One-on-one Financial Coaching
Every decision made in a business has financial implications. It is therefore clear that financially informed managers will make better decisions. Yet there are some senior managers in leadership, technical or other non-financial spheres who are not only unable to speak the language of business, but who fully lack an appreciation of how their actions influence the organisation’s financial results. While skilled in their particular role or discipline, these managers are sometimes lacking in commercial literacy and, in some cases, are hampered in fully exercising their inherent business acumen. In order to enhance their strategic role in the business they need is a sound working knowledge of financial terminology and information, and its implications.
However, finding the time, and the appropriate setting, in which to gain these insights can present a problem. Attending a financial training programme is in some cases not the solution when it comes to more senior managers. A group programme is unlikely to cater for what are likely to be the unique needs of such individuals and fitting in with the scheduled timetable of lectures can be difficult for the busy executive. The freedom to focus on issues of particular relevance to the individual manager’s situation and to ask questions about concepts that they need clarified is also a consideration. In some cases senior managers are unlikely to achieve the desired outcome in a group situation, often for fear of having their inadequacies exposed in front of others. Some individuals will emerge from a group financial programme with a vocabulary of jargon which they don't really understand but which allows them to engage in 'finance speak'. The danger is that a lack of insight into the concepts behind the terminology can lead to poor decisions and even worse consequences.
What then is the solution?
The discrete and personalised approach of one-on-one coaching offers a highly agreeable remedy for the technically skilled non-financial senior manager. Interaction on an individual basis allows me to assess the manager's particular needs and to provide a tailored response that leads him/her through an appropriate selection of discussions and exercises that will clarify and put into context, a wide range of essential financial concepts.
Experience and ongoing interaction have allowed me to specialise in developing material and processes that give managers a sound understanding of such vital areas as what exactly costs are; how accountants calculate profit; why profit is an "opinion" and cash flow a fact - and how a profitable business can fail; and what questions to ask in the interpretation of financial statements. Effective coaching, however, requires a much broader focus than a simple ‘How to read a Balance Sheet’ exercise. After all, one needs to look at more than the financial statements to assess a business's position and considerably more to gain an understanding of where and how specialist decisions impact on the business. Providing an insight into the overall function of a business requires a broader discussion of such issues as the legal environment of business; the effects of price changes and the relationship between margins, volumes and expenses; cost allocation and the budgetary process; and how to motivate requests for capital expenditure.
The aim is to provide the individual with the background needed to understand the impact of decisions made on the business’s profits and cash flow, and to be able to understand reports on the performance of non-financial departments in financial terms. Non-financial managers should ultimately be comfortable discussing financial decisions, and in a position not only to ask questions with confidence, but to evaluate the answers.
It is my experience that potential candidates for one-on-one coaching fall into two categories. There are those who, by virtue of their position, are expected to have a sound working knowledge of finance, and, acutely aware of their shortcomings, seek help themselves. More recently, however, I have seen an increasing need arise amongst a group of senior managers whose problem may best be described as "I try to avoid getting involved in matters related to finance lest I expose my ignorance." These are the individuals who, understandably, shy away from attending financial programmes and my contact with them is generally through referral. In both cases, individual financial training provides an appropriate and discrete solution.
My interaction with the manager takes place over an initial period of two full days, with a third day at a later date. This additional time can be divided into two half days or a series of shorter meetings to address specific issues as they arise. The programme is presented at a discrete and neutral venue which allows for uninterrupted focus on the matter at hand. The fee includes my preparation and any additional research necessary on my part to address company or industry-specific issues which the individual may need clarified.