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Reading between the lines (understanding Financial Intelligence)

By | David Klaasen | Helping You Create Clarity, Inspire Your People & Drive Performance | Retain your best people | Changing Management Mindsets and Behaviour | Practical Behaviour Analytics

Underperformance can no longer be tolerated and lack of financial awareness is no longer a valid excuse. Managers who say “I need more resources” without a valid business case backed by solid numbers and demonstrating a return on investment, are getting blunt and unsympathetic responses from Directors. Managers without the ability to state a strong and valid business case will flounder.

We now need to be able to justify the salaries of our teams as well as our own. In the boom years many managers got by with ineffective techniques and poor communication because sales were good and the money rolled in. Now there is persistent pressure on margins and many are feeling the steely eyes of the Directors scrutinising everything and everyone’s impact on the bottom line.

Volatility, Uncertainty, Complexity and Ambiguity (VUCA) world we now live in means that there is certainly a lot of uncertainty ahead. This is creating a prolonged requirement to re-evaluate every aspect of the business and managers play a critical role in supporting it.

Many Directors complain about managers not communicating or even recognising the need for increased efficiency. The very nature of a more stringent approach and a more robust analysis of performance and managerial effectiveness is making a lot of people very uncomfortable, and management skills are under the spotlight. Managers are now required to take an entrepreneurial approach. This means looking at their department or division like a business that they own. However it is exposing a massive gap in financial awareness and intelligence.

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