On 17 June, our Network of ambitious owner-manager came together to explore and find answers to their questions concerning what it really means to be ‘strategic’ in finance.
Prior to the Network session, we discussed this topic at length with Network participants, with academics and practitioners working in the field of finance, and with each other. From these conversations emerged a series of questions that fell broadly into two themes:
1. Strategic financial management
A key priority that emerged for business owners was the need to approach finance from a strategic perspective. The following questions typified those that emerged, as we discussed this theme:
- what are the drivers that are shaping the financial decisions we make?
- what do we really mean when we say we need to be strategic with finance?
- what role are we/should we be playing in finance?
- what does the business need for its next phase of growth?
- how will we raise growth capital? what approach will we take?
2. Performance management & measurement
The more conversations we had, the more we recognised that being ‘strategic’ in finance involved making the right choices at the right times. Much of our research proves that the majority of business owners manage their businesses by looking in the rear view mirror; largely basing their decisions on historical, lagging financial measures of performance. From our experiences, being ‘strategic’ in finance involved developing a confidence in addressing the following questions:
- how has the way organisational performance is measured evolved, and how can we benefit from this knowledge?
- how can we move beyond a financial dashboard, towards more leading indicators of performance?
- what really drives behaviour and performance in our organisations?
Not included in the above were a range of questions around the management of finances (e.g. cash flow, getting the most form your accountant, and so on); a theme that felt more ‘operational’ than ‘strategic’ at the time, so was put to one side for now.
What emerged from the above explorations were three sessions, each distinct, yet related, exploring the area of strategic finance:
- Are you investment ready? Dr Zita Stone, our resident expert in SME finance, challenged participants about how they were currently conceptualising their need for finance, along with the approach they were taking to secure finance.
- How do we make (financially) strategic decisions? Hamish Clifton, a visiting fellow in Entrepreneurship, provided a personal perspective on the approach he has taken, and the learnings he has had, in marrying strategy and finance in the organisations he has run.
- What really drives performance? Dr Vinh Sum Chau, our resident expert in performance management, helped participants to understand how performance management has evolved and how this thinking can apply practically to SMEs, helping them to forecast future growth and promote the right behaviours.
We will aim to explore each one of these through a subsequent blog, so stay tuned!
About us
The BIG Network provides a space for ambitious owner-managers to explore, challenge and resolve issues that are central to the sustainable success of their organisations. The Network is led by its members and is prefaced on openness and honesty, mutual respect and confidentiality.
For further information contact Dr Simon Raby on 01227 824740 or S.O.Raby@kent.ac.uk