The Entrepreneur’s FD: From growing beans to counting them

To be a highly effective finance director in your business, you have to be up to date on all the latest accounting standards, be really up to speed on the latest developments in tax legislation and spend long hours in your office reviewing reconciliations or signing off VAT returns. That’s right, isn’t it?

Nope. In my own experience over the last decade, what I’ve seen is that FDs we could call highly effective need a rather different set of skills to make a real difference in the businesses they work for. So pondering my observations of FDs who work for my organisation, I’ve come up with my own list of seven habits for effective people – but just for FDs. Each rule is simple enough, but the trick is getting them all down in a single individual.

Rule One: Get the basics right
There’s no getting away from it: an accounting qualification and experience gained being a real-life FD counts for a lot. FDs will be judged initially on how well they do the basics: score-keeping, solving financial problems in the business and directing management attention to the things that matter financially. Although it starts here, this is not where it stops.

Rule Two: Grow beans, don’t count them
Highly effective FDs should come with super-strong business, commercial and strategic skills – the triumvirate. Super financial skills are merely a pre-requisite.

Rule Three: Manage the human beans, don’t just grow them
Teamwork is everything for the modern FD. As well as the ability to build their own team, highly effective FDs work effectively with the management team of the business and develop relationships outside the business to provide a strong network of support professionals.

Rule Four: Do Rule Three well
This one is so good we have said it twice. “Soft skills”, as those not in the know about their importance still call them, are the hard skills these days. Managing down, across and most importantly up to MDs and business owners is crucial. Being a great FD and doing the FD “stuff” is not sufficient in adding real value to the business. People need to be brought with you.

Rule Five: Make every word count
The way you communicate and get your point across is critical to making a difference. Influence and persuasion skills are massively important to be highly effective: if you don’t feel you do those well, go and get help developing them. Don’t just flounder and hope it will all be ok.

Rule Six: Believe!
Yes – be “passionate”. High energy levels and having some fun is an important factor in effectiveness. What FDs do is a serious business but it doesn’t have to be dour, and nobody likes a bore. Try to make the finance job a place people want to be: think about cultivating your team’s skills through making it a place where creativity and ambition have a home.

Rule Seven: Sharpen the saw
Keeping your knowledge fresh and finding time to keep up to date is vital in this fast-moving world. And difficult at times. This relates to all the effectiveness habits, not just technical skills.

FDs who want to make a difference to their businesses should work on these habits to become highly effective. Those that can master all these skills will find themselves in very high demand – I promise.

Colin Mills is founder and chief executive of The FD Centre