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Host: Jess Dewell
Guest: Steve Rosvold
What forward looking thinking is.
The elephant in the room: are projections really guesses?
Shake the stigma of perfection.
Create a box for risk tolerance.
Our company’s stagnation or growth is reflected by what our customers are grappling with.
Relationships provide indicators for us to anticipate how we can best serve customers.
What our role in growth is.
Personal perceptions about financial information that impact our ability to best use business financials.
Audience Question: Are there some specific actions, best practices, on how to get to that point in business where clients do not only share their plans but also their most embarrassing, painful moments?
Facts, analysis, collaboration to anticipate change and opportunity using facts, analysis and collaboration.
Books we love and learn from after the first read.
Overlooked internal behaviors that when we do them – consistently – we prepare our company to adapt faster.
Live Audience Question: Is part of finance’s role to change the company’s culture? If so, how?
Live Audience Question: How can we be sure that we set the right exceptions for our [department] goals?
What makes it BOLD to use past data to project growth possibilities?
Jess Dewell 2:38
With that innovation of technology and changing an iteration that’s happening so fast, by the time a company actually acquires, implements and sets it up, and then gets that buy in, it’s almost like the technology is now almost obsolete.
Steve Rosvold 3:21
We used to be accountants preparing information that just gave people a financial statement to look at. There’s so much more going on in our industry today, where we’re growing and creating value
Steve Rosvold 3:36
Financial people are coming to the table with more skills than just technical skills. And that’s really exciting for the industry. And I think it’s really exciting for business too.
Jess Dewell 3:56
It’s not just preparing of data that has been collected. This forward looking thinking and having a solid platform with which to jump from. And sometimes when we jump, we don’t know if we’re going to fly or if we’re going to land back on the ground and if there’s even going to be ground underneath our feet.
Steve Rosvold 4:30
The solid foundation we’re talking about, building trust in your financial statements, also gives you the credibility and the confidence to move forward in your strategy.
Steve Rosvold 4:56
Failure in business might be bankruptcy or something else. It certainly isn’t a particular project or or other change being implemented. You want to use, not necessarily trial on error, but what I call educated guesses. So forecasts allow us to do that.
Steve Rosvold 5:20
There’s all kinds of digital transformation taking place where data is available so much quicker and so much more is available. Our real job now is to be able to take all that data and create information out of it that we can act on. And as our educated guesses become better and better – pretty soon our forecasts are a lot closer than just a simple guess.
Jess Dewell 5:52
I heard in their practice, practice, get better practice, practice, practice, get better. Approach mastery.
Steve Rosvold 6:00
I think we have to be willing to fail. But we have to fail quickly. Learning from those failures is one of our jobs.
Steve Rosvold 6:16
We have to shake that stigma of being perfect, because perfect makes you move too slow. We have to be able to be really good and move very fast.
Steve Rosvold 6:43
The idea of the audit that has to be perfect, the idea of the entries that can never have a mistake, in some ways this slows our ability to move forward ..
Steve Rosvold 6:55
Understanding the impact and the risk management behind a mistake, and making sure you’re not making big ones, but making sure you’re making lots of advances, and lots of trial and error, and moving the business forward. That’s a real change I think finance people are embracing. How to move forward in a world where in the past, we’ve had to be perfect, or it wasn’t good enough. So that’s a challenge we working to overcome.
Jess Dewell 7:37
There is a whole section and I don’t know if it’s mainstream or not, but it’s the one I go to, where how do you teach your kids to think through letting them fail on purpose. So you’re setting up a situation that you know is going to have hardships that they will work through, yet they’re still going to be safe.
Jess Dewell 8:00
We don’t want to have big mistakes. But we want to have mistakes, because it’s how we learn.
Steve Rosvold 8:47
It’s a real balancing act between too many controls, and too few controls. Too much risk, and too little risk.
Steve Rosvold 9:31
If you feel that you don’t have any space to fail, you’re going to have a pretty restrictive contribution to your company because you’re going to be scared to fail.
Jess Dewell 10:20
It’ll help us avoid business plateaus is this concept of: If we know what our customers are grappling with, we can be prepared to help them, and maybe help ourselves in the process
Steve Rosvold 11:21
What to do when there’s a downturn in the economy? You Google that and you’re going to get a million different answers, and a million different ideas. The focus is so often on an internal focus. So companies are looking at cutting costs. Cutting products. They’re looking internally at what to do, and we said that is the wrong approach. The right approach is to understand our customers enough to be able to help them. And that means we need to predict when they’re going through a downturn.
