financial management

The goal of a 360-degree assessment is to identify blind spots and vulnerabilities in your professional skillset. By getting feedback from your colleagues and comparing their perspectives to your self-assessment, you can get a deeper understanding of your work performance. 

There are generally 3 outcomes from a 360-degree assessment: 1) somebody has underestimated their abilities, 2) somebody has overestimated their abilities, or 3) somebody is self-aware about their abilities. There are ten other articles addressing the two other possible outcomes of a 360-Degree Assessment available here:

Self-Aware - People Management, Innovation, Leadership Ability, Communication Skills, and Financial Management

Overestimating -  People Management, Innovation, Leadership Ability, Communication Skills, and Financial Management

Understanding Underestimating your Abilities for 360-Degree Assessments

When somebody has underestimated their abilities, they are essentially giving themselves a lower score for whatever category is being measured compared to their colleagues’ score of them. At first glance, this may seem like a positive thing: “If my colleagues believe that I’m better than my self-assessed performance, then I must be doing pretty well!” This is partially true, but this article will shed light and provide examples of how underestimating your abilities can be an opportunity for improvement.

When my team and I at Ambition In Motion facilitate mentorship programs, we also include our 360-Degree Assessment (and its report) to each participant. We’ve found that our members use these insights to reveal the areas most in need of improvement. This has helped members identify the best course for professional growth and helps provide a major launching pad for helping them open up and be vulnerable in their mentor relationships.

The 5 core areas we measure in our 360-degree assessment are People Management, Innovation, Leadership Ability, Communication Skills, and Financial Management.

This article is one in a series of articles focused on why underestimating one's score on a 360-degree assessment report based on the 5 core areas listed in the paragraph above is not necessarily advantageous for one’s career.

Financial Management

Financial management is a skill that is often overlooked but can have a large impact on the company. Financial management is based on one’s ability to manage the resources they oversee (including their time and the way they are spending their time at work), a company budget, and others’ perception of a person being fiscally responsible.

If you gave yourself a lower score than your colleagues did on your financial management, that could indicate that your team is unaware of the way you are spending resources or that you don’t trust yourself as much as your team trusts you with financial management.

Your team is unaware of the way you are spending resources

If you are in charge of a budget and the only thing your team sees is whether or not you are able to pay for things (e.g. their pay stubs and other amenities around work), it can be easy to understand why your team would think that you are managing the funds optimally. When teams are left in the dark, all they can formulate is their perception of what is going. If you put on a good face and they consistently get their check, they may feel like there is nothing to worry about. If you feel like you have made some poor financial choices, your team could be completely unaware of these choices (or their effects). If you aren’t directly in charge of a budget, you could be wasting time or resources at work. If everyone sees you at work and it seems like you are working hard, most people won’t question whether you are putting in an optimum effort. If you know that you could be more efficient or productive at work and others don’t know, that could be a reason for a gap between self-perception and colleague perception.

You don’t trust yourself as much as your team trusts you with finances

In school, many people get stuck in the rut of being “naturally just bad at math”, and they let this label hinder their ability to grow their math skills. In the professional world, a similar issue can arise with Financial Management skills. Many people have been conditioned to believe that they just aren’t great at managing finances because of things that have happened in their own or their family’s past.

Here are a few solutions to help close the gap in one’s financial management. Ask your colleagues why they believe you are so strong in financial management. Try to find out what specific tasks you do and actions you take that give them that impression. Share your expenses with your team and try to find out whether you could be better at managing them. Be sure to listen to their feedback and incorporate useful ideas into your own methods. And if you manage your team’s budget, create incentives that encourage cost-consciousness. If you don’t manage your team’s budget, ask the person who does which parts of your work are the most prone to waste and ask for feedback on how you can be more efficient.

Counter-argument

The eternal counter-argument to this is “I just set the bar really high and I feel like I am not where I would like to be in this area.” If that is the case, then you are not effectively communicating your standards to those you work with. If your colleagues don’t know your standards, then they can’t properly assess your abilities in relation to those standards.  

Overall, the goal of a 360-degree assessment and report is to identify the gaps and blindspots one may have so then they can improve their performance. The goal is to be self-aware, thus enabling you to work towards excellence in each area. Underestimating your performance might feel good at first because it shows others think highly of you, but continually failing to meet your own expectations means that you risk burning out or losing engagement. So, try being honest with yourself and setting honest goals. Professional growth is a slow process that takes dedication, consistency, and honesty, but by following the path, we are all capable of becoming our best selves.

