Are You Being Productive, Or Are You Just Busy?
So, with everyone working at full tilt, how can the CFO improve the productivity of the finance team? This article provides my ideas and thoughts.
Acknowledge the difference between being busy and being productive
The single biggest issue we face is the mentality of the finance team itself. As many of us will testify from bitter experience, the finance team are known for their long hours and presenteeism – it is almost deemed a prerequisite of the role, a badge of honour that you need to wear. We need to understand and acknowledge the difference between being busy and being productive.
I found an interesting article by John Spencer, the editor of Pop Culture and Society, who has four rules for understanding the difference between being busy and being productive:
- Being busy is frantic, while being productive is focused.
- Being busy is fuelled by perfectionism while being productive is fuelled by purpose.
- Being busy is about working harder while being productive is about working smarter.
- Being busy is about being good at everything while being productive is about being great at a few important things.
There are several examples I can think of where this plays out in the finance team.
Figure 1: A typical period cycle – the y-axis showing levels of stress
The first is the frantic and focused point. If we take a typical period cycle for the finance team, illustrated in figure 1 above, the core activities (the blue line) tend to spike around financial close and report at the very end and start of the period. We then have a period of stability where we can perform tasks that are outside business-as-usual (BAU). However, during the close and report cycle we are working beyond the ‘optimal stress’ level. As shown in figure 2 below, research shows our performance is impacted, causing us to become more frantic and less focused as we battle to meet deadlines imposed upon us.
Figure 2: The Yerkes-Dodson Law: How arousal (stress) affects performance
There are ways of flattening out the activities of the finance team, keeping stress levels optimal throughout. These would include eliminating reconciliations altogether (by implementing integrated modules such as fixed assets) or performing reconciliations continually during the period rather than during the period close.
You may also want to consider the impact that your purchase-to-pay (P2P) process has on the finance team. Often, if this is inefficient, a significant amount of pressure can be experienced at the period close, as finance teams battle to get a grip on outstanding POs and supplier invoices with the knock-on impact on accruals and prepayments.
The second point is about perfectionism. There is a fundamental difference between being ‘exactly wrong’ rather than ‘roughly right’. In our experience, individuals and organisations spend far too long trying to be too accurate with the period end adjustments. There needs to be a sensible discussion about the level of accuracy and materiality and the time taken to achieve it.
The third point is probably the most important of all, and that is about working smarter rather than working harder. What we have seen during the last 18 months is finance teams working harder as they deal with the disruption and change. There has been an acceleration as we transform to smarter processes, however there is still work to do.
There are far too many finance processes that are manually intensive and that could be automated by implementing and using the right technology. Again, reconciliations (such as bank), cash allocations, P2P processes and reporting are good examples of where we can, and should, work smarter.
The last point, being busy is about being good at everything while being productive is about being great at a few important things, is also interesting when related to finance. We (the finance team) are often the glue that keeps the organisation ticking over. ‘All problems end up in finance’ is a phrase I have often used.
For example, any issues around the P2P process are normally sorted by finance i.e., chasing up POs or ensuring sales invoicing is up to date. Arguably, these are processes that should be controlled and managed by operational teams and yet it is often finance who are left to pick up the pieces. We have seen FP&A teams who are spending 50% of their time on sorting out transactional issues caused by operations, rather than spending their time using their skills to add real value to the organisation.
Embrace technology
Advances in technology have given us the opportunity to significantly improve the productivity of the finance team. Whether this is the use of advanced technologies, such as Robotic Process Automation (RPA), or the use of an integrated technology solution, significant benefits can accrue.
An example of the latter would be the implementation of a modern ERP platform with integrated modules for GL, P2P, sales and reporting. This can completely change the way the finance team works, improving productivity to new levels.
Make this your 2022 resolution: be more productive and less busy
Times have moved on and our research shows that staff wellbeing and mental fitness are near the top of the agenda in most organisations. It is recognised that we cannot continue to expect the finance team to work long hours over an extended period.
As we move to that time of year where we start to contemplate our resolutions for 2022, take a step back and look at how busy and how productive you are. I, for one, can justify my own existence by being busy.
But how productive am I? Could I spend less time in front of the computer, plan my time better and be even more productive? The answer is a definite yes. Also, keep abreast of the technology market and how this can be used to automate and improve processes.
If you are a CFO with a finance team reporting to you, there is the added responsibility of managing and leading others. Take the time out to challenge your team and ask them to look at how they work and whether they can be more focused, purposeful and smart. Challenge them to research how technology could be used to improve their job and the value they add to the organisation. Most importantly, if they come up with ideas, provide them with the support and investment to make it a reality.
If you do this, you will not only improve the productivity of your team, but you will also improve the health and wellbeing of the finance team members, a win-win for all concerned.
This article is sponsored by OneAdvanced
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