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Finance myths: Stop challenging, start coaching

8th Jul 2019
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AccountingWEB's FD columnist Andy Shambrook deconstructs ten myths that continue to dog the finance profession. For the second myth, Andy explains why challenging people is the wrong approach.

Every CFO or FD I ever worked for gave me some variation of the following advice: 'challenge the business' and 'make recommendations'. And when I became an FD myself, I rehashed the very same wisdom.

But, on reflection, it’s some of the worst advice I ever got -- and gave. 

It all became clear when I moved to a sales director job. In that role, I learned the psychology of influence and realised how wrong we had got it in finance. I now call these the myths of business partnering.

In my last column, I addressed the myth that it's our job to ‘partner the business’. It creates an unhelpful 'us and them' situation, and we talked about what to do instead. Now for my second myth, we’ll move onto the concept of “challenging the business”.

Myth two: Our job is to challenge 'the business'

Well, myth one already set up an 'us and them' situation. Us (finance), challenges them (sales, marketing and operations), and guess how they react? Yep, they get defensive, and that's the problem at its core.

Sure, the intentions of a challenge are noble: to test ideas, improve outcomes and create change. Without challenge, we are passive and accepting. The problem is, however, that challenge creates almost immediate resistance.

The best way to move someone from not really caring about their latest idea to that same idea being the single best and most important idea of their entire life is to challenge it! So when we challenge marketing's latest promotional campaign, they will reflexively defend their baby.

And when people are defensive, communication is shut down, influence is shut down and no matter how valid your challenge was, or how good your alternative is, they won't hear you out. 

What did I learn when I became a sales director?

In sales, we want to influence and we tell each other not to challenge.
The last thing we want to do is challenge our customer, because we know it will create resistance. And we know that if the other person feels challenged, we won't be able to influence them.

In finance, we want to influence and tell each other to challenge.

Who do we listen to, then? The advice from other finance people? Or the professionally-trained sales people?

So what do we do instead?

Rather than a challenging mindset, switch to a helping or coaching mindset. Start by finding something about their idea to agree on. You may not agree with the financial outcomes, but the intention behind the idea may well be sound.

Agreeing breaks down the 'us and them', and positions you firmly on their side. Now show them how you can help get a better financial outcome, so you can help them get their idea approved and over the line.

So let's say marketing want to invest in a new TV ad. Rather than say, ”no the ROI doesn't meet the hurdle rate”, go with something like: “great idea, how can we do it and hit the hurdle rate so we can get it signed off by the board?”

Final thought

Challenging creates resistance and closes people down. Your job as an FBP is not to point out all the problems in people's ideas.

It is not to say no to people because their ideas aren't in the budget or don't meet a hurdle rate. Your job is to help sales, marketing and operations to mould their ideas to give a financial outcome that everyone can say yes to.

And if that's not possible, your job is to coach sales, marketing and operations to say no to themselves.

If you want to be an FBP, stop challenging and saying no. Start finding legitimate and financially viable ways to say yes.

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By flightdeck
11th Jul 2019 13:52

At the risk of gathering angry comments from readers of this website I would say that this finance challenging the business thing needs careful thought.

Unless the finance person has subject matter expertise on subjects that are material to the organisation's value chain then their opinion on that subject is unlikely to be respected - because they don't know anything about it.

Unless the finance person was an ex software developer then I'm not interested in their views about project staffing, phasing, recruitment, salaries, pricing models, partnerships etc. They don't know risks involved in an engagement because they don't know the subject matter so they can't price the work because of this and other things they don't understand. They can't tell a good from a bad software developer and what value they will have in the business and therefore what salary and position they should command so I (with my SME managers) will be the one setting pay scales and deciding what variation on that each individual is worth. etc etc

I'm lucky though. I've only every worked with excellent finance people who supported the subject matter experts / decision makers in a productive fashion and never thought that the tail should wag the dog.

I do have some 2nd hand anecdotal stories from other people who have had an accountant telling them how to run their business including telling them off for spending on specialist equipment "because its expensive and three seems excessive and you only used 1 last year" when they have no idea what the equipment is or what legal requirements there may be around having that kit. Also telling the business owner not to make an investment even though they are sitting on plenty of retained earnings to afford it, have never worked a day in that industry or seen the order book etc. I was always flabbergasted by this and was vociferous about switching accountants. I am not used to having any adversarial relationship with my finance people. I have always felt well supported by my finance people and I respect their domain and subject matter expertise and for the same reasons I don't challenge THEM on their chart of accounts or amortization strategy or how they organise their finance team etc. (I might ask questions about all of that but only so I can learn something).

Of course you can challenge and the author shares this very nicely "great, how can we show the ROI and get this past the board". That's a good example. Although I would say that if the marketing team haven't got the subject knowledge to work out the ROI on their proposed activities then they're not very capable marketing people and that's the issue that needs dealing with there.

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