The ‘F’ Word: Finance – It’s Not a Dirty Word
By: Susan Ruhl
Finance. Accounting. These can be two very scary words for a lot of people, but why? When engaging in conversation with someone who isn’t a “numbers person”, sometimes it may seem as if the best route is to avoid the conversation entirely, and pretend like nothing is happening. But the reality is, things are happening, and numbers are important. We as employers and employees should feel comfortable having discussions revolving around finance and accounting, and even out in the open. Trust me, those teammates in accounting and finance already know that you are not a CPA or a finance professional. It’s OK!
While no-one expects you to be a finance expert, it is critical to the health of a company that all employees have a basic understanding of these three critical components- how money comes into a company, how money flows out, and the impact we can have on those activities. At ICC, we believe that the success of a company lives and dies by its employees. In other words, not only are the employees engaged in their work, but they also work to understand the business and how they can impact the bottom line.
If employees shy away from finance and accounting, then how can we bring them into the fold? As with everything in a company, it starts with leadership. Too frequently are finances cloaked in a “don’t ask, don’t tell” mentality. Leaders feel that if they share the internal workings of the company’s finances, employees will not act appropriately. However, what we, and research, often demonstrates is that if we share with and educate our employees on the numbers and why they are important, the momentum gained in good times and the support gained in tough times significantly outweighs any negative experience a business may encounter.
A great, (and comfortable) way to increase transparency is to create a dashboard of relevant numbers that is shared with teams and your organization on a consistent basis. For example, at ICC each month we share how each business is doing in relation to the budget. Is our Outplacement division performing as well as we expected, or is it outperforming expectations? We also share with all employees where the organization stands on various profit margins and what that means for the strategy of the business. It is my job as the CFO to educate all ICC team members so that they understand the numbers. It is our teammates’ jobs to listen, question, and take ownership for their impact on the bottom line.
For a company to be financially intelligent, the leaders must realize that education is not fatal, and employees need to understand that by learning a few key indicators, they can ask questions and understand how the company is operating. Whether you are an employee or a key leader, it is a two-way street and it all starts with you. What are you doing to learn how you can impact the bottom line? What do you share with your team, employee, or organization?