Carlson Thought Leadership in Finance & Technology

Do You Speak the Same Language as Your Budget Owners?

September 23, 2014 / by Ethan Carlson

I recently visited a client in Tokyo which was an interesting and exciting experience.  I have traveled extensively through Asia in the past and have worked abroad in my career, but had never been to Japan.  I was visiting Wacom, the world’s leading manufacturer of pen tablets, interactive pen displays and digital interface solutions.  Before I continue, I would like to express my gratitude to my hosts, Usuda-san, Okino-san, and Hattori-san, who made the trip both memorable and productive.

 Pre-boarding Selfie

Traveling internationally has its challenges - different currencies, cultures, and most importantly, languages.  These challenges make travel a thrilling experience, but can also make it daunting.  I consider myself a seasoned traveler but every time I set foot in a new country, I’m presented with a new test of my cross-cultural capabilities.  I had a lot of time on the flight home (14 hours to be exact) to reflect on this and think there are some applicable lessons from this trip that can be applied to the budget process, particularly around the topic of language and communication.

To set the stage, I can speak exactly two phrases in Japanese (hello and thank you) so throughout my visit I had to figure out how to communicate effectively.  It got me thinking about how many of the business leaders we in finance interact with on a regular basis regarding budgets, projections, and analyses. Do they feel excluded when we talk in purely financial terms?  We perceive these concepts as obvious, but then again we speak the language of finance.  For us, the concepts and jargon are second nature.  But it raises the question, “Do we speak the same language as our budget owners?”

You may take it for granted that experienced managers should just know how to construct a budget or forecast for their department.  In many cases, they can but perhaps they have only learned one way to complete the task. They may not really understand what this process means to the broader business.  For example, I had a free day in Tokyo and learned how to get around the city using the Yamanote Line.  It is a circular route through much of the city. I felt that I could get from point A to point B without getting lost. Indeed, I can literally say that I know how to get “around” Tokyo.  However, it was unlikely that the

Strolling the bustling streets of Tok

Yamanote line was the most efficient way to get to my varied destinations.  Were there other lines that would have gotten me there faster?  Where did all of the other subway lines go and did I miss other interesting sites?  The truth is I had something that worked.  It was a repeatable route/task that got me where I needed to go.  Developing a repeatable task with predicable results when we don’t fully understand what is going on is a common way to deal with ambiguity and uncertainty.  You should consider the likelihood that your budget owners are doing the same thing to get through the budget process.  Perhaps they have steps that have worked before and they are just following them without realizing there is a better way.

If you want a more effective process that can be better understood by budget owners, here are some steps you can take:

Hold informational sessions – Invest the time to inform your business leaders on the key points of your financial plans and how everything interacts.  A great way to do this is by holding informal lunch sessions and “office hours”.  These sessions will help your business leaders develop a better understanding of the impact of their department on the  company’s overall financial success.

Keep your KPIs clear and concise – Create a model that focuses on key metrics and is easy to follow by non-finance staff.  A good rule of thumb is that 6-8 key metrics are the most your organization should ever have.

Speak their language too – Spend the time to understand the language of operations, HR, marketing, sales, and other departments.  You need to understand the challenges, metrics and focal points that are cloaked in their own particular jargon.  This mutual understanding improves overall communication and relationship-building.  During this trip, it helped me immensely when the person I was interacting with understood English, even if their ability was somewhat limited.

Provide Visualizations – Large sets of numbers can be intimidating to people outside of finance.  Be sure to include dashboards with easy-to-read charts and other visualizations. As they say, a picture is worth a thousand words, particularly when others aren’t quite fluent in your particular language.

While these steps can go a long way towards improving business communication and comprehension, they should be part of a broader initiative related to leadership development in the office of the CFO.   After all, great leaders are usually great communicators and storytellers.  Carlson Management Consulting takes a holistic approach to transforming finance through the combination of best practices in process, technology, human capital optimization, and thought leadership.  Contact us today to discuss how we can help take your organization to the next level of success.

Have you had an interesting experience with communication while traveling?  If so, please share in the comment section below.

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