetts highlights this situation: Surprised at the student with two dozen items in his cart in the 10-or-fewer checkout line, the supermarket clerk blurted, “You are either from MIT and can’t read or from Harvard and can’t count”. Big picture and details-oriented traits need not be mutually exclusive.

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9.????? Operate with Speed and Rigor. Move quickly without spilling the wine. Everything moves at the speed of light these days, so fast turnaround or delivery of information is of critical importance to facilitate quick (but not hasty) decision-making. At the same time, make sure to operate within the margin of materiality (i.e. the warranted level of accuracy).

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10.????? Practice integrity. Finance is built on credibility. From your business partner to the investors on Wall Street, quality of information is of paramount importance. Resist any temptation to practice “voodoo” accounting. Be ever cognizant of GAAP (or its equivalent). Recall the debacle of Enron and WorldCom that gave us SOX 404. In the long run, your company will reap the reward from being known as a credible organization.

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11.????? Learn continuously. Continually update and broaden your skills set. Take on different roles or projects within your company, including across Treasury, Corporate, R&D, Commercial--you name it. Bottom line—be equipped with a broad array of competencies to drive value from any direction in your organization.

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12.????? Finally, be a great leader. Share the credit generously for team achievements. Good leadership skills can never be over-emphasized. But that’s a separate article unto itself.