Troy in our weakness stands. - Ulysses, Troilus & Cressida
EXECUTIVE SUMMARY
In the world of finance, just like the journey of Ulysses in the play "Troilus and Cressida," there are three important things to consider: People, Process, and Technology.
The Right Team
"Skill comes so slow, and life so fast doth fly."
Imagine building a sports team. You want players with the right attitude, skills, and qualifications to win games. In finance, it's the same. We need the right people who are excited to learn, work hard, and have the skills needed for the job.
Ulysses reminds us that time passes quickly, so we need to make the most of our skills
The Right Process
Take but degree away, untune that string, and, hark, what discord follows!
Picture baking your favorite cake. You need to follow a recipe, right? Well, in finance, we have recipes too, but we call them "processes." These are the steps we take to get things done. Ulysses says that if we don't follow the right course, things can get really messy.
The Right Technology
"One touch of nature makes the whole world kin."
Think of technology as the gadgets and tools you use in video games. In finance, we have tools too, like computers and software. But it's important to use them wisely. Ulysses says technology should fit our needs, just like a glove fits your hand.
So, in finance, remember to find the right team, follow the right steps, and use the right tools. It's just like how Ulysses navigated through his adventures in the play, using the right strategies to reach his goals. That said, Poseidon is as Poseidon does...
INTRODUCTION
In order to have a healthy garden, you need the right balance of soil, water and sunlight. Similarly, creating an effective finance team requires the right balance of People, process, and technology, but ensuring that People ALWAYS come first.
We will address the most critical components of creating a culture of continuous improvement for finance teams.
THE RIGHT PEOPLE
For any company’s continued success, they must always focus on having and keeping the right people. Despite the fact that this term has become a cliché, it has much merit and as it pertains to Finance, holds true. Although, having the right people is much more than just finding the right person, it also means ensuring that certain qualities relevant to the respective positions exist throughout the organization (senior management included), such as the right attitude, work ethic, skills and qualifications.
To plan the creation of a process or system, what do we need? The right people!
To implement processes or systems, what do we need? The right people!
To implement effective controls to support the accuracy of information reported, what do we need? The right people!
To monitor and track progress on planning, implementation, and effective use of processes, what do we need? The right people!
To allow the best in employees to flourish, what do we need? The right people!
To not lose sight of the fundamentals and the reason why all are employed, what do we need? The right people!
Far too often, we hear of management and employees stating that processes and systems are the reasons why the job cannot be accomplished in an efficient and/or effective manner, which in most cases is because of not having the right people with the right attitudes and skills to do the work, or develop processes and implement systems that can facilitate such a need.
We are not implying that one person or few persons are the sole causes of all such failings but what we are saying is that in all circumstances and situations it is always people that form the foundation for the success of any company; whether it be through third party consultants or in-house resources.
THE RIGHT ATTITUDE
“Attitude is a little thing that makes a big difference” Winston Churchill
The Italian sculptor Agostino D’Antonio worked diligently on a large piece of marble. Unable to produce his desired masterpiece, he lamented, “I can do nothing with it.” Other sculptors also worked this difficult piece of marble, but to no avail. Michelangelo discovered the stone and visualized the possibilities in it. His “I-can-make-it-happen” attitude resulted in one of the world’s masterpieces – David. The right person with the right attitude looks beyond the obvious and can envision solutions where others may see problems and what could be deemed insurmountable obstacles. While this right attitude is never listed as a skill or experience on a resume, it is evident in an individual’s accomplishments, outlook and aspirations. People with the right attitude tend to be problem solvers, enthusiastic and willing to learn.
THE RIGHT WORK ETHIC
“The difference between try and triumph is a little umph”. ~Author Unknown
The term work ethic is another one of the most common used cliché’s and consequently has come to mean many different things to different people.
Our use of the term is in the context of people being motivated, determined, dedicated and persevering, to obtain results. Individuals with the right work ethic never focus on the hours spent on a task or project but measure their success based on the results of their efforts. In many organizations there are many individuals that spend many hours in the office and claim to be hardworking. This however, is the anti-thesis of the right work ethic.
