Why are we not more courageous in Finance?
Anders Liu-Lindberg
Leading advisor to senior Finance and FP&A leaders on creating impact through business partnering | Interim | VP Finance | Business Finance
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Accountants are stereotypically risk-averse. In fact, there remains a common perception amongst other functions that Finance is simply the department that says "NO"!
This is not the way things should be. Finance's role is not only to gatekeep or to be a blocker. Too many Finance professionals still believe that their job is to eliminate risk - when in fact, we should be helping the rest of the business work out which are the right risks to take.
Making sense of risk
Risk is an inherent part of business, and it's one that we should embrace. Without risk, there is no reward. The task for Finance departments is to design frameworks and processes by which risk can be assessed, prioritized, and mitigated.
I've explored those processes extensively here on LinkedIn, looking for example at the Eisenhower decision matrix and the basics of risk management.
But in addition to the process, we also need courage - and this is a skill that you're unlikely to have been taught at business school. Finance departments aren't known for their courageous thought, but increasingly this is what is demanded and expected of us.
As the role of the Finance professional shifts towards a business partnering paradigm, our mindset needs to shift too. In the past, we were all "99% thinkers" - that is, we were accountants who demanded 99% certainty. Today, though, we are not bean-counters but driving decision-making - and that outlook requires a different frame of reference. The days of 99% are over, and they've been replaced by 80/20 thinking.
Clear-eyed action
Of course, we still need to ensure that we are equipped with the tools and information we need in order to make the best possible decisions. We need accurate and comprehensive data, and we need the processes and knowledge that enable us to interpret that data.
But primarily we should be prepared. The majority of what we call courage is actually just forward planning. As long as we understand the potential implications of each course of action, and as long as we have taken the appropriate steps to mitigate downsides and maximize benefits, we can go into our decisions with clear eyes and confidence.
This is the essence of business partnering - and it's the most exciting development in Finance for a generation. Today, Finance professionals are not restricted to back-office activities or relegated to a supporting role. Instead, through a combination of courageous thinking and digital transformation, the Finance Function is assuming its new position at the very heart of the business.
Do this today!
We can all take steps to improve the outcomes we generate, and we can all work to imbue our Finance Functions with a greater degree of courage.
There are many simple activities you can do today in order to get the ball rolling.
Make some time to really interrogate your own thought processes and working practices. Are you a 99% accountant or an 80/20 decision-driver? Identify one key workstream in which you can shift your mindset, starting this week. How can you go beyond the traditional confines of your role and drive real and measurable value for your organization?
There are many resources available on my LinkedIn to help you do just that. Start with the series on changing mindsets, the Finance Function 4.0, and the Finance professional of the future - and make sure you subscribe to receive everything I write, for free, straight to your inbox.
As always, let me know how you get on in the comments.
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This was the fourth article in my new series on how to change perspectives on Finance. You can read the previous article(s) below.
If you want to learn about the changes that are happening in Finance and Accounting these years then I have few recent articles for you that you might find relevant. Check them out below!
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You can read a lot more articles about FP&A, Business Partnering, and Finance Transformation below. It all start's with “Introducing The Finance Transformation Nine Box ”?where you set the ambition for your transformation. You should join the?Finance Business Partner Forum ?which is part of the Business Partnering Institute's online community where we will continue to discuss this topic.
All Successful Business Partners Are "Leaders" ?(the last article in the series about our new capability model)
Should We Keep Talking About Business Partnering? ?(part of a 17-article series where we deep-dive on the WHY, WHAT, and HOW of business partnering by putting it on a formula)
Everyone Can Adopt A Business Partnering Mindset ?(part of a six-article series about FP&A Business Partnering)
From Business Partner To Working Within The Business ?(part of an article series where I interview finance professionals about their careers in FP&A and Business Partnering)
Is Your Product Optimized For Value Creation? ?(part of a toolbox series where we look at what tools FP&A professionals should leverage to drive value creation)
How Business Partners Turn Analysis To Insight ?(part of case study series where I interview business partners about how they drive value creation using real cases)
Anders Liu-Lindberg ?is the co-founder and a partner at the?Business Partnering Institute ?and owner of the largest?group dedicated to Finance Business Partnering ?on LinkedIn with close to 10,000 members. I have ten years of experience as a business partner at the global transport and logistics company?Maersk . I am the co-author of the book “Create Value as a Finance Business Partner ” and a?long-time Finance Blogger ?on LinkedIn with 60.000+ followers and 140.000+ subscribers to my blog. Recently I became an advisory board member at?Born Capital ?to help identify and grow the next big thing in #CFOTech.
Director Finance & Operations at HOWE a/s
3 年Totally agree - the Finance departments should support and create value for the business ??
Actively searching for replacement
3 年I think this is spot on. It must be said other business departments often believe the stereotype that Finance is the blocker. Finance professional grow to understand their role can be to improve business by being flexible and recognizing opportunities to say “yes” more often.
CFO
3 年Interesting topic Anders - it's difficult to calculate risk of failure, and it's even harder to gauge the cost of losing out on a business opportunity. Sometimes you got to go with your gut feel...
Writer / Optimist / Servant Leader / Quality / Controlling Specialist / Manufacturing Expertise / Experiences in Sales / Father / Husband / Lover of Life ??
3 年Anders I find Great ways to expand the Finance function is to speak up during topics and share your ideas that aren’t just Finance. While we do know the root basis of how things operate, it’s important to understand the nuts and bolts. I work as a Controlling Analyst within manufacturing. I think it’s important that if your going to help in things like, Capital Requests and analyses, it’s important to talk to plant personnel, and really get into the details on how things work. With sales it’s good to talk to sales people and ask them what their marketing strategies are. I think that many Finance professionals help cement the idea by not reaching out to show they know more. Other functions tend to have the thought that all finance is there for is to know how much money they can spend, or are making. It’s up to us to put ourselves in the conversation, and you do that by asking questions about other functions in the company. Great post!