By Belinda Coniglio, current student of the University of Sydney Business School MBA program
I will be honest – I failed microeconomics in my first year of university and swiftly transferred from a Bachelor of Arts/Economics to straight Arts. Even though I survived trust accounting as a lawyer, I was dreading Financial Management and from my MBA interview, flagged this subject would be a struggle.
Not all MBA students are from a financial background – yet finance is essential to business success. From day one, Professor Guy Ford assured the class that the course was not about rote learning mathematical formulas or tedious Excel calculations. While skeptical, I was captivated when learning that we would be assessing the performance and value of John Singleton’s communications firm STW. Marketing and communications, two of my many passions, made finance sound sassy and gave me a fresh mindset.
Guy has a wealth of finance and education experience, and a quirky teaching style, using humour and story-telling based on real life case studies to engage students. Using practical anecdotes and analogies (my favourite was determining if a marriage or partnership would result in increased personal value), Guy taught us that understanding financial statements is about having perspective. And of course, that ‘cash is king’ and ‘debt is the plug!’
Perspective in financial management means understanding the factors – including cash flow, assets, equity, liability and risk – driving a company’s performance. In an era of disruption (which resulted in the transformation of the marketing industry and the need for communications companies like STW to invest in digital) it is perilous to look only to previous figures to predict market trends. With the pace that markets and traditional business models are changing, real time data is fast becoming a firm’s number one asset, driving the need to integrate finance across business areas, particularly marketing.
The shrewd CEO may be able to outsource number crunching, but will not survive a failure to understand financial concepts and drivers or extract accurate information from the finance team. For MBA students, the aspiring leaders and CEOs of corporate Australia, finance is more than reading balance sheets and profit and loss statements. Prudent financial management is as much about leadership as balancing the books. The commercially astute leader garners reliable data and understands the impact on business to make informed decisions that drive company growth.
How does your organisation assess value and achieve financial growth?
Are there synergies between leadership and financial management in your organisation?