My friend, Samuel Brealey, works in marketing. He was interested to know what marketers could do to get their Finance Directors or CFOs on-side when it came to marketing.
We had a good conversation and Samuel ended up writing a great article on the subject which was published by Econsultancy.
But he got me thinking. It’s not just the marketing department which struggles to communicate with their finance department. Most other departments struggle with this too.
So I took the questions Samuel had asked and answered them, not just for marketers, but for other professionals too. Hopefully there’s some food for thought in here for you….
What are CFOs’ biggest frustrations when dealing with non-finance people?
Financial people like certainty, or at least some broad rules which work most of the time.
This makes it easier for, say, engineers to have conversations with their finance colleagues because that process-based life of relative certainty is pretty much their world too. Yes, there are some specifics and explanations to sort out, but usually engineers can explain what the outputs will be for a given set of inputs because that’s the way they think about what’s going on too.
Great news for engineers, but what if you work in a department like marketing, customer services or HR?
Here, although some elements can be expressed as a process, outcomes tend to be more random. The marketing strategy you never thought would work turns into the campaign of the year. The “dead cert” employee engagement policy you developed has people more disenchanted than they were before.
That’s not necessarily because the original proposal was an inherently bad idea…although sometimes that’s undoubtedly true. But it just reflects that in the less-predictable world away from finance and engineering, outputs can be a bit more random.
There’s an old army saying that no plan survives the first contact with the enemy.
By the same token, no strategy developed in a conference room somewhere completely survives the first contact with its intended audience.
So what can you do?
Firstly, try not to go “all in” with whatever you’re proposing. For naturally cautious people, like the typical Finance Director or CFO, this seems foolhardy and unnecessarily risky.
Try things out first – pilot them in a remote office somewhere with a shoestring budget, then roll your new initiative out if it’s successful. That will look like a sensible, well-managed, low risk approach to your average Finance Director or CFO so they’ll be more likely to support it..
Secondly, be very clear about your assumptions. If what you’ve proposed doesn’t work, but you can explain back to your CFO which one of your assumptions…with the benefit of 20:20 hindsight, admittedly…was a little off-base and what you’re going to do to put it back on track, this makes it much more likely your CFO will listen to what you have to say.
You’ve opened the door for a conversation about “what do we need to do to get our conversion percentage up?”…or some other specific element of the plan…and demonstrates you’ve thought things through. The rest of the plan might well remain pretty much “as is”, but some element just needs tweaking a little. We’ll be much more inclined to listen to someone who can explain what happened in those terms.
If it just doesn’t work and you can’t explain why…or worse, if your explanation sounds like the sort of non-specific nonsense that your CFO has heard from too many people already in their career…next time you put a case forward, you’ll have a much higher credibility hurdle to get over with your CFO.
The key here is not that everything has to work all the time. We know that’s unlikely. But can you analyse and explain why it didn’t? If you can, we’re much more likely to support you next time you want to try something out.
How can non-financial people work more strategically with their CFOs?
In general, you’ll have better luck with your CFO if you engage them at the strategic level.
Explain why what you’re doing matters to the business. After all, good Finance Directors and CFOs are there to bring value to the business. No finance person worth their salt would turn down value-enhancing propositions on a whim.
Don’t just present us with a campaign or an initiative, seemingly on a whim.
Loop round to discuss the strategic background before illustrating why this particular proposal represents your best professional view of the most effective way forward.
Try not to sound like you’ve picked up the latest issue of your professional body’s monthly magazine and are just regurgitating its contents to us. We read the press too.
If all you talk about is “employee engagement is a good thing because the CIPD says so” or “influencer marketing is the way forward, according to the Chartered Institute of Marketing” we’ll quickly form the view that you don’t know what you’re talking about.
Not that either of those things is necessarily the wrong approach to take. But explain how that works for our business. Where does it add value? How will it improve our operations? How does it reduce costs or increase revenue?
Answer those questions and whilst we might still say “no”, at least we’ll give you a fair hearing.
But, and I can’t emphasise this enough, always loop around to the strategy. Maybe the expense of hiring and training new staff is getting out of hand, so your employee engagement strategy is designed to sort that out.
Be specific about that, explain what level of reduction in employee turnover means the programme pays for itself, demonstrate that you’ve found a way to pilot at least some of the key planks of your new initiative to make sure the data supports your conjecture and we’ll be all ears.
You don’t need to turn up with all the answers. Just be upfront about what you do know and what you don’t, what’s relatively certain and what’s a punt and we’ll have a debate with you just like we do with every other department with a wishlist.
