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Editor’s letter: Time to get out

It was December 1997, barely six months after I had been
given the honour of editing this magazine, and I decided to take a calculated
risk. With hindsight, it was just a risk ­ little calculated about it. I told my
audience of FDs that they were wrong.

In partnership with another organisation, we conducted research into what FDs
thought about things, not least their opinions as to what non-financial managers
thought of finance folk. One question asked, “Is the finance function seen as an
agent of corporate change?” And 70% of the respondents said yes.

I didn’t believe it, and I said so. I had remarkably little on which to base
my argument, but I sensed I was right. Remember that the question was about how
finance was perceived and not what finance was capable of. But I told my
audience of tired, hungry, thirsty FDs that there was no scarier sentence in
business than when someone materialises out of nowhere and says, “Hello, I’m
from finance and I’m here to help.”

If I told you that they stood up as one and shouted “Hallelujah!” and “Preach
the truth!” I’d be a liar. The atmosphere was decidedly chilly; I could tell I
was going to have to buy my own gin and tonic at the bar afterwards. But I
believed then, ­ and I believe now, ­ that I was right.

I have given many presentations over the years about the role of FDs ­ – what
they do, why they are important, how to work with them. My favourite was when I
used exactly one PowerPoint slide. Just one, and for a 25-minute talk. It
contained one sentence: “The financial director is in an almost unique position,
apart from the MD, of being involved in all aspects of the business.”

There are many reasons why I like this slide: (a) it was told to us by a
former FD-turned-CEO, Geoff Mulcahy of Kingfisher; (b) it comes from our very
first issue, back in October 1984; and (c) it says “all aspects” ­ not “all
departments”, but “all aspects”.

Back to my audience of “agents of change”. The phrase these days is that
finance wants to “partner with the business”. Working alongside the chief
executive is great, but it’s not enough. Being a nice guy, approachable, with an
open-door policy is great, but it’s not enough, either. Understanding the
drivers of the business – ­ the technology, the market dynamics, the
interconnectedness of the cost base ­ is terrific, but it’s not enough.

What’s left? The people. Understand the people ­ and you can’t do that unless
you get out and talk to them and listen to them. I know, I know: you’re busy. In
other conferences I’ve asked my audience of FDs to stand in a line, in a room
positioning themselves according to their current job role between the window
(where I want all the unreconstituted beancounters and spreadsheet jockeys to
stand) and the door (the end of the spectrum for the true, total agents of
change and value creation). Time and again the FDs clump around the middle, but
slightly more skewed towards the door. Good. Now, I ask them, shift along that
line according to where you would like to be. And without exception (I tell a
lie: there was one, once) the FDs shuffle further towards the door. FDs want to
be value creators, not value measurers. Great.

So what’s stopping you? Rules. Rubbish systems. Reports. Compliance. Time.
Time. I think there’s one thing more. There’s a missing component and many FDs
suspect that that is so, but aren’t quite sure what it is. Ten years ago, tongue
ever so slightly in cheek, we suggested that, by 2014, a PhD in psychology would
prove to be more valuable to an FD than an accountancy qualification. In 1998, I
met the FD of Xerox Europe, a Frenchman, Patrick Ponchon, who told me about the
time he trained sales and marketing people for finance roles. “We managed to get
some very good finance people,” he told us, “and with their knowledge of the
business they can bring a lot of ideas. They are very creative.” And get this:
“Their capacity to communicate ­ even to impose ­ difficult things, is higher
than traditional finance people.”

I fundamentally believe the difference between a successful company and a
failed company, ­ or between a good company and a great company, ­ is culture. I
don’t think they teach you that at beancounting school, but it is so important.
In my dozen years in this job I have met countless FDs, ­ almost all of them
really clever, technically switched on and in control. The ones who have
impressed me most are those who transcend the technical demands and burdens and
have an instinctive feeling right down to their fingertips about how their
organisation works – ­ how the people work. And they don’t get that from behind
their laptops and spreadsheets.

The acid test of the culmination of the true revolution in finance will be
when someone from finance materialises out of nowhere behind a non-financial
manager, and the manager exclaims, “Thank God you’re here!”
This is not only our 25th anniversary issue, it is also my last. After 12
years, it’s time for a new challenge. I cannot begin to offer enough thanks to
all my colleagues I have worked with over the years, as well as our extended
family of freelancers. My thanks, too, to all the experts (and their PRs) and
advertisers who have helped make this magazine an editorial and commercial
success. And finally, unending thanks to you, the FDs who read this magazine. I
couldn’t have survived 12 years in this job if you weren’t such a great audience
to serve.

Andrew Sawers, editor

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