Finance leadership NEEDS to be collaborative, with Siqi Chen

We want to talk more about, I guess, the evolution of finance.

Sure.

From being sort of thought of as something that, I guess, just maybe it's just about kind of crunching numbers to being something that actually kind of drives innovation.

Yeah.

And development within an organization. Can you speak a little bit more about that? What do you, you know, what do you think? How do you see it developing? What have you seen happening over the recent years? What's been your perspective on this?

Boy, can I? It's all I want to talk about. I mean, it's actually a wonderful change, right? So I think over, really over the past, let's say 50 years, half a century or so, finance as a function has gone from this sort of backwards looking, it's about more about accounting and accuracy and numbers, to increasingly more of a forward-looking, strategic, cross-functioning cross-functional role. And I think there's a bunch of different causes behind these changes. I think one of the biggest ones is obviously technology, right? I think the invention of things like VisiCalc and the very first spreadsheets in the '70s, it made it possible for us to now think through and create these models and think through new scenarios with these models in ways that just wasn't possible before, right? You had to manually update all these calculations on these like grids of paper Right? And so that's certainly like one of the first big pieces. And what's happened since is particularly in the late '80s, early '90s, is you have the ERP revolution, right? Data became more plentiful within organizations. And as organizations became more cross-functional and faster moving than ever, the combination of data and and cross-functional work and understanding and ability to model and better tools all converged to make finance a far more strategic part of the business ever before. And we're seeing now with AI, with the AI tools that we can increase the leverage of finance so they can focus even more on the strategic work has certainly— is starting to make an impact. And the output of all of this is that you were seeing, for example, data teams reporting directly to finance. Right? Right. So finance has become less about just closing the books and making sure the budgets are on time to like actually making the, supporting, and in most, in many cases, making some of the most strategic decisions in the company. And I think that's a sea change in how people see the function, the career paths of people in the function. Accountants are now expected to be analysts, analysts want to be in finance, finance want, people in finance want to be CFOs, and CFOs are increasingly being CEOs. So it's just a remarkable set of changes we've seen over the past few decades, driven by very major factors, both technological and in terms of the landscape of competition.

Yeah. So the ability to more easily, I guess, interpret and analyze large sets of data has really resulted in this change as well then?

Definitely. Yeah. I mean, it's the availability of it. Also the real-time nature of it. You know, you don't have to like wait. Like, things are being instrumented in real time and you can now react much quicker, right? You don't have to wait to analyze the data anymore either. And so all of these things has made data-driven finance, data-driven decision-making so much more impactful in companies in ways that didn't used to be possible. So the importance of having an accurate model, the importance of having everyone else in the company also understand how the business works and how the different pieces fit together to drive the bottom line has never been more important. And you can draw a direct line from that change in progress to the availability of better and better tools and technology for finance.

Great. I love hearing that. So, we're talking about, I guess, in a way, the ideal world, this should be the kind of role of finance. But I imagine sometimes it doesn't quite work out that way. So, if you're talking best-case scenario, Like, kind of how is a good kind of, you know, finance team that feels like they're valued and they feel like there's good collaboration between them and the rest of the organization, how are they supporting the organization in terms of, in practical terms, in terms of what they're doing in their day-to-day?

Yeah. One of the things I think about with finance is finance isn't just not about just finance, right? It's about everything that happens in a company eventually falls down to the bottom line somewhere. And so the idea of finance as a business partner to all of the different key stakeholders in a company, from the CEO down to the department leads, is how I think finance can be more strategic. And there is, I think there is a, there's a wall right now, and there's a tension between finance and other departments. Right. That I think is enabled is it's created by, frankly, a lack of good tooling. Because the fight, you know, people have this outside of finance, have the stereotype of finance people being sort of insular and not wanting to like share their crayons and share their work. But you actually meet finance people, it's the complete opposite.

Right.

Okay. Right. Like, finance people want people to understand finance. Mm-hmm. Mm-hmm. Right? They want the rest of the business to understand where the business is and where the business is going. What are the key levers? And the frustration for finance is that the rest of the business, uh, too often, most of the time, do, do not have a good grasp of where the numbers are. Do not have a good grasp of where the levers are. And they have a better grasp and understanding of the numbers and the levers than anyone else in the company. Mm-hmm.

Right. I see.

And From the outside looking into finance, what it feels like is finance is this cabal of you know number monks who just like are like sort of like counting the beans, and you have these like indecipherable wall of numbers that you get sent that you're supposed to fill out, and it's like what is this even for? But at the same time, when you run a good department, a unit of the business, you need to make good better decisions. You want to be able to say, "Hey, here is like where the most important." Levers to pull, and here's how we can optimize where we invest for the next 12 to 24 months. And so there is a desire to connect, but for many reasons, the reality of a relationship isn't there. And I think that can and will rapidly change. It has been for quite a while.