No one on their death bed ever said “I wish I spent more time at the office”, as having the right work ethic is all about balance and obtaining results while maintaining ‘balance’. When one has a life beyond work, but has the desire to produce a quality work product or service with pride in the results of their work, they somehow make this work. They do so by looking for the most efficient way to get the job done, while maintaining a high level of quality of which they can be proud after the job gets done.
That being said, work ethic is of no value if one does not have the right skills to perform the job. It is all about balance!
THE RIGHT SKILLS & QUALIFICATIONS
“Skill is the unified force of experience, intellect and passion in their operation” ~ John Ruskin
While having people with the right skills and qualifications seems like a no brainer, more often than not the reason for the cause of high employee turnover is due to not enough focus on this requirement. There are often situations where management, hire employees with certain skills that they themselves lack, yet they chose to ignore the recommendations of those who are skilled and experienced, only to have issues rise to the surface due to ineffective processes and systems.
In such circumstances, it is management that are the PEOPLE that need to be changed or re-calibrated to doing things differently, as one cannot put blame on skilled employees for ineffective processes and systems that were created contrary to the recommendations of the persons hired to avoid such calamities. Sometimes, it may just be a situation where management should get out of the way and allow those who are skilled in a certain field to do their job and do it in the most effective and efficient manner in meeting the goals that we set for them.
There are no bright lines or clear demarcations of right and wrong, as each situation is different, but having people with the right set of skills and qualifications is a necessary ingredient for success.
Allowing these skilled individuals to do their job and be held accountable for it is also critical, as it is equally important and critical in also recognizing when the wrong person is in a job and doing something about it, whether it be through training or replacement. This may be a hard reality, but ignoring problems does not make the problems go away and is neither good for the employee, their colleagues, nor the company.
People form the cornerstone for establishing the right processes and implementing the right technological tools to ensure they can work towards fulfilling the goals of the company. There are many instances where management teams put the cart before the proverbial horse by emphasizing the solutions of many problems solely by the implementation of new technological solutions. This may be in the shape of an ERP system, accounting system or other software tools available in the marketplace. The justification often is that even the most unskilled and/or incompetent persons should be able to use the tools in the most effective and efficient way in support of management’s goals. There is nothing so far from the truth. We acknowledge that it may not be that employees have no skills, but they just might not be performing the job that is most suited for their skills and their passion. Having people with the right attitude is the beginning, but not the end; first one must have the right attitude, then be sufficiently trained or have the appropriate skills and experience to do the job that they have been hired to do. When we focus on people first and ensure we have the right balance in terms of attitude and skills, the development of processes and the implementation of systems that are practical, efficient, and effective emerges.
In reality and from a practical standpoint, a company might have the right people, but not use them in the most effective manner; thus allowing others (consultants and some functional managers) to spend and waste both time and money on their own agendas at the expense of having such processes and systems work in the manner they were designed and implemented to accomplish.
THE RIGHT PROCESSES & TECHNOLOGIES
The system is that there is no system. That doesn’t mean we don’t have process. Apple is a very disciplined company, and we have great processes. But that’s not what it’s about. Process makes you more efficient. ~ Steve Jobs
Creating processes within an organization requires a thorough understanding of the business activities, focus on efficiency and scalability while always keeping an eye on effectiveness (i.e. getting the job done!).
We have yet to see a process establish itself without people, so it would be like putting the cart before the horse if you were to define the process and then hire the right people to ensure that the process is followed as envisioned and designed. This works in some circumstances, if the persons involved in the process are data entry only. However, even in such circumstances, the most rudimentary processes fail, as the persons using them either have not being appropriately trained or they are oblivious to the reasons why they do what they do. Ever heard the phrase “This is what I am supposed to do, the system does the rest”. While it is due to the lack of training, it also belies a somewhat bigger issue that people are not aware of the interdependencies of their actions and activities. Well trained people are not only trained in how the system works, they also are aware of what role their specific tasks or activities play in the overall scheme of the organization’s processes.
