Drained by constant bickering at management meetings?

Drained by constant bickering at management meetings?

Facts are sacred – but comment is free. Hence the smörgåsbord of opinions that bounce back and forth around a meeting room from various departments with their own vested interests.

It’s only natural

Such disagreements are quite natural, with various contributors having various motives and thus different views:

Sales people prefer having large marketing budgets, push hard to minimize unit sale price, ask for lots of stock to be available, and fight for easier payment terms for customers, all in the hopes of higher revenues and thus higher performance bonuses.

Production managers want a large stock of high quality materials and the most advanced production lines, so they can produce high quality goods.

Financial people focus on having the necessary cash available at a specific time to finance all reasonable requests, while maintaining a healthy balance sheet.

Shareholders want the value of their holdings to appreciate over time.

Top managers (shareholders hope) therefore focus mainly on the company’s growth and its sustainable future cash flows generating capability.

Substitution of impressions by facts

Secondly, disagreements emanate from what I call the ‘substitution of facts by impressions’. On many occasions, people from different parts of company, meeting over important business issues, have the tendency to slip from rational factual and consequential assessments of a situation, to presenting emotional and unsupported statements, intuitions, ideas or flights of fancy to somehow defend their standpoints.

The answer

01 Be very specific about your meeting objectives.

02 Discuss only generally-available facts.

03 All attendees must be prepared for the meeting.

04 Listen carefully – and hang up your ego with your jacket.

05 Meeting is about discussion. It is not a one person show.

06 Keep the meeting short.

The threat of spreadsheets

The threat of spreadsheets

Developed as a single user application, spreadsheets were never intended to address critical business processes. And yet the spreadsheet is the most widely used strategic management decision tool today.

A spreadsheet can be changed extensively by different people, often at the very last minute, but is still used for critical business decisions. They are used for profitability analysis, strategic planning, budgeting, forecasting, transaction structuring, valuation etc.

What is wrong with this? Well, a generally accepted estimation is that 88% of spreadsheets have errors. A wrong keystroke, a formula replaced with a static value, ad hoc copy-paste routine, a future detached from the past to list just a few issues rendering the calculations and decision basis, if not meaningless, then often highly questionable.

Businesses today require concurrent team work, a collaborative approach – something that allows the teams to work simultaneously, give full traceability of data, develop changes, smooth algorithms, calculation integrity, and versatility and robustness so that data calculations evolve with growing management demands.

Ask yourself, next time you see a spreadsheet, do you understand the impact a likely error in it could have on your decision? And if you felt a bit uneasy, maybe, it is time to move forward and embrace professional financial modelling tools, designed specifically to assist businesses with their complex business processes that can import data and provide a modelling environment that gives management good quality information for making decisions.

Download MYGIDE Financial Modelling free at https://mygide.com/pricing