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Empowering your staff with financial knowledge pays dividends

Kevin Phillips
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One of the best investments any company can make is to develop and empower middle managers to take ownership of their area of the business.

‘Taking ownership’ is a classic buzzword phrase - along with ‘empowerment’ – but that doesn’t make these words completely empty. Organisations thrive when managers genuinely take responsibility for the health of their areas of the business and have the power to make that responsibility count. When every cost centre is run as its own small business, how can the entire company not work better?

Responsibility for and power over money is a critical part of the equation

If all the financial decisions are made by five people at head office, there’s not a whole lot of ownership left for the managers of the various branches to take.

Leaving it to finance is the path of least resistance. The typical manager has risen through the ranks and has probably never studied accounting. Such a person is often insecure about their financial knowledge and is intimidated by complex ERP systems that have been built to make perfect sense to professional accountants - but hardly anybody else.

The professional accountants do not want ordinary managers to have their fingers in core financial systems either. Too much can go wrong and too much time can be wasted running pointless reports.

How can you get middle management up to speed with financials?

What you need is a bridge between the financial data in the ERP system and the brain of your middle manager. Something that’s as easy to use as Facebook but conveys all the important information - budgets and forecasts, reports, variance analysis - in a way that makes intuitive sense. There are plenty of tools out there to do the job.

Of course systems on their own can’t make anybody take responsibility, but they can help to create transparency. And when everyone can see what is going on, it’s much harder to point fingers or redirect responsibility somewhere else.

Not everyone will like this. There’s always a minority quite happy to live in convenient obscurity. But the vast majority of people will welcome tools that give them more information, and more ability to get things done.

When financial information flows freely across the organisation, as well as up and down the organisation’s hierarchy, it’s like oiling the machine: Things get smoother and you can push that little bit harder and faster without risking damage. There is no good reason not to do it.


 

 

Kevin Phillips is an entrepreneur who has built a successful business, and so has a solid understanding of the challenges and questions business owners face. He has degrees in commerce and accounting, and started idu Software with partners James Smith and Wayne Claasen in 1998. Kevin is fast becoming a thought leader in his field and makes regular comments in the media about current affairs affecting business as well as accounting, finance, budgeting and software. He is a columnist for Accountancy South Africa, Entrepreneur and Tech Leader and has been featured in the Sunday Times, Business Day, Enterprise Risk, Succeed and Cape Argus as well as being a guest speaker on Radio 702, Kaya FM and Summit TV.

 

 



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