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.” I think the modern finance version of this anguish could easily be “Data, data everywhere and not a sec to think.”
Today’s finance teams are awash in information—but having access to advanced analytics doesn’t necessarily make you wise. To access and communicate the data’s underlying meaning, CFOs need to embrace new skill sets.
What are those skills? I’m glad you asked. Here’s what it takes to be an enlightened finance leader in the modern age:
You’re a storyteller
No, I’m not talking about telling tall tales with your numbers. You’ve got to master your data and nail your forecasts, of course. But if you stop there, you’re not delivering true insights—and you’re missing an opportunity to connect with department heads about what those numbers really mean. To become a storyteller, you must stop and take that elusive moment to think about what lies beneath the figures: Why is revenue up (or down)? What caused the bump (or decline) in sales? Careful analysis allows you to craft a narrative with numbers. An enlightened CFO knows how to translate the data into a compelling story that engages the rest of the company, connects the dots, and spurs action.
You’re a simplifier
It’s clear that finance teams must navigate an increasingly complex business environment and varied management processes and controls. But while your team’s work isn’t simple, it can be simplified. Rather than revel in complex structures, you seek out ways to streamline them. You slice through business units’ differing policies and systems to present one unified approach, which leads to timely, accurate reports. Like Steve Jobs, you understand the beauty of an efficient, straightforward process. “Simple can be harder than complex,” the Apple co-founder famously said. “You have to work hard to get your thinking clean to make it simple. But it’s worth it in the end because once you get there, you can move mountains.” Intuitive processes and interfaces, in other words, are the best way to encourage engagement.
Software tools are enabling productivity that was unheard of two decades ago, and they’re also slashing some of the rote tasks that have caused so much inefficiency. Enlightened finance leaders aren’t resistant to the radical leap forward, in terms of productivity, accuracy, and analysis—they’re embracing lean principles and tech tools. By doing so, the finance team can mirror the principles that many companies have adopted since the Great Recession: Cut fluff, keep costs down, and boost profit margins.
You’re cloud savvy
According to Gartner, 81% of CFOs see the cloud as a future investment. Software as a service, and especially cloud-based enterprise resource planning suites, empower CFOs with real-time information. But the cloud advantage goes beyond the fact that it offers the most accurate, innovative tools. It also reflects the fact that the old alternative—licensing perpetual software—requires a huge initial cash outlay plus periodic maintenance payments that impede other financial goals. No wonder industry experts say spending on finance cloud-based applications will increase dramatically by 2020—and that the cloud will become the dominant model of financial management by 2025.
More strategic value comes from an engaged and nimble planning process than the final plan itself. As Dwight D. Eisenhower once said, “Plans are worthless, but planning is everything.” It may sound paradoxical, but he understood that while nothing would go according to plan on D-Day, rigorous planning would leave his troops confident and knowledgeable enough to perform in a chaotic environment. Likewise, enlightened finance leaders know that such an approach leaves their teams well-versed in both the company numbers and the larger strategic vision. Then, even if most business plans are out-of-date by the start of the year, the team can roll better with the unexpected twists and respond accordingly.
These traits can separate those who drown in data from those who harness its full potential. And enlightened finance leaders don’t embrace only one of these traits—but all five. How are you working to move the needle on your own level of enlightenment?