RSS feedsWhen Tracy Ewen, FD-turned-MD at finance provider IGF, decided to spend some time as operations director, she knew it was going to be a challenge. But it was an investment in her future.
“To understand the business I had to understand our customers, so I was keen to leave the safety of the finance department and take on an operations role,” she says.
Ewen is not alone. Increasing numbers of senior finance staff with traditional finance backgrounds are beginning to think about how they can broaden their experience, and many companies are now encouraging their finance staff to take a couple of years away from the department and try front-line operations roles. But while these exercises can be very beneficial for both the business and the person involved, they are not always easy to get right. There are several challenges to overcome to make it work and careful planning is absolutely essential.
Active business partners
Perhaps the main reason why businesses want their finance staff to work on the
operations side is to give them a clearer understanding of broad business
issues. While in the past it may have been acceptable for finance staff to be
little more than score-keepers, today they are expected to be active partners in
the business. To do so, they need to understand how marketing, human resources,
IT and other elements of the business function.
“Modern finance directors are much more than simply accountants,” says Dean Murray, senior associate with Secantor, a provider of part-time FDs to small and medium-sized businesses. “They are policemen, ensuring that the business adheres to a regime of tight financial control.
They are fortune tellers, predicting events and their effects on the business. They are doctors, stepping in when things go wrong to help the business recover. They are counsellors, providing advice to the rest of the board. They are storytellers, narrating business performance to an army of investors, shareholders, journalists, regulators and the public at large.”
Steve Mason, FD at Siemens Financial Services, has sent his staff on similar soujourns and believes that finance staff can gain a great deal from the experience that will enrich their contribution to the company as a whole. “From a business perspective, you get more rounded, commercially-aware employees rather than just technical experts, and these individuals are more engaged with the business. They get a wider perspective and feel less like a consultant in a silo,” says Mason. “My experience is that they get more job satisfaction. A significant minority of people I’ve moved from finance into operational roles haven’t come back.” Perhaps the grass really is greener for some.
But it can be a two-way street. “Having finance staff spend time working alongside those in operations can help to bring a more financial perspective to the organisation as a whole,” says Owen Trotter, partner at private equity firm Key Capital Partners. “In organisations of all sizes, a lack of understanding of the pressures on other teams can result in poor inter-departmental communication. Job-swapping in this way4 makes everyone aware of the fact that they are on the same team, working towards the same overall goals.”
Those on the sell-side of finance staff agree with the validity of this approach. “I find that when I’m recruiting people for finance roles it is hugely beneficial if people have a broad range of skills to offer, rather than staying within a limited area of accounts,” says Hazel Smith, head of accountancy recruitment at Carlton Resource Solutions. “The more varied experience you can pick up throughout your career the better; even if it means moving sideways or working at a different level, it should be considered.” Indeed, talented finance staff with strong operational experience tend to make strong candidates for the chief exec position.
This is not to say that moving finance staff into operations is always trouble-free. There are many challenges facing the organisation and the individual, the first of which is gaining acceptance for the idea among operational staff, most of whom have a very stereotyped view of their finance department colleagues. The individual making the move will have to work hard to demonstrate that they are more than just a beancounter.
Just as importantly, it is vital to ensure that they have the skills to do the operations role moving away from the security of the finance department is enough of a challenge for anyone, so ensuring that the new area is one where the person has some experience, or at least aptitude, is crucial.
For Siemens’ Mason, it is important to get the level of support right. “It is a leap of faith for both the individual and the employer,” he says. “As a business we have a strong, non-functional mentoring role which is there to offer strictly confidential guidance.”
The finance officer who is making the move needs to recognise that it will involve a new way of working. “The challenges that finance staff face in moving outside their function area are usually the different styles of working,” says Kieran Colville, client manager at HR consultancy CHPD.
“Finance people are technical experts, but they often lack the strong influencing and consultative skills that are necessary for customer-facing staff. This can mean a move into a customer-facing function is very stressful.
“Furthermore, technical staff often feel the need to have complete information and understanding [of the area in which they are working]. Moving into a new area where they are not experts and do not have all the knowledge or information can be difficult. A way to minimise these potential problems is to provide them with training in areas like influencing techniques, and link them with a coach or a mentor, ideally someone who has made the transition themselves.”
Finally, it is important to ensure the correct balance between development
and stability. While in the long-term it may be desirable to move your financial
controller into marketing, in the short-term it may destabilise the business by
taking a key player out of finance and imposing a training need on marketing.
For this reason many businesses shy away from full-time transfers lasting two or
three years, and prefer either part-time or short-term job swaps. These allow
individuals to experience other departments, but also to keep their eye on the
ball in their own area.
It is also worth bearing in mind that transferring staff to and from operations
is not the only way to infuse finance staff with broader business acumen. One
way to create wider understanding and a more integrated working style might be
to literally spend some time in an operational role although it is not the
only way. “What we have found to be effective, through our work with the finance
divisions of many large multinationals, is to challenge perceptions about what
constitutes the core roles and responsibilities of a dynamic finance team,” says
Peter Holman, regional director for UK and Europe at Quest Worldwide.
“Finance people are in a strong position to make significant contributions to the achievement of an organisation’s goals and objectives for example, there is a natural flow from budgeting and planning into strategy development and execution so while many organisations have a robust strategy in place, few deploy it well and the finance department is well placed to make this happen. The critical factor is for the finance team to ensure that they do not operate as a separate entity, but get actively involved in every aspect of the business.”
Hands-on experience
However, while this may help, there is no real substitute for hands-on
experience of a different role. For her part, IGF’s Ewen is convinced that
operational experience is vital for all finance staff: “If you want to improve
your performance in a financial management role, you need to understand the
people and processes involved in your business both internally and externally.
I’d advise anyone to spend some time in operations to get out there and do it as soon as possible.”
Secantor’s Murray agrees: “It is critical that finance directors furnish themselves with a wide breadth of experience when trying to overcome one of the most common obstacles finance staff face colleagues claiming they have no idea what they’re talking about because they’ve never been there and done it.”
Ops is tops
Barry Dale, now regional associate with FDUK, providers of short-term FDs, used
to be the group FD of an automotive supplier. In his first six years there the
company grew from a £5m turnover business to a £60m turnover group. In his final
three years, he took on an operational role to help manage this growth.
“I was keen to take on more responsibility and was fortunate that the opportunity presented itself. I knew that it would give me experience of a range of new challenges that my previous financial focus hadn’t,” says Dale. He became involved in thorny issues such as staffing levels, product quality control and technology investment.
All this gave him ‘softer’ skills, such as people management, to add to his existing technical skills and prepared him well when the time came for him to continue his career progression as the chief exec of another company.
He offers this advice to anyone considering a move into operations. “Prepare yourself for the fact that not everything in life is black and white. In a finance role, ensuring that the numbers add up is the main responsibility and there is a clear right and wrong,” Dale says. “However, in an operational role there is so much more to consider. Overall it’s a great experience, and I’d thoroughly recommend it.”
