I’m going to be delivering a speech at my daughter Amy’s wedding this summer.
And although it’s still several months away, I’m already mulling over what I’m going to say.
I know I need to balance humour and interesting stories that aren’t (too) embarrassing. There’s certainly no shortage of material with my daughter!
And I’m going to keep it relatively short. No one wants to listen to the father-of-the-bride drone on for too long.
I’m not worried at all about public speaking, but I do want to get this one right. Knowing how to communicate well is an essential skill.
It’s a lesson I wish more CEOs would learn – especially when it comes to the financial side of their business.
Many CEOs believe that their business finances is their own concern, and possibly the concern of their senior management team. Too often, they keep their numbers and financial strategy hidden from the rest of their staff.
It’s a mistake.
You cannot expect your team members to take decisions that align with your financial needs, if they don’t understand your financial situation properly. Just like you can’t make sensible, well-founded decisions when you’re working in the financial dark, neither can they.
The more your team understands about finance in general, and your company finances in particular, the easier it will be for them to take on financial tasks…
The more buy-in you will get for your financial goals…
And the more responsible they will be with your money.
In order for all that to happen, you need to be somewhat open about your finances. This doesn’t mean you have to tell your team absolutely everything, although I know plenty of CEOs who do share their company’s numbers fully – including where they’re falling short. But you do need to make sure they understand your financial goals and strategy, and the financial implications of the decisions they take.
There’s often another set of stakeholders, too – your board of directors and various investors, to whom you also need to talk about finances with confidence. Often, the financial future of your organisation depends on you being able to conduct these conversations successfully.
That’s why, when you work with us, we do two things.
We work with you personally and directly to make sure you have a good grasp of the financial side of your business. If you don’t understand it, you can’t be expected to communicate it convincingly to others – any more than I could speak with confidence about Amy and Andy without knowing them really well.
And we also work directly with your team, to ensure they understand some financial basics and why we do things in a certain way, so they come to see the importance of good financial management and adopt the key principles for themselves.
Here’s how it worked for one of our clients, “Shelley”, the CEO of a national charity who took on her role in 2020.
The organisation Shelley inherited had a financial deficit. So she needed to turn around its financial situation quickly – particularly as her early tenure coincided with the first lockdown.
One of her first steps was to produce a five-year strategy, which involved changing the charity’s business model. We helped her understand the financial implications of this strategy, and advised her on the best way to communicate this to her board.
Shelley says that her in-house team has also been “on a financial journey.” Initially they were not very involved in financial matters, but now they are expected to own their own budgets.
Together, we helped them gain a deeper understanding of the organisation’s finances. For example, Shelley shares the financial results and forecasts we prepare in staff meetings, while we delivered training on how to use iplicit, our cutting-edge accounting platform.
“I’ve really noticed a difference in their relationship with Insight, which has become so positive. They draw on Insight very freely and finance has become a shared language,” Shelley says.
All this was possible because of the close relationship we forged with Shelley and her team – far closer than a “traditional” relationship between accountants and their clients. Shelley says that she does not see us as an external provider but as “an extension of our team – Insight is my finance department!”
Given all this work and more, it is not surprising that her charity moved from deficit to profit soon after we started working strategically together.
Do you understand the financial side of your business well enough to communicate it to your team and board? And do your team understand what you’re trying to accomplish financially, and have the tools to take sensible financial decisions themselves?
If the answer to either of those questions is “no”, we can help.
Simply hit ‘reply’ to this email or call us on 01279 647 447 to find out how we can deepen your understanding of your numbers – and take your financial management to the next level.
Warmly,
Garry
