Hell is not a finance meeting, some of the more technically inclined may suspect it is but they are missing out on an invaluable opportunity to assist their co-workers. As a technologist even if you have no experience with business finance your objective in any meeting where financial numbers are presented to you is to ask insightful questions.
The least financially inclined technologist should pay attention to the trinity of metrics; growth, customer sentiment and employee engagement. You will hear these numbers mentioned in isolation frequently, but they should be examined together as they represent the past, the present and the future of your business. How a product you are working on has grown, if customers are enthusiastic about it and if employees are happy to be working with one another shows you the health of your organisation.
If one of those three is under performing, or has swung to negative numbers, a focused management intervention is required. If two of the three are under performing/negative a replacement of some of the current management is required. If all three are under performing/negative a transformational leader will be required to replace the current management, replace much of the mid-level management and refocus the business on what it can do best.
Every organisational transformation, where a battered and demoralised company is rescued just before it plunges into the abyss, is a story of the warning lights of the trinity being ignored. "Good employees do not want to work here, customers did not like the products we offered, and growth evaporated." Properly measured growth, customer sentiment and employee engagement do not lie about your company’s prospects even if a bad management team does.
While the trinity will tell you if your company is on the road to greatness or the road to ruin, other financial numbers can be abstract. Inside of organisations how financial numbers are derived tends to be cloaked in secrecy. This is because finance is as much of an art as a science and if you saw the process by which the numbers are assembled you may have questions, if not objections.
A financial presentation to a meeting you are in is your chance to ask questions and, if required, to object. For someone without ongoing exposure to business finance discussions the key concept is that the value in financial numbers is only in their comparison. What is the difference between two data points of the same financial metric taken over time? Is something increasing or decreasing as time passes? What does that mean? Is it expected to continue as is, decelerate or accelerate? Why?
Observation will inform you as to what numbers more experienced attendees care about and regardless of how dense a set of financial numbers might look to you only a handful of key numbers will matter. Ask questions about these numbers and do not fear them as you cannot break them.
Looking at results you want to compare what was projected against what happened last month or last quarter. Results are in the past, you can only learn from why they are different. Discussing projections or budgetary requests involves checking assumptions about the future. Does what you know about the past or what you suspect about the future align with what the presenter is telling you? Dig into the differences.
During budgetary requests people tend to ask for money they want and not what they require. Take it upon yourself to find out what is required through questioning the requestor because each budgetary request is more of a negotiation than a statement of fact. What you are looking at should be treated as an opening offer and the information you are gathering through questioning is information to make a counter offer.
When it comes to making people offers, headcount of salaried employees is also a metric worth examining whenever the opportunity arises. Who is getting what budget to hire new employees and are those new employees being placed in growth areas? You can spot managerial empire builders when new headcount starts appearing in places that are not connected to the growth areas of the business.
The most rudimentary understanding of the financial position of your company, or your division or your product organisation will help you made better decisions about your career. That is the self interest part but when it comes to working with your team remember:
Finance is as much about people as it is about numbers, when you examine both you can help your co-workers make competent financial decisions which can benefit you all.