Stakeholders, by their very nature, have a keen interest in making sure their business continues to prosper. While everyone may have the same ultimate goals, the stakeholders within a business often look at things differently.
This can be a good thing – different viewpoints and ideas can lead to healthy debate, and ideas can be rigorously tested as various stakeholders contribute to the conversation. Whether that discussion relates to expansion plans, the launch of new products, changing the way the finance team operates or anything else, such input can only help.
The role of the finance function
Of all the different players in this process, it’s often your finance team that has a unique outlook on proceedings.
That’s because when it comes to major decisions within the life cycle of a business – a merger, greater finance automation, or digital transformation, for example – it’s the number-crunchers who have the figures and data to hand and are best placed to give an overview.
The ability to influence stakeholders is therefore vital to a CFO's job.
Financial expertise is key, but so is having the ability to effectively communicate this information to senior stakeholders outside of finance and being able to influence their decisions with the information that you provide. This can help a business adopt digital transformation.
For the finance function to successfully influence stakeholders, you must: know your stuff, be well-researched, have a relationship with your stakeholders that is trust-based, understand the larger situation of the business, and inspire confidence.
How can finance influence stakeholder decisions?
Understand your priorities
Being able to influence other stakeholders is sometimes easier said than done, though.
The first thing to understand is who the relevant stakeholders are, as this varies from business to business. In a small organisation, this might be easy to identify. But in a larger organisation there might be several key stakeholders – the owner, the managing director, and others.
Knowing which of them you need to convince is the first step of selling your ideas. After all, however good your relationship is with the owner, if the MD has an even better relationship then it’s him or her you might need to get on-side first.
Present things clearly
You need to be able to express your ideas clearly, but you also need your input to be welcomed by those who make the final decisions. Try to speak in the language that appeals to the stakeholder. It’s possible that the final decision-maker has a background in finance, but if not then it’s best not to use complex financial jargon when you make your point.
If it’s someone whose only interest is the bottom line, focus on that side of things. But if you’re trying to influence someone whose priorities are different – sustainability, faster turnaround times or international expansion, for example – then try to focus on those benefits when you sell your ideas.
Think of it as playing to your audience. Show how your ideas dovetail with the interests of the stakeholder, as well as with the wider goals of the business. It means you might be pushing at an open door.
(And it will do no harm to your own career prospects, either, if you show that you’re more than just a numbers person and you have the interests of the business at heart.)
Do your research – influencing difficult stakeholders
You also need to make sure you have done your research.
The final decision-makers will hear lots of ideas all the time – from colleagues, their peers within the industry, their families, friends they meet socially, and the dozens of emails that flood their inboxes every day.
If you want your idea to stand out, you need to have fully researched it first. “I think we should do X” is only your opening gambit.
You need to ask yourself questions like:
- Why should we do X?
- Do we have the capacity to do it?
- How long will it take to achieve?
- What impact will X have on our existing operations?
- Do we need to recruit to achieve it?
- How much investment will be needed?
- What are the market trends?
- Are our competitors already doing X?
- What are the biggest threats to its success?
You might not know all the answers, but your idea is likely to get little traction if you haven’t thought through these points.
At the very least, you should know what questions to expect.
The finance team’s USP
The reason you are potentially so well placed to be a strong influence on the ultimate decision-makers is the data you have at your fingertips.
Whether it’s revenue streams, seasonal variations, forecasts or productivity rates, you should be able to see it all, and you can use that to help formulate your ideas.
You can see where the peaks and the troughs are. Some of them might be down to external factors outside the organisation’s control, but you’ll be able to see how current working practices and previous decisions have impacted the business’s finances on an ongoing basis.
The information you have can highlight where there’s spare capacity within the business, which parts of the organisation have higher productivity, where the bottlenecks are, and so on.
And if you have cutting-edge systems and powerful accounting software, you can answer any questions with the click of a button.
Show that you’re a team player
It’s possible that some people within your organisation are protective of their turf.
Whether it’s because they’ve had a bad experience previously or they’re just naturally nervous about ceding control, you might come up against their natural resistance to accept ideas from people outside of the narrow lane they work in.
This is where having a strong relationship with the senior players within the business helps. But it’s also important that you show you are a team player.
So, before you start suggesting a new direction that the business might want to go in, make sure you understand the interests and KPIs of everyone you’re talking to. Try to highlight how your ideas are fully in tune with their own targets.
What are the implications for the sales team or your marketing colleagues? What is the impact on the HR and IT departments?
It’s a two-way benefit, because once they realise that you’re on the same side and you’re not a threat to them, you should have the added advantage of getting their own input.
How can Advanced help?
Ultimately, the final decisions might be out of your hands. But there’ll be more chance of your ideas landing on fertile ground if you and your team have the internal reputation of being on top of your brief and understanding how the wider organisation work
Having the right finance systems in place plays a huge role in this.
Advanced Financials accounting software from Advanced can provide you with all the data, records, forecasts and accounts from across the business at the click of a button.
What could be better than being able to demonstrate to others outside your team just how easily crucial data can be presented and analysed? This only adds to the view that you’re fully on top of your brief. Get in touch with one of our experts today.