Does Finance Need to Take More Risks?

Do we want risk takers in Finance? Does that conjure up positive or negative images in your mind?

I sent some thoughts on this out in the Supercharges Finance newsletter recently (if you haven’t yet signed up for that, click here and join the other Finance superchargers!). I don’t normally put the same content on the blog. But in this case I thought I’d share this more widely, because the culture in your Finance function makes a big difference.

In a very big sense, I believe we do need risk takers in Finance. But what risks do we want our Finance teams to take? And what are the benefits of developing risk takers in Finance? And how do you develop that culture?

What we’re really thinking about is being willing to be outside our comfort zone – willing to make mistakes, willing to be corrected, willing to potentially look stupid – all for the guaranteed reward of learning and improving and making more of a difference. I guess if you put it that way, it’s not a risk! The payoff is guaranteed!

Ah but the payoff is in the long term. In the short term, the risk is that when we get out of our comfort zone, we’ll make mistakes and it will embarrassing or costly. Is the guaranteed reward worth the risk? I think so!

The benefit of getting out of our comfort zone is in learning and developing, and so developing a team that will lead and support the business. Our understanding about the business, about Finance and about business performance will improve. And we’ll improve our skills in doing things that help the team and the business.

A YouTuber in the making?

Here’s an example of being outside your comfort zone and taking risks:

If you haven’t visited the Supercharged Finance YouTube channel yet, try and take a look. Feel free to send me some feedback too. You see, I’ve never really done video before. When I talk to my 14-year-old daughter about Supercharged Finance, and my social media stuff, she gets excited thinking I’m going to be like a famous YouTuber, like Joe Suggs or the other YouTube celebrities she follows (I haven’t quite understood why she follows them, but that’s because I’m getting old!). I let her down gently!Finance people need to be risk takers and get out of their comfort zones

I just woke up one day and thought, “I’m going to try doing selfie videos like I’ve seen others doing. If they can do it, why can’t I?” So, I wrote a script outline, then took my phone to the park one lunchtime (feeling a bit of a twit as people walked past!), recorded a 4-minute video, and uploaded to YouTube.

I may get ripped to shreds with criticism. I know the production quality isn’t perfect. I know that I’m recycling some previous material I’ve produced. I know the thumbnail photos are awful! BUT… at least I went out and did something. And I’ll learn. I’ll get over the weirdness of performing for camera in a public place. I’ll get used to where I have to look to face the camera. I’ve learnt I probably need a selfie stick! And I’ll hopefully at some stage get fluent enough to drop the script and sound more natural.

But if I hadn’t started, I’d get NOWHERE!

And it’s funny. This Supercharged Finance journey for me has been almost totally outside my comfort zone, doing things I’ve never done before. As a Finance person, how would I know how to set up a website, do social media marketing, do copywriting, make videos, do webinars?? And yet I took the time to learn and turn that learning into action, and you’re seeing the fruit of that right here, right now.

And after a while, you know what? You get used to being outside your comfort zone. The failures, the mistakes… (I used to get so fed up about failure! It depressed me how many things I’d failed at in my career and my life – more on that another time). But when you’re outside your comfort zone, failure is just more learning experience. And it becomes fun.

Coaching risk takers

One of the things you need to support that behaviour is a culture that doesn’t penalise mistakes or discourage people from questioning the status quo. And that comes from the top down. And it comes from the management style of every manager underneath.

Coaching develops an open mindset that encourages risk takingCoaching may sound like an airy fairy soft skill, but I’ve found it makes a LOT of difference. The essence of coaching is that it encourages people to find their own solutions, rather than expecting to be given the answers. They learn more, develop quicker and they keep on developing through their own effort because they develop on open mindset (I haven’t time to go into that here, but it’s what you have when you’re willing to get outside your comfort zone).

Whatever level of management you are at in Finance, I’d encourage you to develop and model coaching behaviour yourself, and make it a priority to send all your managers and team leaders on coaching courses. The more that becomes the way of doing things, the more the team culture will shift towards that open, mistake-accepting, learning, knowledge-seeking environment we want.

Balance for risk takers

But it’s not quite as straightforward as it sounds.

For one thing, what do you do when there are individuals who just keep making mistakes and don’t seem capable of learning from them and improving? Encouraging someone to “move on” can seem harsh to people, no matter how much coaching time you’ve put into someone.

For another thing, there is a balance to strike between using mistakes as learning opportunities, and keeping efficiency by enforcing a standard process. Questioning the standard process is fine, but changing it must be done in a controlled way. Otherwise things break down and bad things can happen for the business. Part of the way to address that tension is to apply the purpose-driven approach that I keep going on about. Make sure people know, and always want to know, the reason they are doing things and how it helps the business. Then their questioning of processes will hopefully always be set in that context and aiming towards that – “if this is what we’re trying to do, why don’t we do it a different way?”

Risk takers don’t need a chair

Finance comfort zone is behind a deskTo be honest, the comfort zone for you as a Finance person is really on your chair, behind your desk, in the office, in front of your computer. To get out of your comfort zone you’ve got to encourage the team to leave that safety, and go and visit other people in the business.

If they don’t have people around the business they naturally talk to, perhaps set up opportunities to shadow or swap with people in other departments. One place I worked had two weeks set aside every year to arrange for as many people as possible to do an exchange with someone in another department – people would spend a day learning about someone else’s job, and the next week they’d show someone from another department what they do.

The risk is that we show that we don’t know what we’re talking about, or that we don’t know things that people expect we should. But that is something that will happen more if we stay behind our desks! You can’t sit behind a desk 40 hours a week and expect to learn the business. Go and ask some dumb questions, be embarrassed, get over it, and then have a laugh about it with your colleagues!

Conclusion

Finance needs risk takers. We need people that are always learning and developing, who improve their knowledge of the business, and are willing to use their knowledge to change the business for the better.

Developing a risk taking culture is firstly about developing a team with coaching skills, and then about ensuring there is no penalisation of mistakes. That creates an environment of learning and desiring to learn.

Finally, we have to force people out of their comfort zones – take away chairs and desks, set up job swaps, or whatever. It’s worth it – for individuals, for Finance and for your business.

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