Stepping outside the finance function

Stepping outside the finance function

When new people join the finance team at waste management company Bagnall and Morris they can forget any thoughts of spending a sedentary first week in the company of a calculator and spreadsheet. Instead they can expect to experience life on the front line, going out with the lorries and learning the business from the ground up.

According to chief executive Peter Cooke it’s a policy aimed at ensuring that everyone working for the company has a thorough grasp of the operational side of the company’s activities. And as former FD himself Cooke believes that this principle is as relevant to the company’s finance staff as it is to anyone else on the payroll. “It’s crucial. You can’t understand the numbers unless you know what the business looks like.

With a turnover of £22 million, Bagnall and Morris is a relatively small company, but the received wisdom that finance staff can benefit from experiencing operational life outside of the finance function has a wider resonance.

John Rogers, chief financial officer of Sainsbury's, trained as a missile engineer and worked as a consultant before joining the supermarket group where he took on two different senior finance roles in succession. Before becoming CFO, however, he spent time managing the company’s property division. Today, Rogers maintains that his broad range of experience was critical preparation for the CFO role.

Rogers says: “I think it has been good have had an eclectic experience and to have exposure to other parts of the business."

But where exactly do the benefits lie? As Rogers observes, some companies tend to keep staff in silos with senior people seldom moving between functions. Others such as Sainsbury’s see it as advantageous that managers and directors should work across the business.

“We see broad experience as essential,” Rogers adds. “For instance, I’ve worked in property and [CEO] Justin King has worked in retail and HR.”

But is cross-function experience a nice to-have or a must-have nowadays? In other words, does a well-rounded CV make you a better finance chief?

Cast your net wider

According to Neil Owen, director at recruiters Robert Half, there is growing demand for aspiring CFOs to equip themselves with experience that extends beyond a pure finance role. It’s a trend that reflects the changing perception of what the finance function itself should be doing.

“The finance team have become enablers of growth,” Owen says. “They are contributing to decisions on where and how to grow as well as supporting various commercial aspects of the business. Our clients are increasingly looking for management accountants who are skilled in business partnering and working with different areas of the organisation.”

Mark Freebairn, head of the financial management practice at executive recruiters Odgers Berndtson agrees. As he sees it, the widening role of the chief financial officer has resulted in the influence of the finance team spreading throughout the organisation.

Freebairn says: “As the CEO’s job becomes more complex and demanding, what we’re seeing is that finance is taking on some of the responsibilities of the chief executive. So we’re seeing finance taking on responsibility for areas such as IT, HR and property.”

Arguably it’s not essential for the CFO or other members of the finance team to have direct experience of these departments in order to take overall responsibility for them, but according to Jamie Lyon, head of employer services at ACCA, it can certainly help.

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Tags finance management operations skills

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