Become a visionary finance leader

Do you know why finance exists?

It’s a weird thought exercise, but it’s critical to becoming a visionary leader.

Let’s think about it in terms of a new startup: there is 1 person (the founder) and they are trying to solve a problem in society with their product or service. Where is finance in that business? It exists in the basic financial model that the founder created in Excel or Google Sheets to figure out if starting the business would be worth the effort.

The model is probably a few simple inputs like monthly customers, revenue per customer, churn rate, and expenses for the company. Simple, but effective. Each number is an assumption they found on the internet or going by gut-feel.

From there, the founder will hire a bookkeeper when they start making some money. But the founder is still doing all the finance work. They are likely looking at the financial statements and making decisions about where to invest in the company, if they should be worried about cashflow, and updating their simple financial model with actual results and better projections.

finance becomes its own unique team within a company once the financial modeling, reporting, and analytics becomes too difficult for a founder to do on a basic spreadsheet. Founders have better things to do, so they are wise to delegate that work to someone who has expertise in the area.

Every company in the world has gotten to this point. So there is a well-worn path for how finance teams operate within companies. Obviously every company is slightly unique, but 80-90% of the finance work is the same at every company.

It’s our job as finance leaders to know what that common system looks like and implement it in our company.

I call that system The Finance Operating System (OS for short).

Being a visionary leader means you are able to implement that operating system and get it to produce the outputs you desire in your team:

• Proactive

• High performance

• Healthy culture

Let’s explore that finance OS and how you can leverage it to become a visionary leader:

What is The Finance OS?

Every company in the world over a certain size has an finance team. That means there are thousands of finance teams out there doing similar work in similar ways.

That’s important to us leaders because our main job is to bring a predictable structure to our team and our organization that allows us to add consistent value as an finance function. From that consistent structure we are able to communicate a compelling vision, develop a high performing culture, get more done with less, and attract the best talent.

Below is a breakdown of the most critical aspects of that Operating System:

People

Your team is the foundation of your success. Bad people on your team almost always means you’ll fall short of providing the value you want.

Data & Tools

You can have the best finance talent in the world, but if you only give them Google Sheets and bad data, you will not be competitive. To have the best finance team, you need to invest in great tools that allow you to analyze good data.

Reporting

The foundation of any great finance team is great reporting. But getting the right balance of reporting is tricky in a growing and evolving organization.

Analysis

Uncovering the root cause of the change in results is easier said than done. But a healthy finance team is constantly bringing relevant analysis to its key stakeholders to consider.

Forecasting

The holy-grail of finance. Great finance teams are always thinking about how their analysis will feed into their forecast and help them better predict the future.

Consulting (business partnering)

Once you've done a ton of great work in reporting, analysis, and forecasting you need a way to communicate it so your company will take action. Often referred to as business partnering, this is the most difficult but rewarding part of the finance role.

Your vision = your success

It’s common to see finance professionals working long hours and late nights. But it’s not common to see finance professionals accelerating their career. Since that’s true, it means hard work alone is not the answer to growing your career.

In the last 10 years, I’ve learned first hand that my success has been directly linked to my ability to set and execute a vision.

As an individual contributor (financial analyst and senior financial analyst) it was all about setting my own vision and executing that. But as a leader it became my ability to set my team’s vision and motivate them to execute it.

Either way, the difference between the most successful finance professionals and those who simply work hard but go nowhere: setting a clear and compelling vision.

Let’s walk through how to set your vision:

Vision framework

The framework above is the same one I've been using for years at all sizes of companies... which means it can work for you. Let's discuss what each element of the framework is and how you can use it in your role:

Pillar: I’ve already pre-populated each pillar with the 4 value-added outputs of finance from earlier in this chapter (Reporting, Analysis, Forecasting, Consulting). You are free to change these as your role changes, but most finance roles will add value in these 4 ways.

Vision: If all goes according to plan, what does this pillar look like on a daily basis? How does it feel and how do you think the best version of your role should function?

Starting Point: The current state of your role within that pillar. The key to identifying your starting point is to be honest with yourself about how far you are away from your vision (more about this later).

Interim Steps: These are the logical steps between where you are and where you want to go.

What’s the current state

The best way to come up with your Starting Point is to work backwards from your vision. Identify all the aspirational nuggets in your vision to ensure you have a comparison point for each.

Here’s what I mean using the previous reporting vision example:

• 80% automation

• Established backups

• Business partners happy with speed and quality

• Proactive retiring of reports and/or consolidating

Now we have to ask ourselves where we stand on each of these:

• What % of our reporting is automated? How do we measure that?

• Do we have backups for every report? If so, can we test the documentation?

• When was the last time we sent our business partners a survey? How did we score?

• What was the last report we shut off or rebuilt smaller/better?

Just like you did for your vision, package this up for your starting point and drop it into the framework above.

Your interim steps

This is the hardest part of setting and executing the vision: determining what steps to take to achieve your vision.

There are nearly endless possibilities on how to achieve your vision. Using our previous example, you could start by automating reports. But if you started there, you might automate a report that should be sunset. So should you sunset first and then automate?

It’s completely up to you and your instincts. Unfortunately I can’t give you a recipe on how to do this because every leader has their own way of solving their team’s unique problems.

But I promise you that I’ve done things in the ‘wrong’ order more times than I’ve done them in the ‘right’ order. It’s a part of learning. The most important part is that you take action and set up baby steps that are achievable for your team to accomplish and celebrate.

In Summary:

Your ability to be an amazing finance leader comes down to setting a vision.

Follow the steps in this deep-dive and you’ll quickly find yourself out ahead of your peers.

See you next Saturday.

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