Insider business club: managing Finance teams

Insider business club: managing Finance teams

Our experts discuss how increases in regulation have upped the pressure on finance teams and their managers

With regulation tighter than ever and more competition in hiring staff,
is it getting harder to manage finance teams?

Neil Chisman, non-executive director of IFX Group and former FD of
Thorn and Stakis

Over the past few years we’ve seen questions asked around the issue of
whether things are getting harder and harder, bigger and bigger and tougher and
tougher. I think it has always been that way. Clearly, there are new challenges
of regulations, with Sarbanes-Oxley, obviously, and the various codes of conduct
and there are other regulations coming in. But things always change and managing
that change is part of managing the function.

Whatever it is that you have to do and whatever it is you have to comply
with, you have to make sure that you’re up to meeting the challenge of doing
that, through having enough people and having them well enough trained to do it.
As a management problem I don’t think it’s huge, it’s just one of the things
that you have to ensure that you can achieve. Whether it makes life tougher, in
terms of recruitment, I’m not sure.

It’s always better, I’m sure, to grow your own people, to develop the skills
you need and form a team, but I don’t think it’s these things that make it
difficult to recruit people. I think it’s other things to do with careers in the
industry and the prospects you can hold out for people.

That said, there are certainly some skills to do with the handling of people
that you need to get, whatever kind of manager you are, whether you’re an
accountant, a finance manager, or whatever.

A lot of the management of the finance function is about management, rather
than about finance and there are a few key skills you need to have.

For example, it’s fundamentally important that people know just what you
expect of them, so I have always made a practice of making sure that people have
a very comprehensive (but only one-page) job description, especially for key
tasks and to make it clear how I’m going to judge their performance by it. It’s
very important that you give them at least an annual appraisal, with an honest
assessment of how they’re performing and clear guidance as to what they need to
do to improve and how you intend to help them improve.

I think it’s very important that people are paid adequately, so the general
pay and benefits must be adequate. That must not be excessive, because that can
have negative effects, when people think about the money rather than the job,
but they also must not be too far down the scale. And, very importantly, you
have to communicate, communicate, communicate, and keep people informed even
when you don’t think they really need to know them.

How can an FD motivate their team?

Peter Davis, account manager, ADP

It’s an interesting dichotomy that you come across quite often. Pressure on
the finance team is growing. Meanwhile, many finance teams within organisations
have the moral obligation to be the policemen for

the rest of the business. So, while they’re quite comfortable in helping
budgetary arguments in favour of sales or marketing, they feel they have to keep
the department as lean as they possible can, to lead by example, which I suspect
gives them their own problems.

I agree that the obvious route of growing your own staff is one that
everybody would dearly love to take on board, but that goes hand-in-hand with
the realisation that in the cultural marketplace nowadays, very few people are
in jobs for life. So the turnaround, in terms of staff, or the turnover, in
terms of staff, is probably determined more by their ability to remain in a post
for three to five years.

To achieve that during that time, of course, they would be expected, for
their own benefit, to learn, grow and understand how they could move forward in
their career.

Of course, the role of the finance director is to encourage that development
within any finance team and get the best from the staff they have. It’s quite
difficult in modern circumstances, of course, to keep up with all the
legislation. One assumes that most FDs now turn to experts for support, when it
comes to legislation.

Consequently, the FD ends up being in a position where they are like the
middle of an hourglass where there’s a huge amount of information being rained
down upon them and they have to disseminate and make sure that the staff below
them pick out the activities that can maximise the return they make for their

It’s true to say that, in the overall spectrum of things, only 3% of people
have the talent to sell and I suspect there’s probably only 4% or 5% of the
population who have the ability to take on board those skills needed by a
finance department for its effective functioning. It becomes a question of
finding those people. It may well be you have to kiss a lot of frogs before you
find the person you’re looking for.

Having said that, of course, you need a good core of people in any team, who
are willing to come in and do a solid day’s work, for a solid day’s reward. Not
everybody wants to be developed and moved forward.

As many as 50% of a team may be quite happy doing a very good job and being
rewarded for that and any offer of future development or progress may not be
something that’s on their radar.

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