MANAGEMENT

What Finance Should Focus On When the Company Is Doing Well

If you work in a support function, you will not be asked for much when business is booming. If you’re a finance business partner, it might be even more difficult, as your sole purpose is to help the business do even better.

Let’s take a closer look at a few things you can do to help the business perform even better when they don’t think they need your help with anything. 

When things are going well, people tend to become complacent and performance will eventually start to slip

No one is perfect 

Let’s first remind ourselves that no one or nothing is perfect. There’s always room for improvement. Companies sometimes fall into the trap of doing what I call “Red-Flag Management,” which means they only do performance management on products, customers etc. that perform poorly and below expectation.

Over time this leads to “The Non-Performance Culture,” where the only focus is on improving that which is underperforming.

But when business is good, nothing is underperforming – or at least so it would seem. Here is a list of several initiatives you can do to help the business improve even when it thinks everything is doing well. 

Analyze the variances

Even when things are going well, there will still be unprofitable products or customers within a given product line or geography. Shredding those or making them more profitable will make business even better.

However, you will need to deliver the recommendation as the business won’t look for it on their own.

Find out where there’s still available capacity 

When you still have capacity left to fill, then you need to hunt for more business. Even if you’re out of capacity, you can start to put a business case together for adding more. That also shows that you’re proactive.

Identify the top performing unit

Then find out what others can learn from it. There’s always someone who’s performing better than others, even when all are doing well overall within the company.

What is the top performing sales team, plant facility or retail store doing that other units can emulate? You can start this project with an analysis to show that if every unit performed like the top performing unit, then the company financials would look US$xx million better.

How are you doing versus your competitors?

If you’re already beating them, then maybe you should set yourself an even tougher goal. If you’re not beating them, then the company is not doing as well as everyone thinks it is. It’s just rising along with the market. You need to learn from your competitors to beat them.

Hunt down complacency

When things are going well, people tend to become complacent and performance will eventually start to slip. Of course, you should be realistic and know that stellar performance can rarely be sustained in the long run unless significant shifts are done along the way.

So you need to bring good suggestions to the table instead of just being in people’s faces about how complacent they have become. 

The point is that, regardless of whether business is good or bad, there are things you can do make things better. 

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