But whatever you do, don’t just say what you think we want to hear so we say yes. You’ll only get away with that once…
How can we work with our CFOs to build and improve metric tracking, KPIs and reporting systems?
The key element here is the “work together” bit.
We’ve all got our own professional knowledge and specialisms to draw on. Accountants clearly don’t understand marketing or HR, say, in the same way an expert in those professions would. And vice versa, of course.
But we do understand tracking, measurement and reporting systems better than most other professionals. Working together means we stand a chance of coming up with something sensible that works for us both.
To kick things off, you need to have a very clear idea of your own department’s objectives and business processes, how they knit together and what different steps are involved in making sure your department hits its targets..
“We’re going to do some influencer marketing” doesn’t come close to doing that. Don’t tell us about Kim Kardashian’s influence unless you’re proposing we work with her. We get the general idea, just tell us how what we’re proposing to do will add value to our business, not businesses in general.
How will we know if it worked? How will we know if it didn’t? How will we control for other variables – for example if the upward bump in the sales line might have been caused by, say, a new salesperson starting at around the same time as the influencer marketing campaign kicked off?
Now we’re ready for a conversation. And now we can help build reporting systems we both understand.
That benefits us as CFOs because now we understand what you’re planning to do. And it benefits you and your department too because if you don’t do this, we’re very likely to impose some reporting processes or KPIs on you, over your howls of protest if necessary..
We don’t do this out of malice, or because we’re control freaks…well, not always anyway…but because we have to answer to the board for substantial budget spends.
If the business spends a million bucks on an employee engagement initiative or a marketing campaign, you can bet the board is going to ask how that’s getting on and so you can bet we’ll be all over it. We’re the ones on the spot answering the questions, not you, so we need to do what we can to make sense of your area of operations, with or without your help.
So work with us on the reporting systems, ideally as early as possible in the process and before we’ve started building our reporting templates so we can develop a set of metrics that work for us both.
Since people outside the finance department don’t tend to have those conversations with us very often, anyone who does will quickly be seen as a trusted partner of the Finance Director or CFO, not someone whose word we’re not entirely sure we can trust.
Given a choice, believe me, you want to be in that first group…
In an ideal world, how would non-financial people work together with finance day to day?
Always think about the process perspective. Everything we do in a business…every unit of input…is trying to get a unit of output of some sort. That’s the whole reason we do anything at all…to get whatever that unit of output is.
It’s not always a purely mechanical process, of course, for the reasons stated above, but the key here is we’re not doing things randomly, in abstract. We’re doing things for a purpose.
And probably more of a shared purpose than you might imagine. We almost certainly both want to build the business we work for, and make it more successful in the future than it’s been in the past.
So think about the process you’re running, even if it’s not absolutely quantifiable in scientific or engineering terms.
For example, we know not every sales call will result in a sale. We know there is a measure of good luck, timing and Act of God in determining which sales call turns into a client and which ones do not.
Maybe you can’t predict exactly which targets will become clients. But out of 100 or 1000, we’d expect you to have thought through a process which is designed to turn, say, one in three of the sales calls made into clients.
And if it’s not working for some reason, highlight the specific area that’s not working – are we seeing the right number of new prospects, but our conversion rate has dropped dramatically, or are we converting the right number of clients but their average order value has dropped?
What we’d do to put things right might be very different depending on what caused us to under-shoot the department’s target in the first place. So tell us what’s gone awry and how you believe you can get that part of the process back on track again.
Most CFOs are fairly pragmatic so once we know what problem we’re trying to solve, we’re in solution mode. But if nobody can explain what the problem is, or what we can do to put things right, we’ll rapidly lose patience.
If, heaven forbid, something doesn’t quite work, don’t put your head in the sand. Let us know…as specifically as possible…what’s not worked and why. We’ll happily work with you to try to turn things around.
CFOs are there to help the business succeed.
Good CFOs want to help each individual, and each department, in the business succeed, because that’s how the business as a whole gets to where it needs to be.
So we’re always up for a conversation about how to make the relationship between Finance and other departments better.
For a pro tip, things get pretty hectic in Finance when we’re sorting out that month’s accounts or doing the year end. Usually these are times of intense pressure which means there’s not a lot of room left in our heads for anything else.
But reach out. Ask for a chat at a time when we’re not busy with month-end and explain what you’re trying to do.
Any decent CFO will be up for that…and you never know, we might even be so excited that someone cares enough to have a proper strategic conversation with us that we offer to pay for the coffee…