Question: How do you know when your Finance Department is becoming more risk tolerant?
Answer: You get to present your entire proposal before you are told “No.”
Possibly a joke you’ve heard a time or two at an office happy hour, but it’s certainly relatable whether you’re in sales and marketing or the finance department.
My point is that it’s undeniable that in any organization, the sales and marketing team and finance team have very distinct, and arguably polar opposite, goals and objectives. Despite each team directly affecting the success of the other, they each have different visions of how success is measured. Generally, the finance team targets to achieve certain profitability ratios, earnings goals and returns on investment, while the sales and marketing team’s focus is on closing top line revenue and winning customer loyalty. To sales and marketing, customer service often means offering the best price or the quickest delivery –which can also sometimes lead to a decrease in profitability. With different goals in mind, this can create tension and conflict within an organization.
If the sales team views the finance team as deal preventers with excessively strict guidelines and rules, while the finance team believes that the sales team holds no regard for accurate financial reporting or Generally Accepted Accounting Principles (GAAP), then how do you streamline the two teams to work together to become better collaborative business partners who can benefit the greater organization?
According to Brian McDonough, Research Manager, Analytics Software, IDC, today, finance departments are shifting from a stewardship role to one more involved in the strategic management of the organization. He states that while it’s still important to set financial management policies and ensure compliant reporting is completed in a timely manner, the finance team adds more value to an organization when it’s involved in establishing strategy and enabling other organizational departments, such as sales and marketing, to take part in execution of that strategy. McDonough says that this transformation has moved finance into a job function that must be more collaborative and flexible than ever before. Becoming a better collaborative business partner can help both internal groups develop and meet goals that benefit the greater organization.
I have had many different roles within finance and have consistently viewed collaboration and business knowledge as a strategic weapon. There are a few successful ways I have found to align the finance and sales and marketing teams.
- Share successes: Too often, the only time there is discussion is on a challenging task. Of course this drives frustration if the only time there is discussion is on a difficult topic. Join each other on a regular basis to talk about wins and opportunities.
- Agree to the metrics and goals and know the inputs, including ROI: Too often one side is measuring to something the other side doesn’t know about and therefore does not understand the other’s motivation. A colleague once told me – “If you ever are debating the merits of something internally, ask the other person what they are paid and goaled on and clarity usually follows”.
- Be accountable as a team: Finger pointing doesn’t solve anything – Finance and Sales/Marketing are playing for the same team. One side can only “win” in the short-term because a history of one side winning will ultimately create a bigger loss.
In order for the greater organization to grow, the internal teams must work together to streamline goals and objectives that directly affect one another. By working together, the finance and sales and marketing teams can build cross-functional teams to help improve the processes that each group touches, improving the employee, customer experience and the business as a whole.