The question is important because last week I ended by saying that even when well-intentioned and motivated people are eager to succeed they still face the challenge of understanding where and how to focus their time and effort and so may not necessarily take any action. It’s like they freeze, or worse know they should do something but instead choose to do nothing. And in our organisations, we might see something in the numbers that should be acted upon, a worrying trend perhaps we’re profits are declining or an opportunity to grasp perhaps by finding some unused budget to reinvest elsewhere, but sadly no action is taken. Why?
In his book Human Action Ludwig von Mises suggested that three requirements must be present for individuals to take action, these are a:
1. dissatisfaction with the present state of affairs;
2. vision of a better state; and
3. belief that they can reach the better state.
So back to our mowing the lawns example, we will mow our lawn only when we are dissatisfied with its present condition, believe it will look better having tended to the job and know how to perform the necessary task.
So similarly if we in Finance wish our organisations, colleagues, business units, customers, suppliers, and other stakeholders to take action on our advice, or controls we set out, we simply need to ensure we take them through these three steps. For instance, in recent times decision makers have been bypassing Finance teams to self-serve themselves with insights because just like on the front lines between organisations and their customers, a decision maker will switch suppliers of decision support when they become dissatisfied with their current supplier and believe another supplier will serve them better and are able to switch. Likewise managers and employees will subvert controls around travel expenses when they aren’t happy with them, can see a better way and believe they can get around them without getting caught or impacted adversely.
And even within Finance teams, we see these 3 steps play out with finance leaders struggling to keep hold of talented staff and ensuring their teams are continually engaged in adding value to the organisation. Particularly when finance employees are dissatisfied with their current employer, see a better state where their skills are put to more meaningful use or are more appropriately rewarded, then decide to leave their current jobs to move employers or even become solopreneurs acting as financial mentors to other businesses (notice the rise in virtual CFOs for instance).
Now in Finance we’ve a number of strengths that make us ideally positioned to take others, including our own teams, and even individually, through these three steps. If we’re leveraging our broad view of our organisations, our access to data & information, as well as access to decision makers we should be able to identify current states of dissatisfaction (step one). Our training and experience should allow us to translate what a better state looks like in terms of financial outcomes (step two), and even our perceived independence and integrity that comes with working in Finance, putting the organisation’s interests ahead of our own function’s, should enable us to have some credibility to help foster a belief in our proposals or controls that others will buy into (step three).
Whilst there are Finance professionals doing these three steps well, particularly those in more commercial-facing Finance teams who interact a lot with customers as well as across other functions, a lot of the rest of us are still sitting behind our desks not getting out there, and so failing to interact with others in our organisations. And because we’re not fully utilising our strengths or demonstrating the complete value we can offer them, we are putting ourselves at risk of becoming irrelevant.
Tackling Incentives with the Right Skills
Unfortunately when it comes to improving the incentives to better influence others it’s simply not the case of leveraging those hard-type technical skills that we’ve been typically trained and certified in, so they won’t be covered in accounting exams or on Finance courses. They’re more softer, communications-type, influencing, real people and business skills that are becoming increasing important in our organisations and they are the type of skills we get better at by practicing them again and again.
And that’s why we bring on guest mentors to our Strength in the Numbers Show, to share with you their stories and hard won lessons and practically figured out how leverage their strengths to take others through these steps to contribute more value in and for their organisations. And help you learn how to leverage your strengths in the numbers faster.
So what techniques would you recommend to improve the incentives to influence others? Or what steps would you take yourself?
The author Andrew Codd is the producer of the Strength in the Numbers Podcast which interviews real finance practitioners to break down their hard won lessons and deconstruct their practical methods that work on the job and which you won’t typically find in textbooks or exams so that we create more influential finance professionals worldwide who solve meaningful problems for their organisations and in return have fun, rewarding and successful careers in finance.