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Efficiency and the real value of finance

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20th Jun 2011
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For those of you who read me regularly, I tend to talk about the finance function’s role in the larger context. The things you can do to help the rest of the organisation achieve its goals. The ways that your particular way of thinking can add value to the success, potential and opportunities for your organisation, explains Leslie L. Kossoff.

That’s all well and good – but it’s about time that you recognised that you need to see yourself as taking a different seat at the table. A very different seat.

Money is fuel. We all know that. It’s what allows organisations to keep operating day-to-day as well as to plan for all the wondrous future activities that are on the horizon.

Finance oversees and manages the money. You don’t control it – because that’s actually in the hands of those who are putting together and executing upon the budgets that are established and agreed.

But you understand money. And more than that, you understand how “finance” makes money both operational and strategic. Because finance creates a present and a future.

And that’s you.

So it’s time to change your role – individually and functionally – as you assist your organisation in creating the efficiencies it needs to be effective, competitive and profitable.

In short, to give your organisation a future.

From the inside out

The way to ensure Finance’s value to the organisation is by looking, first, at how you do what you do.  And that has to be in the context of your customers.

But who are your customers? Who, both in and out of the organisation, is receiving the benefit of your service?

Once you establish a clear determination of who those customers are, you start asking questions, like:

  • What do our customers need from us?
  • Are those needs different for external versus internal customers?
  • How responsive are we to all our customers’ needs?
  • How good are we at ensuring that our customers are informed of what they need to know before anything escalates to problem or crisis level?

Once you have a picture of who your customers are and what their needs are, it’s time to start taking a serious look at your internal operations. Because, chances are, you’re not designed to fulfil what your customers want. You’re designed – structurally, operationally and procedurally – to fulfil what the Finance Department’s historical understanding of the function, itself, wants.

That just doesn’t cut it anymore. Because Finance is more than just “finance.” You are an operational and strategic contributor on all levels to the success of the enterprise.

And that means it’s time for change.

On change and choice

In previous articles, I’ve spoken of the role that finance needs to play in any change, improvement or lean initiative your organisation takes on. Now it’s time to turn the focus onto yourself and how your function needs to change.

To start, recognise that change is a choice. It always seems as if it is being imposed from outside, but whether anything actually changes is up to you. That makes it a management process. Not something superimposed from outside that will eventually be peeled away.

Consistent change for the enterprise’s greater good is how you do business. But only if you choose that to be the case.

Because the perceived quality and value of your function – and business – is not determined by you.  It’s determined by your customers. Some of whom are in senior management, who are being lobbied – incessantly – by outside providers who make the case for your function and services to be outsourced to them based on cost and quality of service.

That’s your competition. Because, just like any other product or service – internal or external – you can go away. And you don’t want that to happen.

So, no matter whether or not you’re in management or at what level, start now by choosing to make consistent, positive change your way of doing business. That choice – and keeping to it – will be the hardest part. I promise.

The ease of efficiency

The reason why the rest is easy is because efficiency and effectiveness really are management processes – and the more you and your management at all levels focus on how management can work to improve Finance’s products and services, the faster, cheaper and easier change comes in the function, itself.

Even better, those changes lead directly to organisational success – now and for the future.

Here’s how:

  • The higher up in management you are, the more decisions you can make
  • The more decisions you can make, the more you can clean up the various problems that are impacting and influencing the function without employees even needing to be involved
  • The more you clean up those problems with your counterparts at the management level, the better the organisation works across functions
  • The better the organisation works across functions, the more your employees can improve the specific processes that they work within and control at their level – within Finance and in collaboration with others
  • The more your employees collaborate with each other and those not in the function, the smoother the operations, lower the costs and more time for future-oriented thinking and planning you and your employees have
  • The more future-oriented thinking and planning – within and outside Finance and at all levels – the more innovative the enterprise
  • The more innovative the enterprise, the more successful – now and going forward

You see the logic? And it all comes from a focus that starts with wanting to be “efficient.”

Be more than that. You are already – so it’s just a matter of owning what you can do and the real role you play. Then, by taking that more collaborative, innovative and valuable seat at the table, in every formal and informal opportunity you have, everyone will benefit.

Leslie L Kossoff is the author of From Lean Start-Up to Six Sigma Turnaround: 7 Steps To Your Success. She can be contacted at [email protected].

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