Having a financial consultant pore over your company books can cause anxiety and friction. Staff get nervous when a consultant is reviewing their work. They may worry mistakes will be found, making them look bad or incompetent.
Yet the reason for hiring an outside consultant is not to make anyone look bad but to uncover issues holding the company back and work with finance staff to improve its financial acumen. Recognition of where the skill and experience gaps are in an organization is one of the most important responsibilities of good management. Another is finding the best means to fill those gaps. A financial consultant may be the best solution to fill a skill or experience gap.
Among the problems a consultant faces:
– In many companies, the executive team doesn’t believe finance is at the heart of operations, so they see no need to hire an outside advisor.
– In some cases, owners worry the consultant will end up doing all the staff’s work.
– If an owner does hire a consultant, financial managers sometimes think it’s a sign they’re not adequate.
Staff suspicions show up in two ways, according to a study in the Journal of Financial Service Professionals. First, employees follow the path of least resistance and comply apathetically with the consultant’s suggestions. Or, second, they can outright resist the changes, say academics John Davenport and Jamie Early.
Winning Trust – the key to success
With the right approach, employees become engaged emotionally and intellectually with the consultant, the academics write. To make a successful partnership, the CFO and finance director need to want the consultant there.
Ideally, they start to see the consultant as an ally, even a mentor. Good consultants win the trust of employees by making it plain they are only assisting, not replacing them. With this approach, staff will feel a growing sense of excitement as they realize they are being given tools to help spur company growth.
Some CFOs already realize their weaknesses and want to expand their knowledge. In one instance, the CFO of a rapidly expanding $25 million company wanted to take their business public and encouraged the owner to invest in him so he could quickly get up to speed.
Adding value, the consultant’s calling card
A trusted advisor can put a company’s accounts in order by establishing shorter reporting times. Staff members learn to close their books on time and are left with a clearer financial picture. They begin to match expenses with revenues from month to month, and the finance director can take advantage of timelier financial information to plan ahead. Finally, a good consultant creates analytical tools that offer a comprehensive cost-benefit analysis of proposed projects.
With a good consultant as their coach, finance staff can perform to their maximum potential and create the kind of processes that map the company’s best way forward.