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Now why did I choose Finance over HR?

Years back when I had to choose between majoring in Finance (read Finance & Accounting) or HR I had gained some experience by having student jobs in both HR and Finance departments. Even I liked working in both functional areas I developed the greatest passion for HR and the thought of working with people development. So I was set on majoring in this area. However talking to people from other functions like Operations and Techincal I realised that people were always bad mouthing HR and didn't value the contributions they made to the organization. So I ran scared back to Finance thinking everyone could relate to what the Finance department is doing. Thinking that I didn't want to spend the first 5-10 years of my career trying to change people's perception of HR.

Years later I found myself at a leadership course last week and we were presented with the golden circle:

http://www.startwithwhy.com/

...and then I found myself answering the why (why me and my team are here doing what we do) with: "To change the perception of Finance". So I am back where I started - the reason I ran scared from HR is now the exact same challenge facing me in the field of Finance. My experience has even showed me that HR is actually much closer involved with day to day operations and seems to have a solid place in the value chain. Finance on the other hand is still categorized as "The Beancounters" and my strategy for my current position is to change the perception "From Beancounters to Business Partners" Therefore I ask myself: "Where did it go wrong?"

Nowadays every function finds itself faced with the essential question of how it creates value. While it might seem easy to answer for departments like Commercial/Sales - selling the products, Operation - operating the assets or Technical/Production - building or producing the assets/products, it is more difficult for support functions like HR, Legal, Finance, etc. So faced with the threat of being stripped down to a purely corporate governance function every support function is running wild trying to justify how they can create value.

So what happened when Finance really tried to create value by themselves? Financial crisis! Even before that there were several scandals (Enron, WorldCom etc.) to detriment the reputation of Finance. Other functions have not had similar major negative events working against them and that's probably also why HR now seems closer to the daily value creation than Finance.

So how do we reinstate the good name of Finance? One thing is that we need to become better business partners and show a genuine passion and understanding for other more value creating functions. I think that it is one of the most important discussions for the Finance function these days:

https://www.proformative.com/questions/how-be-great-business-partner#comment-6781

...but I see no actual stories shared of how it was done. I don't hear any successes that the rest of us can follow and try and apply to our own organizations. I see a lot of good intentions and suggestions of how to do it. But did it actually work in real life? So if you are out there with a good story of how you or your organization succeeded making Finance a truly recognized business partner and not just referred to as beancounters then share your story! Help reinstate the reputation of Finance and create some value for the companies we work for.

Can I say that my efforts have been a success so far? Not really but we have a clear strategy of how to get there however we have also realized that it will not happen overnight. It will take at least some years but when we finally succeed I will for sure share our story!

So back to discussion of choosing Finance over HR. I am not disappointed with my choice and I actually find the challenge rather exciting. Maybe I just shouldn't have run scared in the first place. 

Comments

Anonymous
(Director) |

Great post, would love to hear more about your strategy Anders.

Anders Liu-Lindberg
Title: Regional Finance Business Partner
Company: Maersk Line Northern Europe
LinkedIn Profile
(Regional Finance Business Partner, Maersk Line Northern Europe) |

Thank you!

Basically we operate with a pyramid of three layers:

The bottom part (currently the majority of our time is spent here) deals with all transactional accounting tasks as well as producing annual statements, corporate governance etc. All those functions the finance department can basically do on its own.

The middle part (where we are currently spending some time) deals with analyzing and understanding the numbers. So using all the vast data material produced in the bottom part and making it useful for financial analysis to identify cost savings, lost revenue opportunities etc.

The top part (where we would like to spend much more time) deals with business partnering. So leveraging the knowledge we have gained from our analysis and sharing it with our counterparts in Sales, Operations, Engineering etc. The key part here is to be able to communicate financial data to non-financial people.

You would think that all of sounds very simple, but first of all many organizations fail already at the bottom part so they don't get the basics right. If you don't get the basics right the pyramid falls. Even if you get the basics right many organization either don't know where to start analyzing the data or they lack a structured way of doing it. Those that get the analysis part right most often fails when trying to communicate it. So in the end no one wants to listen finance and all the good work that has been done is wasted.

Now I could elaborate much more on each of the parts however that discussion is probably better taken offline, but I would very much welcome some more discussion on these topics if anyone is interested in a round table or similar.

Ken Stumder
Title: Finance Director / Controller
Company: Ken Stumder, CPA
(Finance Director / Controller, Ken Stumder, CPA) |

Great post - I had a similar experience myself. I got into Finance while interning in a Big 4 recruitment department while in college. I don't believe there is a function of any company that isn't tasked with "proving value" though I agree Sales & Production enjoy (though they would not use that term) more central roles as there would be no business to account for without them. However, in today's world even those functions can be shared with/assigned to partners.

I currently work at a start-up and while I am not front and center so to speak, I don't feel like a bean-counter. It's been more of a systems/process enhancement experience than a straight accounting one. I believe that in this profession, a job well done often comes without fanfare. If there is a lot of discussion about the Finance dept, it is generally not the positive sort...

Speaking to another thread I was reading, how well Finance is appreciated has to a lot to do with the "tone at the top". How well is the CFO championing the group? Is your team adequately staffed to get the basics (billing customers, accelerating cash collections, paying vendors, and reporting results) done seamlessly and with a low error rate?

Only after Finance is able to cover the "basics" is it free to partner with the business. It is difficult, because most of us are not in it for the basics and it takes patience to do the necessary housecleaning to step up to the more interesting work.

Anders Liu-Lindberg
Title: Regional Finance Business Partner
Company: Maersk Line Northern Europe
LinkedIn Profile
(Regional Finance Business Partner, Maersk Line Northern Europe) |

Ken I couldnt agree more!