OVER THE past month, I have searched for good news. Not in terms of companies doing well, but in terms of what the future holds. Sadly, there is so much doom and gloom that it is impossible to ignore. But the uncertainty is not the full picture. The crisis, the recession and this ongoing uncertainty have changed and changed again the role of the finance director. But here’s the thing. The change has been for the good. Or, at least, that’s what FDs believe.
This really jumped out at me while reading the views of FDs at the 2011 Robert Half roundtable. Economist FD Linda Foster reportedly said that the recession has boosted the reputation of finance, especially with commercial parts of the business that would, no doubt, have otherwise called them party poopers. She said: “If you present them with a financial business case that indicates a ‘no’ and explain the rationale for that decision, they’re much more receptive to the finance view.”
And, she added, “This may change in time, as memories of the recession fade, but it’s a nice position to be in right now.”
I would speculate that this particular change is a certainty. As soon as the opportunities and the sales come back, the once lauded conservatism of finance will come to grate. But that’s only if finance maintains the financial guard dog role.
It’s clear that others have already twigged that their role has to be more than that. This is not new, of course, but enabling must be at the centre of the FD’s role. Martin Saurma-Jeltsh, FD at CEME, puts its quite nicely: “It’s great to have exciting visions for an organisation, but unless there’s solid financial engineering behind them, the wheels generally come off very quickly.”
Quite right, too.
The danger is that the current uncertainty drives FDs back into their financial holes, and we don’t want that. Hopefully, this month’s issue of Financial Director is a counter to that impulse. Our feature on cash mountains (page 34) emphasises the importance of clear thinking about what to do with the cash that companies have stashed away. The Secret FD (page 18) urges FDs to come out of their shells and be decent public speakers, while our cover story (page 24) concludes that quality FDs are essential to founder CEOs like Steve Jobs of Apple and others around the country starting up businesses, even in these troubled times.
In many senses, founder CEOs are the lifeblood of the SME world. Without these driven entrepreneurs, business is nowhere. And on the current economic landscape, even visionaries need guides and navigators. Which is where FDs come in.
Gavin Hinks, Editor