Steve Rosvold 11:50
The only reason why our business falters is because our customer’s businesses falter. Anyone else can be going through a recession and if our customers are robust and still need our product, it doesn’t affect us. So, we looked at our real role in this way don’t cut our ability to serve our customers. It’s really, know our customers well enough to make their fall easier.
Steve Rosvold 12:29
How do you prevent your customer from falling? That’s when they need you the most — when they’re having the most trouble. See, we’re the most valuable to our customers when they’re in the most trouble.
Jess Dewell 13:37
One way to support our own growth is to know what’s happening in our customers businesses. And the only way we can know that is when we talk to him about it, because we’ve developed some sort of a relationship that we can ask, “Hey, what you’re working on? how are you going to grow? Where do you see your biggest challenges this year?
Steve Rosvold 14:00
Building trust with your customers. And the way you do that is to bring service to them. Bring them value.
Steve Rosvold 14:23
If your customer is comfortable sharing their business plan with you, you are a long way to creating a tremendous trust relationship with them, and you can help them before they get into trouble.
Steve Rosvold 20:16
This whole idea of “fail quickly,”, the more finite you can get in creating the tools around answering the question, why did we not make our revenue targets this month, or this year, this quarter? and deep dive. So the financials are the indicator. What finance people and the operations and business people are working on now is coming together and saying, why didn’t that work? How do we adjust it? The biggest place where you can take that next step is really sincerely understanding what happened.
Jess Dewell 26:33
Where did we come from? where are we at? And those two points in time, tell us where we’re going. And the cool thing about this is that the more we know, the more we practice, the more we’re listening, looking and talking about different aspects of our business, incorporating the financial side, we can decide do we like where we’re going, and if we’re not, let’s close the gap and shift our direction so we can.
Steve Rosvold 27:49
Financial people, they need to learn the language of the business. So the first thing, their responsibility is to understand how that industry, how that business talks . And we need to be able to convert accounting and finance information into their language.
Steve Rosvold 30:23
In a lot of small businesses, or medium sized businesses, owners fear sharing information. But I would say to them, one of the best decisions they can make is to get a very strong financial person they can trust to help them with their decision making … I’ve seen companies launched because the owners, when they took that burden and put it on someone else where they could do their creative, whether it was sales or product development, what they really did well, their business exploded. I’ve seen that time and time again.
Steve Rosvold 32:38
I’ll share my book with you. It’s the “Design of Business” by Roger Martin. And what I love about this book, it’s all about innovation. And it’s all about how to innovate. So it talks about going from the mysterious to the heuristic, to the algorithmic. This book is just one of those tools where we can get innovative and grow, it’s a good guide on how to fit innovative into businesses. A fun book to read.
Jess Dewell 34:08
Innovation is not just product or service, or new product or new industry, or any of that stuff. We can innovate in every single role in each of the departments within our organization, the functional arms that are impacting our overall growth.
Steve Rosvold 34:35
We think of innovation mostly as an R&D product development, but frankly, every part of business has innovation techniques.
Steve Rosvold 35:02
Fun thing about innovation, is you don’t have to be a scientist or inventor. I don’t need to be Albert Einstein.t. You can learn the techniques of innovation, and you can apply those to your businesses.
Steve Rosvold 45:55
What makes a bold company? Somebody who closes very quickly. … The bold piece making decisions on what we’re doing next month, next quarter next year, and focus on the future. That where it gets exciting, where we get to focus on the future and adjust what we do based on great information we are creating forecast for next month. Next month we going to get better because we made better decision this month. We’re going to fix things. So that’s where it gets really exciting and bold I think, when companies get to that point,
confidence, strategy, problem solving, innovation, forecast, anticipate, business growth, growth
Right now – we can overlay specific skills and thinking to look ahead and align business priorities to achieving growth goals.
How do we use our financials to look forward and make better guesses about our company’s ability to achieve growth goals? Purposeful action to grow requires a modern skill set of financial literacy and strategic thinking. Jess Dewell discusses the necessity of forward-looking financials with guest Steve Rosvold, CEO of KRM Solutions and Founder of CFO.University.
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