Analysis that drives real business decisions

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One of the most frustrating parts of working in finance is when a well-crafted analysis falls flat.

In the meeting with senior leaders you might get some head nods and a few “great analysis!”…

But if the business didn’t change after seeing your analysis, then it’s as worthless as the paper it’s written on.

In today’s newsletter, we’ll explain the 4 issues that keep finance teams from driving real business decisions with their analysis - and what you can do instead.

Let’s jump in!

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Issue 1: The business isn’t ready for it

My first major project as a new financial analyst was designing a better promotion structure for our sales staff.

My boss showed me the problem with the old promotion, gave me a bit of guidance, and gave me space to build.

It was a really cool project!

Until I presented it to the head of Sales who absolute threw up all over it! Think, big emotional reaction with a range of colorful words followed by my boss and I walking out feeling like idiots.

You see, we failed to inform the head of Sales we were working on the analysis. And based on his reaction, I think he wouldn’t have wanted us to if he knew.

The solution: Since then, my team never starts an analysis that takes more than 2 hours without first running it by the key stakeholder.

Here’s how that looks - I put all of my proposed projects on a single page and have a 30 minute meeting with the key stakeholder to help me prioritize the work.

On that one page is everything they’ve asked for plus everything I think we need to work on. And I take the first shot at prioritizing it before I present it to them.

This gives me the opportunity to see if their eyes light up when I’m talking about the work before I spend any time on it.

No excitement = not prioritized

If I really feel it needs to be done, I’ll make sure I’m selling it the best I can so they also see the value.

Issue 2: It’s a day late and a dollar short

This issue is more nuanced in nature.

Meaning you can do it 99% correct, but if your timing or approach is slightly off - the whole thing is thrown out.

The solution: The best finance professionals I know have this ‘spidey sense’ that tells them 1) when something is on-time versus late and 2) what objections the business will have with the analysis.

Getting ahead of these 2 things is more art than science but can make or break an analysis being leveraged by the business.

A late and slightly tone-deaf analysis will simply get shelved. And nailing the timing can often free up time to work on the objections.

My best tip for you to nail the timing is to listen for how many times something is mentioned by a business leader:

• 1 time: means they are thinking about it but not committed to the idea

• 2 times: means they think they want it but haven’t actually requested it

• 3 times: means you better be done with the analysis TODAY

Here’s a quick example: A senior leader is reviewing the monthly financial review and sees a small increase in customer churn for the month - nothing out of the ordinary, but not what they wanted to see so they mention it (this is 1). Two days later they pass you in the hallway and make a comment about the churn looking high this month (that’s 2). The next week they are preparing for the board meeting and circle the churn number on the page with red pen saying “WHAT IS CAUSING THIS”.

The rule of 3 has worked really well for me, so hopefully it keeps you out of trouble.

Issue 3: The business doesn’t care enough

It might sound silly, but it’s a common issue…

Finance teams will dream up and execute an analysis that the business just doesn’t care enough about.

It’s similar to issue 1 except that you went through all the right procedures and the got ‘approval’ from the key stakeholder to move forward with the analysis.

The problem is when the business needs to actually do something with the analysis, but that would cause them to burn energy/credibility/capital on it.

For example, let’s say you did an analysis for the head of Customer Service that proves your customer service chat team is much less efficient than your call team (which is backwards). But the CEO’s pet project is implementing the chat team and he is determined to make it work. Your recommendation is to scale the call team in place of the chat team - but the head of CS will never take action on it.

Why?

Because (s)he has 100 things on their plate and telling the CEO that they are giving up on their pet project will never be high enough on that list. It’s not worth their energy.

The solution: Imagine what conclusion your analysis will lead to. If the likely conclusion will cause a lot of effort/sacrifice/etc. by the key stakeholder, then maybe put that one on the shelf.

Issue 4: It’s too complex

I’ve seen amazing analysis die at the hands of business leaders.

I’m talking interactive machine learning attribution models that tell you exactly what’s driving results down to the penny.

Why?

Because the analysis was presented in a way that didn’t resonate with the business leader… and the finance team didn’t do the work of bridging the gap for them.

Back to the machine learning example - all the insights were there on the interactive webapp. But because the finance team presented it as a unique dashboard (senior leader had to remember where it was) with a million widgets on it (senior leader had to learn what it was saying), it wasn’t self-explanatory and the business leader never felt comfortable asking what it all meant.

A simple email would have been better.

The solution: business leaders are moving 100mph (for my kph friends, that’ll get you a speeding ticket) and your analysis is number 15 on a list of 20 things they need to accomplish that day.

So your analysis needs to be frustratingly simple and quickly help them understand our holy trinity of ‘what happened’, ‘why it happened’, and ‘so what’.

In summary:

Like most things in life, it’s the last 20% that separates good from great.

And when it comes to analysis, I see too many great pieces of work not quite make it to 100%.

If you want to be a respected finance leader who drives innovation and impact in your business, make sure your team’s analysis is set up to succeed by prioritizing with the business, keeping it simple, and getting sharp with timing.

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