“Compared to my current role, the work I did before was pedestrian, really,” Gavin Marshall told AccountingWEB. Marshall, the CFO for Bristol Sport, was referring to the breakneck speed at which sport changes. “So much can happen in a week that in a normal business would take a year,” he explained.
In particular, it’s the football. Bristol City, which falls under the Bristol Sport umbrella, plays in the Championship and has a passionate following. Matches are unpredictable, and the emotional side of sport quickly invades the boardroom if things go awry.
“It's trying to ride that roller coaster, especially from a finance perspective,” Marshall said. “Trying to keep people on track and on a plan is a challenge.”
Marshall's example is extreme. Professional football is high stakes and highly charged. But it does raise an interesting point: how emotion warps the work of an FD or CFO. Not many businesses will match the pressure cooker of sport -- but the spectre of emotion haunts all human endeavours.
“You’re treading a line between the head and the heart,” said Norman Thompson, the CFO of Vidatec, an app development firm based in Stirling. “Which is what makes an FD’s role more interesting: When you get that blending of commercial business, visionary business and hard financial facts.”
Far from steering clear of the emotional side, Thompson seeks it out. Not to the point of irrationality, but as a way to improve his work by creating an alloy of reason and emotion. To be insulated from emotion entirely, he argued, is harmful.
“That’s something I always guard against, to be insulated from the wider business. It’s easy for an accountant to fall into ‘the numbers tell the story’. It can become very bureaucratic. It cuts you off from what the company is trying to achieve. What a company is trying to achieve should extend beyond numbers.
“Especially when you’re trying to create something, it will take investment and time, and there will be another part of your brain saying ‘We said we were going to hit X% of profit by now’.”
Thompson isn’t saying that the heart is always right. Far from it, he stressed that the company must be financially healthy if it wants to achieve its goals. But there are times when going with your gut is the right call. “You have to decide at the moment which side of your brain you want to flex.
“Do you accept a lower profit because you want to grow the business in the long term? Or are you black and white? I’m pretty flexible when it comes to changing goals. You’ve got your red flags, of course, you can’t start going into losses that become repetitive losses. You don’t want to burn through your cash.”
To just be black and white ignores the emotional side of work and business. Sometimes these impulses must be overridden - but even then FDs need to realise the emotional ramifications of hard choices.
A few years ago, social media startup Buffer made the news after a round of layoffs. The company had, until that point, cultivated a reputation as a wonderful place to work. By all accounts, it still is. It’s entirely remote, it remunerates staff handsomely and offers a high degree of autonomy.
But the business had “moved into a house it couldn’t afford" as its founder Joel Gascoigne put it. By Gascoigne’s own account, the pendulum had swung too far to the emotional side. The chickens had come home to roost.
Since then, the company has clawed itself back to financial sustainability. Caryn Hubbard, Buffer’s head of finance, has been at the forefront of this effort. It’s not been easy, she explained. “We’re a very sensitive group,” she said.
One particular sticking point was Buffer’s salary formula. The company is completely open about how it calculates employee salaries. When the formula was reconstituted, with oversight by the finance team, it led to an outpouring of emotion.
“We reconstructed the formula and made it work. And then, when the team received the proposal, there was so much emotion. The figures made total sense -- but we’re talking about salary here, about how the company values you.
“What slows me down the most is that communication component. Ensuring that it lands right, that it’s received well.”
According to Kate Coles, co-founder of the FD mentoring service Enhance, getting this communication element right is a vital soft skill for finance heads. As a long-time finance professional (and someone who experienced the ‘08 crash), Coles is pragmatic about the numbers. “They have to add up,” she said. “If it’s not going to work financially for the company. You can’t do it. It’s like being a parent.”
This reality is tough on finance leaders. Most times they’re the only ones who can see the full financial picture. “It’s being in that position that you have to feel that its the right decision but you can’t necessarily show the information and why it’s right.
“As you get more senior, being able to not just show numbers - but tell the story. You’ve got to get the spins right, and how those numbers are being conveyed.”
Emotion is never completely absent from it. It can’t be eradicated - but it can be managed. Ultimately, that’s why the FD and CFO roles exist. “It's a constantly shifting feed of good and bad news,” said Bristol Sport’s Marshall, “and it's my responsibility to keep track of it and advise accordingly”.
About Francois Badenhorst
I'm AccountingWEB's business editor. Feel free to get in touch with comments, tips, scoops or irreverent banter.