Insights, Decisions, and the Role of the Finance Team
September 30, 2019
By Martijn Tel, CFO at GLG
It’s been a great first few months as CFO of GLG, the global knowledge marketplace.
I’ve been a CFO at several different companies in the information services and B2B SaaS space over the years. But GLG invented its category; there’s no precedent for what we’re trying to do. That makes our work especially exciting. And as I settle into the job, it’s got me thinking about the role the finance department plays in any pioneering company.
Some people think finance’s only duty is to pay the bills – or, in more technical language, to record the financial effects of business activities – but there’s far more to it than that. The way I see it, finance’s job is to be the single source of truth within an organization.
There’s an old joke: if you want to be confused about what time it is, ask two people. In a decision-making scenario, you can’t assume that two people are acting on the same set of information. What’s obvious to one part of the business might not be to another. The finance team’s job is to harmonize these differences and make sure that everyone is drawing from the same information, thus enabling data-driven decision making.
In small companies, that’s easy enough. It doesn’t take a lot to keep 10 people who share a room on the same page. But as businesses grow, they also get more complex. It’s up to the finance team to make this complexity manageable.
How? By following the data wherever it leads. The day-to-day work of a business produces huge amounts of information. Our job is to dig into it like a gopher, tunneling as deep as we can to extract key insights into what drives the business. These findings, in turn, help the leaders of the business – from the CEO to a team leader – make decisions with confidence. In many ways, our team’s role within GLG is analogous to what GLG does for our clients: we deliver insights that drive better decisions. That requires mutual trust, an understanding of the larger strategic context, and responsiveness as circumstances change.
So paying the bills is obviously important, but it’s only part of the story. A truly effective finance team can – and should – have a significant impact on the rest of the company. We partner with each part of the business, and we make sure that everyone knows exactly what time it is.
What role do you think finance teams should play in a company? What’s been your experience working in, or with, the finance department at your firm? Let me know in the comments.