When you think of a ball and chain, comical images of a prisoner in stripes trapped in a confined space manifest themselves in one’s mind. The ball and chain serves the purpose of holding back the convict, limiting their movement and stifling their progress. No expectation was placed on the prisoner for problem solving, creativity or initiative; the necessary ingredients for high performing teams.
Allowing people to be creative and to choose how they use their resources makes them more efficient. In the ball and chain environment there is no trust. The motives of workers are not aligned with the guards or social systems that surround them. Work is forced on individuals and their efforts are taken for granted.
Unfortunately the CFO often plays the role of head warden, the enforcer and the controller-in-chief. Where control is not for the quality of work or the rehabilitation of inmates, but the only focus is on the use of resources (stakeholder funds). In this circumstance the finance function is detached, distrusted and aloof.
But what role can the warden (finance team) play beyond control?
Borrowing from Douglas McGregor’s Theory X & Theory Y, if you want to get the most out of the people around you, focus on core human needs that drive motivation. That is aligning the organisational and individual values, provide a challenge, enable autonomy, instil self-worth and provide opportunities for personal growth.
So how does the Finance function facilitate Douglas McGregor’s Theory Y?
Instead of focusing on control, explanation and potentially punishment, the finance function can zero in on resource flow. As Brian Maskell, the LEAN Accounting leader would say “business is all about the efficient flow of resources in and out of your organisation”. The challenge is to link resource allocation with capacity management and master the task of consistently assessing the allocation of resources, not reduction of resources to meet the changing business needs.
With the finances at our fingertips coupled with the insights on income and expense drivers, the finance function is placed to provide key decision making information on the impact of what is done not how things are done. You empower the departmental ‘experts’ to determine how things are done based on the resources available. The Finance function is then placed to provide the feedback on the success of ‘what is done’ and facilitate innovation and growth.
Of course in the ball and chain environment there is no competition, no experts driven by the need for personal growth or fulfilment. As a result skill, efficiency and innovation are low and largely irrelevant.
However, with the systems and tools available to finance leaders today, you are perfectly placed to play the role of the business growth catalyst. You, through your understanding of resource flow and allocation of finances can stimulate positive change, engage managers, and encourage a proactive, positive problem solving environment.
The question is are you taking advantage of the tools and systems available to you? Are you making sure the ball in chain view of finance is a thing of the past?
You can read more about Professional Advantage and budgeting and forecasting here.
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