“If the only tool you have is a hammer, you tend to see every problem as a nail.” ~ Abraham Maslow
All too often we have seen those who believe that maybe if they change or implement a new finance system to assist with the process, or take a few short-cuts, all will be well; however, this almost always leads to long-term pain and costly fixes. While developing processes, implementing technological tools does not mean just using more excel tricks, if we are using excel to do things that may be better supported by other system interfaces or databases that will allow for scalability. Similarly, there are times when using excel to fulfil a purpose, that will in most likelihood never grow to tens of thousands of data points, may suffice and avoid wasting thousands to millions of dollars on integrated systems. In short, the key is to ensure that you have the right people making decisions as they will always look at implementing processes and using technology in the most practical and efficient way with a long-term focus in mind.
As much as those of us that have been involved in implementing systems and with managerial roles think we understand all the processes and how the organization functions, there are many things that we may not be able to see from our perspectives. For example, many software vendors have canned reports and indicate in their presentations on the various ERP systems that there are hundreds of reports which serve most reporting and analysis requirements. If no one takes time to understand if the reports are text reports, pdf reports or excel downloadable reports and the nature of the analysis or reporting to be performed then the actions taken by management may contribute to additional work and not simplification. In many organizations, system assessments and implementations involve management and those seeking the limelight while excluding those who will be following the processes and using the systems. As a result, the detailed knowledge of existing processes, assessment of true needs, or any discussions with regards to the practical nature of doing things a certain way are left out resulting in many a catastrophe. When the processes or systems fail, they blame the systems or processes for lack of usefulness, after which, time and time again, the processes are changed, systems are upgraded or overhauled or new systems implemented with the hope that things will work this time, again not involving the users of the systems at the front end, other than during often ineffective user acceptance testing.
We know it goes without saying, but we will say it anyway… The right people do three things, they communicate, communicate, communicate! All too often we have seen situations where the questions is asked “Did you speak to John in Operations?” “Did you ask the sales teams what they need and why they need it?” “Did your plan include sufficient time for testing and training?” to which you either get a stared look, or a response…”That’s a good idea!” You know things are not going in the right direction when the basics of communication and appropriate planning in order to get the job done right, is an afterthought. Hence, having the right people cannot be overemphasized.
If we set out years ago to implement a system, and our business has not changed since inception, but the consultants used are still on-site tweaking the system, then we have failed. Often, if we are true to ourselves, we would acknowledge that we have the wrong people (sometimes and painfully so, that includes us) leading the implementation internally. We should note that it would be sad if you had external advisors leading an implementation without effective oversight as you should not be surprised if the project results in cost escalation and the timing of implementation lapses. After all most consultants are not there to increase your profits, they are there to maximize theirs and will do so at all costs if the situation presents itself. Unfortunately we have seen many times how such a situation exists when the wrong people are involved in establishing processes and implementing systems and have little to no experience of the actual and real needs; such situations, are often ripe for being taken advantage of by consultants. In these circumstances, we should not blame the consultants, but acknowledge our own failings in not having the right people internally to steer the ship in the right direction.
Many finance professionals view processes and technology in meeting only finance needs without recognizing that other functions and non-financial activity may play a pivotal and critical role in achieving overall goals. It all has to do with having the right people in place to ensure that shareholder value is maintained. Too often the person leading the charge to implement a process or system is the one who was ‘available’ at that time. Therefore, having the right people ensures effective communication of what needs to be done and continually assessing the most efficient and effective way to execute a process or utilize a system.
On the technology front, there is a saying that ‘there are no bad systems, just bad implementations’; who do you think are the ones doing the implementing? That’s right…PEOPLE!
“Technology is nothing. What’s important is that you have a faith in people, that they’re basically good and smart, and if you give them tools, they’ll do wonderful things with them”. ~ Steve Jobs
If you are still not yet convinced, we challenge you to answer the following questions differently:
To plan the creation of a process or system, what do we need? The right people!
To implement processes or systems, what do we need? The right people!
To implement effective controls to support the accuracy of information reported, what do we need? The right people!
To monitor and track progress on planning, implementation, and effective use of processes, what do we need? The right people!
To allow the best in employees to flourish, what do we need? The right people!
To not lose sight of the fundamentals and the reason why all are employed, what do we need? The right people!