In Samuel Coleridge’s famous poem, Rime of the Ancient Mariner, a man adrift at sea looks out on the water and cries in frustration, “Water, water everywhere and not a drop to drink.” This feeling is one that modern day CFOs can certainly identify with, except an updated version might read, “Data, data everywhere, and not a sec to think.”
These days, the amount of information that finance teams have access to can seem as daunting as the ocean did to people a couple of centuries ago. Vast, impenetrable, and apparently never-ending, you need a boat to even dream of conquering it. The modern-day version of a boat is the ability to access high end analytics. However, just as you need particular skills, knowledge, and intuition to sail a boat successfully, you also require a distinct skill set to extract and communicate the underlying meaning of your data.
So, hop on board, and let’s take a look at five traits that enlightened finance leaders need to navigate the unruly seas of data.
We’re not expecting you to gather around a campfire and tell ghost stories as in days of yore. We mean that, as any good storyteller would, you have to look beneath the surface of your figures and ask what’s going on: Why is revenue up (or down)? What caused the bump (or decline) in sales? Is Hamlet really mad or just pretending? You must look at the story behind your numbers and learn how to communicate them to department heads if you want to really deliver.
Understanding your data and giving accurate forecasts is not enough, that’s the work of a mere journalist. Take your data analysis to Shakespearean heights by digging a little deeper and figuring out what narrative your numbers are telling. As a CFO (or storyteller) you should be able to create a compelling story that not only informs the rest of the company but also engages them and drives them forward.
Or knowing how to achieve it, at least. As Steve Jobs once said, “Simple can be harder than complex.” It sounds like a counter-intuitive statement but the point he was making is that it’s tough to turn something complicated into something simple. As he goes on to say though, “it’s worth it in the end because once you get there, you can move mountains.” An ambitious fellow, and whilst Everest may never have budged for him, he certainly proved his point in the legacy he left behind.
The business environment that finance teams must navigate is increasingly complex, not to mention the varying management processes and controls that they have to work with. So why wouldn’t you want to simplify matters? As a leader, it’s your job to streamline the more complex processes. Complication only leads to wasted time. It therefore makes sense to create a unified approach to all these differing policies and systems so that your reports can be timely and accurate. It may sound rather Zen, but the more you simplify, the more enlightened you become.
Like a George Foreman grill, you should be able to reduce the unnecessary fat, leaving only the lean meat that you need. Of course, you’re not a chef or a grill, you’re a financial director, so what you need to cut down on are those long-winded flabby tasks that cause inefficiency in the workplace. So many of these tasks can now be done using software tools that there’s really no excuse to still be wasting time on them. The use of such tools can improve your accuracy, productivity, and analysis, and help you work to a classic business motto: Cut fluff, keep costs down, boost profit margins.
If you still think of clouds as those white puffy things in the sky, then I’m afraid you’ve been left behind. Industry experts are predicting that spending on finance cloud-based applications will increase dramatically in the next two years and that by 2025 the cloud will be the dominant model of financial management.
What are the reasons for this? Not only does the cloud offer the most innovative and accurate tools, it is also a more financially viable option than the old ways. Perpetually licensing software, as has been done in the past, involves a large initial cash outlay as well as requiring pricey maintenance work. By using cloud-based software you avoid leaking money that could be better spent elsewhere and will be empowered by having the latest software and real-time information.
Being a (wo)man with a plan
Eisenhower, the 34th U.S. President and WW2 army general, once said, “Plans are worthless, but planning is everything.” In other words, he knew that, although when his troops landed in Normandy all plans would go out the window, rigorous planning would give them the confidence and knowledge they needed to fight their way through the chaos.
As a financial leader, you should prepare your team in much the same way Eisenhower prepared his troops. Your team probably won’t need helmets, but they do need a plan. By ensuring they are well-versed in company numbers and the larger strategic vision, you are preparing them for the front. That way, even if all your plans are immediately out-dated or overhauled, your team has a good foundation to work from and they’ll be able to tackle any unexpected twists that come their way.
These five traits will keep you afloat in the data ocean and steer you through the stormiest of weather. Don’t worry if you haven’t reached financial nirvana yet though, even the Buddha had to start somewhere!