Collaboration is critical in modern corporations, but it requires meetings, and meetings take time. No one knows better than the finance team that time is money, which is why CFOs are keenly aware of the growing amount of time their teams spend working with other departments.
Adaptive Insights’ just-released CFO Indicator Q4 2015 Report found that more than 50% of finance teams average nine-plus hours each week meeting with other parts of the organization. And 25% of the 533 global CFOs surveyed said their teams spend 13 hours or more each week in these meetings.
This focus on collaboration not only improves overall organizational performance, it also highlights the strategic capabilities of the finance function. On the other hand, collaboration means more meetings, and too many meetings are unproductive—participants don’t truly communicate and problems get deferred rather than resolved. Such meetings devour valuable time that the finance staff can ill afford to waste. (If you want to know precisely how much that meeting time costs, check out HBR’s Meeting Cost Calculator.)
CFOs understand that despite the potential time lost, collaboration is essential: 70% of CFOs surveyed ranked collaboration with other parts of the business as a top priority for 2016, and three-quarters ranked interpersonal/communication skills as a top priority for their teams. The trick is to find a way to share expertise and strategic insights effectively and efficiently. This takes more than face time—it requires all parties involved to operate from a base of shared understanding and trust.
High marks … and work to be done
In some respects, progress has already been made. CFOs gave high marks to their team’s ability to collaborate within the finance function and with top executives. Eighty-five percent of CFOs rank their team’s collaboration with operations as effective or very effective, and 78% of CFOs view their team’s collaboration with the C-suite as effective or very effective.
The trouble arises with finance’s capacity to communicate and collaborate with some other departments—most notably marketing. Only 49% of CFOs ranked their team’s ability to collaborate with the marketing function as effective, and just 10% identified the collaboration effort as very effective. And research indicates this relationship is worth improving. According to EY, in today’s digital economy a strong finance-marketing relationship can mean the difference between high-growth organizations and those that stagnate.
Three steps to better collaboration
So what to do? The CFO Indicator survey data offers some insights into actions that can hone collaborative capabilities through the development of better communications skills and the use of new technology and tools. Three useful steps include:
1. Show, don’t tell.
One mistake finance personnel sometimes make is to overwhelm their audiences with so much detail that listeners get lost in the data and lose the meaning. In a similar vein, finance executives can confuse members of other departments by rattling off values for specific metrics (for instance, “ROIC is X, ebitda is Y”) without explaining either what the metrics mean or what story they tell when looked at holistically.
Teaching finance staff to communicate the meaning of financial results rather than reciting numbers is one step to improved collaboration. Luckily, there are more tools today for communicating financial information clearly and precisely. Dashboards—with the capability to present information and insights visually—can, in a very real sense, help bridge the communication gap. Not surprisingly, 44% of CFOs cited development and management of dashboards as a top skill, while 53% of CFOs say their teams will execute a data visualization initiative in 2016.
2. Start on the same page.
You’ve probably been there: the meeting in which everyone understands there’s a problem, but no one is quite sure who has the authority to solve it. A full 55% of CFOs cited lack of clarity about who has decision-making authority when there is a disagreement as a top collaboration challenge.
No tool will resolve the issue of who’s in charge, but working from a single source of truth at least ensures consensus on key numbers, which is a start. Discussing and communicating who will ultimately make the call is another critical step. And a dashboard, in addition to providing a shared view of overall company performance, can also offer a window into the sources of problems, and by extension, what it takes to solve them.
3. Mesh on metrics.
Another key collaboration-related challenge, cited by 45% of CFOs surveyed, is other departments’ inability to align on key metrics. Misalignment can take several forms. Different departments may be working toward different definitions of success—classically, salespeople sometimes focus on revenue without regard to cost of sales. Departments may simply not understand each other’s metrics: The marketing team’s focus on “shares” and bounce rate may be as baffling to the finance department as ebitda is to marketing. More fundamentally, executives, board members, and investors may argue about which metrics (for instance, ROIC versus IRR) truly illuminate overall performance.
The finance team can provide tremendous value in these situations. Pushing toward developing clear metrics and identifying KPIs connected to a single source of truth will help standardize conversations about results. By ensuring that all metrics align with the organization’s overall strategic goals and by helping each department to fully grasp what the others are attempting and why, finance can facilitate real interdepartmental communication, without which collaboration is impossible.
Like every other activity, collaboration has a cost that can be measured by the time devoted to it. Armed with the right tools, high-performing finance teams can ensure that time spent in collaborative meetings is used well.
Want more survey results and insights from the 533 global CFOs who responded to our latest survey? Download the CFO Indicator Q4 2015 Report.