So you are an IT guy probably because you didn’t want to be an accountant, right? Let those guys do the numbers!
One of the biggest lessons I learned at my previous employer is that if you want to advance, you have to demonstrate a working knowledge of finance. Essentially, you have to be able to talk to the folks who control the money and do it in THEIR language, and it may mean that you have to put more of your personal bonus pay at risk to get what you want. It’s the equivalent of diverting profits (personal bonus) from business operations back into the business to invest in a bigger long-term return (promotions, future bonuses, accelerators for the bonus term).
If you forgot everything you learned in Accounting 101, go check out the Warren Buffet and the Interpretation of Financial Statements book for a perspective from one of the world’s infamous investors. Keep in mind, he’s looking at this from an investment perspective, but you can learn from it and use it in your job.
CFO’s deploy capital to get returns. They don’t care if you need the New and Improved Widget or not to do your job. In some respects it’s both one of the hardest and one of the simplest jobs in a company. Hardest to prioritize, but simplest because it’s all just numbers and math—stuff has to balance!
Let’s take a scenario. Say you have an opportunity to deliver a new feature or product or customer engagement that will make a big difference to the long term profitability (or revenue generation) of your team, business unit, or company, but in order to deliver this you need resources. Let’s say that you need four additional (incremental) employees (headcount or FTEs) to accomplish this. Simply asking for headcount usually doesn’t work because it carries significant risk to cash flows (among other things). If you are managing a P&L, you may have to agree to take additional (incremental) revenue targets in order to balance your department’s net (rev-cost) impact to the business. If you are not managing a P&L, you may need to go to whomever does to work this through or convince others who have room in their P&L to invest into your team through a cross charge (or however your company manages moving funds from one bucket to another).
I’m not a finance guy. Finance people may cringe at the way I am describing some of this stuff, but the point is that in order to get what you need, you have to use a finance guy’s language. Show the CFO the pathway to revenue and take on some personal risk and things may happen much faster.
Up next, applying this to your job!