How do you improve the financial success of your company, organization, unit, network, project or in fact any setting in which you work in a key role? One might assume that this question would be the center topic in all business disciplines. Surprisingly this question is both the center topic but at the same time this vital issue seems to evade a closer examination.
This
extraordinary situation may partly relate to the way how business disciplines
have developed and how the cover they different angles of organizational
operations. Strategy discipline talks about strategies and there the financial
success is certainly important but perhaps it is an aspect, which more assumed
than explicitly and meticulously explored.
There – in the realm of strategy
doctrine -the thinking must be that wise strategy and useful strategic
frameworks lead also to financial success but closer and detailed examination of
economic ramifications may not be part of discipline’s focus.
In the same vein
also other business disciplines focus on their key topic let it be marketing,
leadership, entrepreneurship or any other business disciple and the financial
success is certainly there on the background but it may be more an assumed
result than a carefully examined part of the scrutiny.
In this
state of affairs we could assume that there should be a discipline which looks
the financial success and in particular the role of an executive straight in
the eye. Surprisingly we may not find such a disciple. Certainly there is a discipline
which comes close and which gives valuable tools for an executive who wishes to
increase financial success of her/his unit. This discipline is first and foremost
accounting and all its variants: financial accounting, cost accounting,
management accounting, strategic accounting etc. Indubitably accounting discipline
offers most valuable tools, perspectives and frameworks for executives.
At the same
time accounting and its variants are seen to be rather number and calculations
focused, people and organizations have remained on the background. Accounting
discipline has tried to counter this deficiency by developing accounting in
action type of examination. This route leads us rather close to examine ways
how executives could improve the financial success of their organizations.
However there is a constant need to understand better how executives with all
their actions and even with their non-actions could help their organizations to
improve their financial success.
In our EMBA program we have developed a course Business Risk
and Financial Management. In that course we examine financial
matters from the perspective of an executive. We examine broadly and widely how
executives could act in different ways to foster financial success. Here the
role of the executive can vary from the innovative thinker who raises up new
ideas and recognizes new business opportunities to a demanding person who
really takes care that plans are executed effectively and without unnecessary
waste of any resources. The point in this course is to probe the role of an
executive in financial matters as widely and deeply as possible.
Well, before
this program starts we send – in the spirit of this course - some open questions
to participants. One of those questions is following: what is financially
(economically) wisest thing (widely thing, process, action, etc) what you have
seen? In the beginning of the program this question was discussed and I
collected top 5 answers. Here these answers are my interpretation of the
discussion and I may have combined some answers.
5 Wisest financial (economic) phenomena
- Wise use of latest technology,
including AI and robotics. This as a way to shift the organizational action to
levels where higher economic surplus can be achieved.
- Well-being. Clear understanding how
people are the greatest asset in an organization and how investments in
well-being create financial success.
- Timing, timing and timing. A
capability to notice and capture opportunities on the market place. Also a
capability to change executive’s own organization when the time is right.
- Cost control. We must not forget the
value of good old budgets and active budget control. Budgeting is the way to
carefully plan the future and notice quickly if something unexpected happens.
Note unambiguously the value of forward looking planning and control system.
- Clear understanding in which position people are on their best. Also more generally a wise ways to use and develop the existing resources.
ari.manninen(at)jyu.fi
Director, JYU Avance Executive Education
emba.jyu.fi
linkedin.com/in/arimanninen
twitter.com/arimanninen
