Guest post by Mark Nicholls, Managing Director of Tectona Partnership.
We’re all familiar with the role of the Finance Director – ‘a person who is in charge of a Company’s monetary resources and qualified to take care of its fiduciary duties’.
However, it shouldn’t stop there. There are many other ways they can contribute to the well-being of the business on a broader level, providing a senior supporting role to the CEO or MD. With the demands placed on them changing at a rapid pace, it’s worth revisiting the role of the FD and the skills and competencies needed for them to be truly effective.
The MD:FD partnership
An effective FD will act as a strategic thinker. They will analyse risks, opportunities, and threats and evaluate them to help shape business decisions and to future-proof the company’s financial health.
Working together with the MD, they will create an environment where investment is directed at improving performance and driving efficiencies, optimising how it is run. Crunching the numbers is just a small part of this process.
The FD’s role requires them to be a good listener, to be a sounding board for the MD, to ask the right questions and provide an objective view. Sometimes it falls on them to disagree with their MD’s ideas and decisions, for the good of the business. They must ensure commercially astute decisions are always made. They’ll need strong negotiating and communication skills to resolve thorny issues whilst maintaining a respectful working partnership.
The voice of the business
An effective FD will understand the value of good communication. It breeds confidence in the management of the business, promoting a strong reputation valued by investors, clients, stakeholders and even potential buyers.
Staff and suppliers appreciate being kept informed too. It keeps them motivated, on side, and more productive. They feel more confident in the financial performance and long-term stability of the company. An FD that takes on a leadership role can share the vision of the business, manage expectations and give its workforce direction. They will influence performance, staff retention and levels of absence.
Whilst a busy business owner, MD or CEO doesn’t always have the time to focus on communication, it’s easy to embed it into the company’s ethos when working alongside an FD with an aptitude to connect with stakeholders at all levels.
An effective Finance Director will often act as go-between, communicating ideas and decisions up and down the management chain, from MD to management and team leaders. This is where soft skills of listening, communicating and influencing are important in equal measure to ensure information is free flowing and there are open streams of communication to allow ideas to flourish.
This open, ‘visible’ relationship can help when times are tough too. When difficult decisions are being taken, requiring change and co-operation, an FD with well established staff relations will fulfil a crucial role, using an inclusive management style to keep staff consulted, informed and feeling part of the change process.
At Tectona, we focus on providing Financial Directors with a broad range of financial and leadership skills, so that they can add value on many levels. One of our clients recently commented: “Our Tectona FD was a real asset to our team. He was able to get us talking both formally and informally and embedded communication barriers seemed to evaporate. What’s more, he understood our key drivers and soon we were making decisions based on commercial facts – a bit of a novelty for us!”
We believe strongly that good communication should be part of the DNA of any business. When you talk to people, and you listen, the results are tangible and speak for themselves.
Tectona Partnership helps business owners sleep at night by providing one of our 15 commercially savvy finance directors embedded in your management team. A part time solution is usually the most effective for the smaller business. We make sure you have the necessary management information and strategic insight and will tell you what you need to know, when you need to know it. For more information please contact email@example.com