A 360-degree assessment is a unique survey that uses input from self-assessment and from colleagues’ assessments to understand a professional’s strengths, weaknesses, and blind spots. By gathering feedback from your colleagues alongside your own perspective on those same questions, we can get a deeper look at how your self-perception compares to the way your colleagues see you. 

With this data, we can break down the results of a 360-Degree Assessment into three outcomes: 

1) Somebody has underestimated their abilities (self-rating lower than colleagues’ ratings), 

2) Somebody has overestimated their abilities (self-rating higher than colleagues’), 
 or
 3) Somebody is self-aware about their abilities (self-rating matches colleagues’).

This article is going to address some possible problems and solutions that might arise for people who are self-aware of their abilities. This article is part of a series I’m writing about Ambition In Motion’s 360-Degree Assessments and how their results should be interpreted. There are ten other articles addressing the two other possible outcomes of a 360-Degree Assessment available here:

Underestimating - People Management, Innovation, Leadership Ability, Communication Skills, and Financial Management

Overestimating - People Management, Innovation, Leadership Ability, Communication Skills, and Financial Management 

When somebody is self-aware about their abilities, this means that they gave themselves a similar score as the score their colleagues provided on the same skill. 

Initially, self-awareness may seem to be a cut-and-dry positive outcome but looking a bit deeper reveals some potential issues. After all, the goal of a 360-degree assessment is to identify blind spots and close the gaps between one’s self-perception and the perception of their colleagues. However, we find that there are opportunities for growth within a self-aware 360-degree assessment report and this article will review those opportunities.

At Ambition In Motion, our 360-Degree Assessment has 5 core components: 

a.                People Management, 

b.                Innovation, 

c.                Leadership Ability, 

d.                Communication Skills, and 

e.                Financial Management.

While self-awareness is likely the best outcome relative to the other two possibilities, I’m next going to explain how you can leverage self-awareness to grow as a professional and identify blind spots in your professional perspective. I’m going to show why self-awareness on your 360-Degree Assessment is more than just a pat on the back, even if you and your colleagues share similar views on your performance. 

Financial management is a skill that is often overlooked but can have a large impact on the company. Financial management is based on one’s ability to manage the resources they oversee (including their time and the way they are spending their time at work), a company budget, and others’ perception of a person being fiscally responsible. 

If your colleagues' assessment of your financial management abilities is aligned with your own, that can be a very good thing or an opportunity for growth – depending on whether or not the score was high or low.

If you rated yourself low in your ability to manage finances and your colleagues agree with you, this can be a major opportunity for growth. 

Before diving into the implications behind why this is an opportunity for growth, it is probably wise to assess, internally, the reasons for your low self-rating and why your colleagues would also rate you low.

In terms of yourself, why would you rate yourself low on your ability to manage your finances? Are you taking (or have taken) actions that are financially detrimental to the company? If so, did you learn and alter your actions from the circumstance? Or do you think that you simply could be doing more or doing better overall?  

One of the largest expenses for a company is human capital. Some managers will rate themselves low in financial management because they are unwilling to have difficult conversations with colleagues about productivity, and those colleagues don’t realize the implications that their actions may have on the financial viability of the company.

This is the type of outcome many tech startups find themselves in. Essentially, they will raise money with the anticipation that by the time the money runs out, they will have garnered enough traction to justify a follow-on round of investment or have enough revenue to cover expenses. The area that most startup founders struggle with is managing the finances. More often than not, they believe they have a strong idea that requires strong employees (with high salaries) to implement the idea. The ultimate balance is between quality talent (and the funds used to pay them) compared to what they produce and the relative difference in outcomes between a top-paid team and a lower-paid group of professionals. Analyzing which aspects of the business require top caliber salaries is crucial because the drop off between the top-caliber and a solid hire but with less pay can be extensive in terms of the effect on the company’s bottom line. 

If you don’t manage a team, you might think to yourself “I don’t manage a budget therefore my ability to manage finances doesn’t really matter.”

I am going to make the argument that this notion is not correct at all.

If you are paid a salary (or hourly) for the time you put in at work, you manage finances – that being the time you spend working and how effective you are in the time you do spend at work. In some cases there are egregious misuses of time like taking actions detrimental to the business like working on non-work tasks while on the clock, spreading rumors or negative gossip about other employees, and clocking in late or early. 

