A Sales Director is used to work with referred to Finance people as "the department of red tape".
I didn't take it personally, as he had reached this point of view well before I started working with him. But it did impress upon me something that you don't want to be when applying the policies and procedures, and corporate governance that being the finance resource for a business might typically entail.
To me, it is dead easy - and low risk - to just say no to any activity that might lie beyond the confines and security of your normal business practice. What is a lot more difficult is to consider the proposition without preconceptions as to whether the suggestion has merit, and to address all the risks that a departure from your normal process may entail.
That doesn't mean abandoning policy and process - it means enabling exceptions to some rules where certain criteria are met, such as "with prior approval by the CFO".
When Rob Kent, one of our GMs came to me and said that we had an opportunity to sign up to a JV with a State Government which he said would be highly profitable and low risk, I felt that I had to give him a chance to explain. Rob ran a good, profitable business unit and he had earned my trust sufficient to give him a chance to at least explain what he had in mind. I could see that he was really enthusiastic about the opportunity and it would be madness not to hear him out.
The opportunity was well outside of our normal business model and set of deliverables, but when I put together the business case with him over coming days, it was clear that there was a really good piece of business to be done. As a JV with a Government body, it was basically a monopoly and provided an ongoing service to the public.
I polished up the business case and spoke with Rob to the client about our proposal sufficient to confirm our understanding of the proposition. Then I took it to the Network. I had to get sign-off from Regional, then Global management, and then it circled back to the local captive Shared Service Centre - who reviewed it for local accounting and tax implications. These folks really WERE the department of red tape, and they took weeks to get their heads around it. Their initial response was to say no, because there is no risk in saying no and just continuing to do the same business we had always done, even though there was a business case in front of them that showed that we could do over $80 - 100m of business with a net profit of 35% over the coming 8 years (4 + 2 +2) term.
Long story short - eventually I did manage to convince them to sign it off, and it went on to be the most profitable piece of work that the business had ever done in this geography. The Network later replicated the contract in New Zealand with one of our sister agencies. It took a degree of professional courage for a number of us to do something well outside of our business model, but in the end, it made over $30m for the business.
And it was borne out of a twinkle in one mans' eye, and a CFO prepared to go out on a limb with him.
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