CORPORATE BOARDS CHARGE FINANCE TEAMS WITH DRIVING BUSINESS GROWTH
CORPORATE BOARDS CHARGE FINANCE TEAMS WITH DRIVING BUSINESS GROWTH
70% of FDs questioned say their business is growing
Finance functions under pressure to deliver growth but maintain tight control on costs
Mark Tweed, Chief Financial Officer, GMAC UK plc, “Finance is now expected to be the facilitator of growth.”
Company directors are increasingly turning to their finance teams to develop a strategic plan for growing their business and to manage this process, according to a new report from Robert Half UK1. Based on a series of roundtable discussions with 70 Finance Directors (FDs) and Chief Financial Officers (CFOs) from across the UK, the report reveals that corporate boardrooms are now relying on their finance function to manage and support growth strategies in a way that would have been unthinkable a generation ago.
Finance departments are moving from being principally reactive, internal business operations, to taking a wider view of a business and the market in which it operates. Likewise, CFOs and FDs are more frequently being tasked with developing future business strategy.
Of those Finance leaders questioned at Robert Half Executive Round-Table Series, seven in 10 (70%) said that their business was experiencing growth, while a further 79% of those who could not report growth today predicted that it would return within the next 12 months.
Phil Sheridan, Managing Director, Robert Half UK said, “In uncertain times for the UK economy it’s heartening to encounter the positive attitudes of finance and business leaders. Cash remains king even for businesses in growth mode, but the finance function must ensure that striving for growth doesn’t break the bank. In the coming months finance teams will be looking to their leaders to develop corporate strategy and strive to break down barriers between finance and the rest of the organisation.”
“Technology will play a major part within the growth agenda, particularly for those organisations where headcount remains tight. Innovations such as cloud computing remain in their infancy, but any forward looking finance director will already be looking at their potential in a bid to win competitive advantage.”
“Business growth remains an achievable goal for those organisations able to formulate the right strategy and work single-mindedly, and collectively to achieve it. For the finance team, the opportunity to make a major contribution to that collective effort is one that must be grasped with both hands.”
Attendees to the Robert Half Executive Round-Table Series agreed that there were four main themes facing finance and business leaders:
A time for leadership – As organisations prepare for growth, there is an opportunity for senior finance professionals to provide genuine leadership. They have the potential to become enablers for growth and to spearhead the development of their teams as engines for growth. They can also become partners to the rest of the organisation and ensure the viability and sustainability of new business opportunities. Increasingly we are witnmessing a move to genuine & lsquo;management accounting’ – with CFOs dictating and establishing a business plan for growing an enterprise.
Mark Tweed, Chief Financial Officer, GMAC UK plc, “Finance is now expected to be the facilitator of growth. My role is to cascade this through the department so that team members can become growth leaders too.
”Linda Foster, Finance Director (UK region and Economist Online/Digital Editions) said, “Because we’ve been through the recession, the commercial teams are much more aware of the impacts of investment decisions.”
Richard Bee, Finance Director, Diageo Europe Supply, Diageo Scotland Ltd, “I see finance’s future role in terms of owning delivery of exemplary performance instead of just supporting it. We have become effective business partners to the rest of the group, but if we want to achieve the growth we’re aiming for, then everybody in the team needs to know what they need to do in order to deliver their part of it.”
Building the future finance team – Three quarters (76%) of attendees believe that existing employees will need to assume additional responsibilities, while 63% said existing staff will need additional training and development. Discussions also centred on the need for finance teams to be armed with the skills to support the growth agenda and the importance of instituting initiatives to develop and retain capable staff in a thriving environment.
Jonathon Parker-Stafford, Finance Director, Managed Support Services said, “While the size of the finance team has reduced overall, I’ve looked to upskill through bringing in the right people even if that costs additional cash. It’s a case of paying more for people who can contribute more.”
Alan Sievewright, EMEA Controller, BlackRock International Ltd said, “My aim was to pick people from a mix of backgrounds, not just from the accounting profession or other areas of the financial services sector such as the banks. People coming from industry have a good understanding of financial control and will often come up with a better way of doing things, which can be applied in a financial services setting.”
Guarding the bottom line – Margins continue to be squeezed while debt funding remains expensive and difficult to obtain for many businesses. Finance teams have an opportunity to make a significant difference to the corporate bottom line including driving efficiencies, striking a balance between risk and reward and ensuring the business has sufficient access to funding.
Jasvir Sanghera, Finance Director at Floors-to-Go, said, “I’ve learned more about managing costs and cash in the past two years than at any time in the last twenty.”
Andrew PL Walls, Managing Director, Group Finance Company Secretary, Qualye Munro Ltd said, “Looking to the future, I think there’s going to be a renewed focus on cost and whether we are doing things as efficiently as we can.”
David Jones, Financial Director, IGT-UK Group Ltd, said, “The recession has made businesses more aware of the benefits of having an effective finance function. It’s the companies with strong finance teams that have invariably performed best throughout the downturn and will continue to do so going forward.”
Prospering through process improvement – FDs understand the need for additional reporting/financial analysis but recognise that their finance teams will need support with the extra workload. They are also looking at how technology can help the finance team to do & lsquo;more with less’.
Ann Sillwood, Financial Controller, Damar Group Ltd, said, “As we look ahead to growth we need to have the IT systems to support that, in particular systems that we can use use to analyse our business to see exactly where our money is coming from.”
Adam Hurst, Deputy Chief Financial Officer, Entertainment One Group, said, “From a planning perspective, we place a lot of emphasis on forecasts, and we’re reliant on our commercial colleagues to help assess the potential returns from each opportunity.”
Martin Reynard, Finance Director, FST Technologies said, “Over the past 10 years we’ve seen a steady expansion in the amount of internal process and administrative work taken on by the finance team.”