There is also the contemplation of whether you are optimally using your work time. For example, if you know your brain is optimally effective in the morning, you should be considering that with your daily schedule. If you choose to pursue social tasks or tasks that don’t require deep thinking in the morning, you could be squandering your brain’s daily threshold of deep mental focus. If you have open office hours or are expected to have your emails checked and responded to within an hour, you are diminishing your ability to complete any task that requires focus because you are constantly having to check your email.

Think of your salary as a budget your company allocates to you to be optimally effective at work. Are there components to this budget that are misused or could time be reallocated in a way that is leveraged more effectively? That is a question you will have to answer for yourself, but once you get to a point where you feel like you are optimally leveraging your time at work, you can start to see improvements in your ability to manage the most important budget your company entrusts you with, your salary/time.

The biggest counterpoint I hear about why not be optimally effective with your work time is “everyone else clocks out early or takes breaks more frequently than advised. There doesn’t seem to be a financial incentive to perform any more optimally, so why should I work on optimizing this?”

The answer is that how others work should not affect how you work. Back to the analogy of considering your salary like a budget your company entrusts you with. If somebody mismanages their budget, does that justify that you should mismanage your own? 

Of course not! But this is a trap that people fall into all the time.

If you gave yourself a low score for your financial management abilities and your colleagues agree with you, that is a sign that you can improve yourself.

The best way to improve your abilities in this area is to research methods for best managing your time and creating a schedule for yourself that allows you to get the optimum amount of work done in a day given your unique set of responsibilities. This is not a one-size-fits-all solution as everyone has different work tasks. If your role requires you to frequently check emails, perhaps creating a space in time once or twice a day set aside for checking your emails. You could even create a “vacation” response informing senders when you will be checking your emails next so they can anticipate a response. Of course, this would need to account for specific time-sensitive requests if necessary. 

If you are willing to take action to start improving your efficiency at work (and encouraging your team as well, if necessary) you can start to measure whether what you tried worked or didn’t work. The best way to achieve improvement is to try things you haven’t tried before.

If you rated yourself relatively high on your financial management abilities and your colleagues agreed with you, that is excellent. That is a positive sign that you are properly managing the time you are paid for both in terms of your salary and (if applicable) the budgets you have responsibility over. 

However, this is not necessarily something to get caught up in because there could be factors contributing to your colleagues' (potentially generous) rating or a lack of self-awareness causing you to rate yourself high. This may not be the case, but it is important to point out examples of these types of situations so you can assess whether they hold any weight.

For those who manage a budget, oftentimes their team will rate their financial management abilities high because as long as they receive their paycheck every two weeks, nothing else really matters. Many teams are completely unaware of which activities are the most expensive to the business. Most employees don’t understand the relative dollars they generate from their work and the specifics of why paying their specific salary is a financially responsible decision. 

Let’s use a pizza restaurant as an example. Say there are 3 people working inside the pizza place each making $10/hour and an additional manager making $20/hour. On top of that, the cost of running the ovens and the electricity comes out to roughly $5 per hour. If each pizza costs $10 and the company on average sells 10 pizzas every hour, they are driving an average net profit of $45 per hour. If the employees of the pizza place understand this, they can work on ways to try and sell more pizzas in the same hour to improve their own performance and the performance of the company – making them more valuable to the company.

Some leaders might read this story and start playing the “what if” game (e.g. what if my employee's demand raises because they understand the financial impact of their work?), coming up with every bad possible outcome if their employees knew their financial value to the company. But these old thought patterns should be reconsidered with new research.

In research from companies that leverage Open Book Management, companies in which the employees have a greater understanding of the financial implications of the company’s decisions perform better and are more profitable than companies who don’t. Conversations around raises and relative improvements to the business become substantially more tangible and objective when there is hard data justifying and showing how one person’s improved efficiency deserves greater compensation, especially compared to the “everyone gets a raise just because!” method of giving raises.

If you are an individual contributor for your company and you don’t manage a budget, per se, you still manage your time. If you consider your salary as a budget your company has entrusted you to manage, are you optimally using that budget?

One way to make improvements in this area is to identify potential opportunities for you to become more efficient at work. You could ask your boss or co-workers for feedback on ways you can be more efficient at work. And you could also provide some (ideally research or evidence-backed) suggestions for ways you have identified to help make yourself more efficient at work. Your manager will likely appreciate your drive for improvement and the fact that you came prepared with research-backed suggestions on ways you could improve your own efficiency and work output.

Overall, having a self-aware response on your 360-degree assessment report isn’t a free pass to give in to stagnation. It simply shows that you and your colleagues are on the same page. But, it doesn’t mean that there isn’t room for improvement. The implications from having a self-aware score are not wholly positive or wholly negative. Instead, it is a snapshot of your current performance which can help you make informed decisions about where you need improvement. As long as you possess an open-mindedness about making improvements and are willing to measure whether the new changes worked, you can ensure that you are on a positive track towards continual growth and improvement.

A 360-degree assessment helps you understand your professional performance by having both you and your colleagues assess your abilities across several key skills. 

The goal of a 360-degree assessment is to identify blind spots and vulnerabilities in your professional skillset. By getting feedback from your colleagues and comparing their perspectives to your self-assessment, you can get a deeper understanding of your work performance.  

There are generally 3 outcomes from a 360-degree assessment: 1) somebody has underestimated their abilities, 2) somebody has overestimated their abilities, or 3) somebody is self-aware about their abilities. 

This article is going to address some possible problems and solutions that might arise for people who have overestimated their abilities. This article is part of a series I’m writing about Ambition In Motion’s 360-Degree Assessments and how their results should be interpreted. There are ten other articles addressing the two other possible outcomes of a 360-Degree Assessment available here:

Underestimating - People Management, Innovation, Leadership Ability, Communication Skills, and Financial Management

Self-Aware- People Management, Innovation, Leadership Ability, Communication Skills, and Financial Management 

When somebody has overestimated their abilities, they are essentially giving themselves a greater score for whatever category is being measured compared to their colleagues’ scores of them.

At first glance, this can sting because you are essentially learning that your perception of yourself is greater than your colleagues' perception of you which may cause one to think “I must not be as good as I think I am” or “My colleagues must not realize all of the things I do to be strong in this area.”

For most people, the answer is somewhere in the middle. 

When my team and I at Ambition In Motion facilitate mentorship programs, we also include a 360-Degree Assessment and report to each participant. We do this for two reasons: 1) these reports can help reveal opportunities for growth in one’s professional skill set, and 2) deep self-reflection is a major launching pad for fostering vulnerability in a mentor relationship. These two components are crucial to developing strong, valuable mentor relationships. 

The 5 core areas we measure in our 360-Degree Assessment are: People Management, Innovation, Leadership Ability, Communication Skills, and Financial Management.

Next, I’ll explain the significance of each of these categories, and then suggest ways that someone can learn after finding out they are overestimating their abilities in each category. This should be an opportunity for growth and understanding, not a time to be defensive and stubborn.

Financial management is a skill that is often overlooked but can have a large impact on the company. Financial management is based on one’s ability to manage the resources they oversee (including their time and the way they are spending their time at work), a company budget, and others’ perception of a person being fiscally responsible.

If you have overestimated your financial management abilities, you have either given yourself a moderate score and your colleagues rated you low or you gave yourself and high score and your colleagues rated you moderately or low.

If you rated yourself moderately in terms of your financial management, there are a few possible explanations. Perhaps you aren’t in charge of a budget, or maybe you don’t think that managing finances is that critical to your role. 

If your colleagues rated you low for financial management then that is a sign that there is an opportunity for growth for your abilities.

This is also typically a sign that others believe you could be more effective or efficient with your work. Even if you aren’t in charge of a formal budget, you are responsible for your time and how effective you are with the time you spend at work. 

By giving yourself a moderate score, you might think that you are doing enough to get by and do the “normal” amount of work compared to your colleagues. But if your colleagues rated you low, they clearly do not see it that way.

Your colleagues' low score indicates that you are either spending either company dollars or company time on things that aren’t helpful to the business. We aren’t robots; everyone does this to some degree, but once your colleagues start to notice, that’s a strong sign that you need to do better.

Dr. Robert Cialdini has a concept called “what is focal is causal” meaning that what people see is what they perceive and internalize as important or significant. If people are giving you a low score on your financial management ability, they perceive you as lazy, or looking for ways to get out of work, or as someone who spends money recklessly; no matter which way they perceive it, they end up realizing that you shouldn’t be trusted with a budget.

Before getting your results on a 360-Degree Assessment, you may think others aren’t noticing, or that others in the company are way more wasteful than you. However, clearly in the perception of your colleagues, that is not the case and you have been put on notice.

If you rated yourself high on your financial management abilities but your colleagues gave you a low or moderate score, it indicates that you aren’t as strong of a financial manager (in the perspective of your team) as you think you are.

This typically stems from a lack of communication. If you manage a budget and your team sees you spending money on things that seem lavish and unnecessary (from their perspective), this can cause them to feel like you aren’t managing your company’s finances appropriately. This feeling is magnified if they feel underpaid while seeing this. If you don’t manage a budget and your team gave you a low or moderate financial management score, it means that they don’t believe that you spend your time at work effectively or that you are overpaid for your work. If salaries aren’t public information, people make assumptions for income based on your lifestyle, and if your lifestyle appears to be better than others, especially if they see you doing the same or less work than them, they will notice.

If people at your work are staying late and getting in early, and meanwhile they see you working the base 9 to 5, then that may cause them to become frustrated. They might think that either you are lazy, or that you are expecting more from them than is fair. What they may not realize is that your work responsibilities might be deeply analytical and have a compounding impact on the business, or they might not see the parts of your job that take place outside the office. For example, some work directly correlates time with output – essentially the company can get a certain number of tasks done by an employee for every hour they are at work; this is called linear productivity. On the other hand, there is work that, with intentional deep thinking, has an exponential impact on output in shorter bursts, but with increasingly marginal returns over a long period of time; this is called exponential productivity. Not every job has the same types of tasks and productivity needs; but without your open communication with your team, you can end up looking like a slacker. 

The point is that until the truth is communicated to those you work with, they will form assumptions to fill in the gaps as to why things are happening the way that they are. Unfortunately, many of these assumptions are negative.

The best thing you can do to improve your financial management abilities, both for you and for how your team perceives you, is to communicate and learn. New innovations are constantly happening to make our work more efficient and effective. If we are open to learning about these tools and resources, we can ensure we are up to date on what needs to be done to be most effective at work – both for managing a budget and managing our time at work. Communicating effectively to those we work with allows them to know how we are spending our budget and our time. The more we can loop our team in on budget decisions and decisions about how to best spend our time, the more aware they will be as to what we are doing and how that is impacting the business. The best-run companies did not end up that way by accident; they intentionally fostered a company culture of honesty, hard work, and accountability from the top down and that pays dividends when everyone is brought into the fold.

In essence, overestimating your abilities in these categories does not mean that you will forever be this way, but it does mean that there are opportunities for growth that you must tap into if you would like to improve. 

Executive Coaches are qualified professionals who work with individuals- primarily executives but also high-performing employees- to help them improve in many ways.  They often work with these leaders on goal setting, goal achievement, communication, and act as a sounding board for ideas. 

Normally, this can cost quite a pretty penny- up to $3,000 an hour. However, Ambition In Motion has created a new program facilitating executive coaches and mentorship which only costs $150 a month. But how does this happen? What makes AIM Insights so different?

Executive coaches often have extremely high business acumen. Whatever some of your goals may be, they can help you accomplish them. An impartial third party can often help judge your ideas as well. Because they will keep your information confidential as well, they can really create a relationship built upon helping you and improving your business and ease your fears about corporate espionage or similar topics. 

Another benefit of having an executive coach is that they often have extensive experience to draw upon. Every coach has led a team, founded a business, sold a business, or done something in their respective industry to warrant being hired solely for an advisory position.  

               Executive coaches can also point out weaknesses far easier than someone connected to your company. It is always easier to find an error if you are objective towards what you are auditing, which does hold true for executive coaches. 

               Think of an executive coach similar to how you would think of an athletic coach. No one would argue that Lionel Messi is one of the greatest players to have ever played soccer, or that Tom Brady is one of the greatest football players ever. However, despite both their respective skills, both of them have made use of coaches and improved their already formidable skills. The same concept holds true for you as a manager. Regardless of performance, everyone should have a mentor and educator in their back pocket. 

               The key question here is how a cost is determined for Executive Coaches. After all, with a steep cost, you’d be curious. Typically, these coaches spend hours upon hours in what is known as the discovery process. This involves reading over 1:1s, checking exit interviews, reading performance reviews, looking at goals and successes, and so much more. Naturally, with hourly pay, this will add up, hence the high costs. 

               However, with AIM Insights, the platform automates this entire discovery process for the executive coaches, condensing it into easy-to-read graphics and briefs. This saves them quite a few hours and allows them to not only be able to work with their clients faster, but also to reduce their costs. 

               In addition to this, executive coaches tend to be great at their craft, executive coaching, but if assessing the total amount of time they are working, for example, the time it takes to develop business (online or in-person), there is a lot of total time spent in the process of serving a client. Ambition In Motion can once again automate this process. By creating a marketplace where coaches and managers can come together, coaches can spend their time coaching and developing business by showcasing their abilities as a coach. 

               One of the most important things that can be written about AIM Insights is that it can be completely tailored to your specific scenario. Picture the following: Your water heater burst overnight, and you and your family wake up to six inches of water in your living room. Who would you call to fix this?

               In this case, you are probably most likely to call a plumber. And why might you call a plumber as opposed to a general contractor or a handyman? The answer is obvious- the plumber specializes in this type of scenario.

               Executive coaching works in the exact same way. One executive coach cannot be good at all aspects of leadership. With AIM Insights’ pool of executive coaches, the tool can provide leaders with a coach who will be more experienced with their specific field and problems. 

               For example, AIM Insights has coaches that specialize in coaching sales leaders, others that specialize in coaching tech leaders, others that specialize in certain personality assessments like DISC, Strengthsfinder, Predictive Index, and Culture Index, and many other areas. The point is that multiple coaches can be assigned to a company based on their needs and drivers. Essentially, it is a marketplace where managers and executive coaches can come together.

               AIM Insights executive coaching can also be paired with a full people leader certification program, in contrast to others. Certifications are often much cheaper than postgraduate education, and can also provide unique benefits that are more tailored to your actual career.

               Executive Coaching can be nerve-wracking and can be expensive. But you don’t have to let it be either of the two. 

Gallup has extensively researched the relationship between employee engagement and company profitability, and they showed that engaged employees are 22% more profitable than disengaged employees. 

The tides of the economy seem to be shifting, making this a time when it is even more critical to focus on culture and employee engagement. Many companies, especially private equity-backed firms, have responded by laying off employees rather than investing in them. I was curious to know, “Why are private equity-backed firms more prone to layoffs in a down economy compared to private or public companies?”

I reached out to my network to learn more. I interviewed multiple employees, leaders, and professionals working for private equity, and their consistent answer was that “They are seeking an exit – at any and all costs and that part of achieving an exit is showing numbers that your costs are down and revenues are up.”

Ryan, a former VP of Operations, was recently laid off from a private equity-backed firm. He proposed some ways for the company to consolidate its overlapping expenses. They loved the idea so much that after consolidating those expenses they consolidated him…and replaced him with a junior middle manager to take his role at a fraction of his salary. 

Don’t get me wrong, I am all for eradicating inefficiencies and driving profitability. 

But can the short-term focus of achieving an exit coexist with a thriving company’s long-term goals, especially when these goals require an engaged employee base with a great culture?

I would imagine that most private equity professionals land somewhere on this scale from unapologetic to compassionate. The unapologetic professionals don’t care about the people because revenue growth reigns supreme. On the opposite side, compassionate professionals care about building a sustainable business and invest accordingly. In between these two sides, many professionals will say all the right things but their actions will reveal whether their true focus is sales and reducing costs to show short-term metrics.

Another focus of my interviews was on the reputational cost. I was curious to know if there was any reputational risk for offloading a company that looks great on paper but is a dumpster fire internally. I'm envisioning a prospective investor checking something like a Carfax to find out if they are working with somebody that has a history of leaving others to hold the bag.

Unfortunately, I haven’t received any great responses so far. 

And until we have a way for companies to assess the reputational risk of how private equity firms treat their acquired companies' employees, there is nothing to stop these private equity firms from propagating bad cultures to dump onto somebody else’s plate.

The issue with all these scenarios is harm done to the people at these companies. Hundreds of thousands of professionals work for private equity-backed firms, not realizing how little security they have in their role or the value they have in the minds of the owners. 

Or worse, many professionals end up working for a company and feeling trapped because of economic worries or personal constraints. These workers end up miserable, and the whiplash effects from ownership changes only exacerbate these effects. Imagine starting with an executive team that cares about you (e.g. the founders), and suddenly you find out that the new private equity owners want 120% more revenue but for 30% less pay. These paradigm changes wipe away years of work building company culture and leave a hollowed-out company in their wake.

Research has shown how powerful investing in culture and engagement can be for profitability. But until we have a way to hold private equity firms accountable based on their reputation for either building great companies, inside and on paper, or mirage companies, great on paper but awful inside, it will be difficult for private equity and company culture goals to align.

It is not easy for most of us to ask for help or money. Often, the leading blocker holding leaders back is some sort of fear. Unknown fears can keep us from even taking a step into the uncomfortable to objectively seek to understand the problem our team is facing, which means our teams will continue to operate at sub-optimal levels.

It is good to first take a step back and become self-aware of what might be holding us back from understanding some concerning trends on the team. It’s hard to think clearly about a problem if blinded by subconscious fear. Get curious about what is coming up for you by asking yourself some of the following questions:

In doing this, you are becoming comfortable with the uncomfortable. You can start to outline some next steps to understand how to face your fears and ask the right questions that lead to discovery, solution identification and action.

Leaders often get stuck here. In our previous blog, we discussed how to build a business case. During this process, it is important to identify who has the authority to approve the budget for the business case, and who the project will impact. When mapping this out, you will often find leaders who are both impacted and need to approve. Once you have identified who these are, reach out to them and include them into the process of building your business case. Before your discussion meetings, be sure to plan in advance, so you can tailor your conversation to the audience.

For each key individual you plan to speak with, create an outline of who they are in preparation of your meeting.  You can do this by answering the following questions: 

In answering these questions in advance, you now may see common themes that build into your open questions and speaking points for the agenda of the meeting. You may see some commonalities amongst the key individuals and decide a group meeting might be better. However, if someone is typically negative to change and is the main budget approver. You may want to have a pre-meeting with them, in which you just ask open questions to obtain better answers to the above questions. You may want to ask questions that guide them to self awareness around the problem, and get their insight and feedback into the solutioning in order to obtain buy in. 

As you step through these conversations, you want to be respectful, and transparent. You don’t want individuals to feel like you are going around them. The goal is to create a shared common objective and collaboratively build a business case that already has your approvers buy in. 

As you move to build the business case, you should naturally get a sense for the budget appetite of the individuals. In your conversations with them, you should have a sense for the following: 

Be sure to ease into the budget conversations, at this point they should have a sense of the shared common pain and gap, and that without this solution no one will be successful in meeting their targets. 

If you have made it to this point, you have been working with your key approvers to obtain feedback and buy in into the creation of your business case. You know the budget range, and the approval chain. If you sense hesitancy, remain curious and ask open ended questions to understand what remaining questions may be keeping you from a Yes. It may be as simple as the group is risk adverse, and wants to try out the solution with a pilot group first. Adjust your business case, accordingly, and then work to finalize. This iterative approach will help your case be stronger, ensure you didn’t miss any blindspots, show your ability to influence cross-functionally and bring people together to create a win/win outcome.

All successful managers have some form of personality trait or talent that predisposes them for leadership. Some of them may have attained this skillset through years of education and training, while others may have been naturally gifted with this, but at the end of the day, one factor holds true. These talents can be categorized into a Goleman Style. 

            Daniel Goleman is an American author, psychologist, and journalist, best known for writing a book in 1995 called Emotional Intelligence.  Some of the topics in this book aren’t necessarily ones that pertain to managers, but they can still get value out of reading it. However, the main point of interest from this work is that of the descriptions of Leadership styles, more commonly known as the Goleman Styles. 

            Each Goleman Style has both good values and bad values associated with them, and Dr. Goleman has recommended that the most effective leaders make use of all six of these styles. The styles are as follows:

1.     Commanding Leadership

2.     Visionary Leadership

3.     Democratic Leadership

4.     Coaching Leadership

5.     Affiliative Leadership

6.     Pacesetting Leadership

Each of the Goleman Styles has been studied by psychologists and business leaders to determine their flaws and benefits. For more information about the stories, I recommend reading the book Emotional Intelligence. While some of the concepts in this book may not hold true today as a result of further research, the leadership styles are still known to be true. 

1)     Commanding Leadership can also be known as Authoritarianism or Directive Leadership and is most often viewed as a negative method of leadership. In this style, the leader is responsible for making all the business process decisions. Leaders must exert tight control over their workplace and workforce and have a very clear goal in mind with what to work with. This is especially effective within workforces where employees are low-skilled or inexperienced, as well as in situations in which a leader might be called upon to make quick decisions. Commanding Leadership can also ruin direct-report engagement, since no one other than a leader will generally have any input on decision-making. Therefore, it is often passed up on in favor of different styles. 

2)     Visionary Leadership is largely dependent on a leader having a final goal in mind. This leader can then go on to inspire their direct reports and harness their participation and goal setting to accomplish this goal. Examples of these leaders include Mahatma Gandhi and Nelson Mandela. While this form of leadership can completely allow for a corporate overhaul, it has a major flaw in terms of short-term problems. An example of this can be seen in Gandhi’s journey to free India from British Imperialism. While he was able to accomplish his goal in 1947, his marches were often divisive, prioritizing men over women, and Hindus over Muslims, along with upholding the Caste System, which are all problems that plague India to this day.

3)     Democratic Leadership completely enables all members of a team to participate in the decision-making progress. Any member can come in with an idea and can determine whether or not the idea is worth going forth with by using a consensus amongst other members, along with a final ruling by a leader. Democratic Leadership is particularly useful at getting team member involvement and retaining staff, but has a flaw in its speed, often taking time to come up with decisions. This can be dangerous when quick decisions are required to be made. 

4)     Coaching Leadership is all about Service Leadership. In this rarer form of leadership, a leader’s primary responsibility and first priority is to coach team members to develop and improve over time. This can dramatically assist in retention and engagement and creates a more skilled workforce. However, coaching can often prove to be very difficult, and does not provide an immediate result. This form of leadership is highly synergistic with AIM Insights and the AIM Insights People Leader Certification.

5)     Affiliative Leadership solely targets the feelings of direct reports. The main goal of this is to make everyone “feel good.” This is especially useful in situations where a pool of individuals are in disagreement. HR professionals are often highly adept at Affiliative Leadership and patching relationships between people. This relies on having a strong moral compass and a strong desire to avoid tension. One fatal flaw with this form of leadership is that these leaders are often avoidant of conflict and have trouble making difficult decisions that may cause someone to suffer. In business, there are sometimes difficult conversations that are well-needed, such as talking to underperforming employees. Affiliative Leaders may not necessarily be the best at addressing this.

6)     Pacesetting Leaders are similar to Commanding Leaders in which they are both the primary driver of the workforce. The concept of the Pacesetting Leader is similar to that of a Pacesetter in a marathon. These individuals serve as an example and the epitome of the statement “do as I do.” Pacesetting leaders are often highly motivated, are good at clearly communicating tasks, and are talented at setting trends. These leaders have expectations of their subordinates and know exactly how much work they can do without failure. This style of leadership can also stress direct reports and does not allow for much feedback or engagement. Therefore, it has another similarity with Commanding Leadership in that it is poorly regarded by direct reports.

Understanding what situation to exercise each type of leadership is a benchmark of a talented leader. While Commanding and Pacesetting Leaderships aren’t to be used at all times, they have certain benefits in certain scenarios. The individual fallings and strengths in each style can allow for a balanced leadership style, and overall make a better leadership experience as well. Goleman Styles aren’t a panacea by any means, but they can come together to truly make a leader. 

Financial Managers often oversee other workers within their company’s finance departments, while also assigned several tasks of their own. These managers are often responsible for the creation or delegation of some of the following tasks, according to the U.S Bureau of Labor Statistics.

·       Preparing Financial Statements, business activities, and forecasts

·       Monitoring financial details 

·       Supervising Employees in Financial Reporting and budgeting

·       Reviewing Financial Trends

·       Analyzing market trends

Most importantly, financial managers are often responsible for advising senior leadership in terms of decision-making for business processes. Most of their decisions are data-driven and require strong analytical skills. However, since many of their ideas come from aggregate functions and data, they are strongly dependent on making sure that they have their intermediate functions and data given to them. This work is often passed down to direct reports, despite its high importance, and often serves as a method of determining whether an employee is deserving of a promotion. 

In addition to this, a manager cannot truly start or submit their work until this intermediate work is completed and handed it. With the necessity of this work, financial managers often utilize software platforms known as Human Resource Information Systems, or HRIS for short to track productivity and task competition rates. Most of these systems also make attempts to track feedback but are often lacking in this regard. This is where Ambition In Motion can come into play in a very effective way.

Ambition in Motion provides a product and service known as AIM Insights. This service is a platform that integrates with the already present HRIS systems and is meant to improve worker communication, engagement, and retention. AIM Insights can be of use to most financial managers by addressing several problems that they face within their everyday careers.

AIM Insights can track when a goal is completed. This can enable these financial managers to have the highest possible efficiency when working on goals by being able to put aside certain tasks with confidence that they will be notified when things they are dependent on are completed. No need to check with a direct report every few hours to see if something has been completed yet! AIM Insights can automate this process and eliminate the tedious step of rechecking repeatedly.

AIM Insights provides a highly developed executive coaching program, with renowned experts available to consult about business decisions. Using the data that the managers themselves have provided, these experts can advise on what they would do differently, and how the manager could improve. For example, say a manager has one direct report that is highly skilled at cleaning strings of data, with another direct report highly skilled at accounting. In the pressure of a looming deadline, a manager might assign work that isn’t necessarily suited for each direct report. The expert might be able to see things differently, due to their objective and educated background, and consequently, create a more comfortable working environment for the direct reports. Since AIM Insights is also a third party, these mentors are not privy to workplace dynamics or personal problems, and as such, can provide a more clear and more unbiased opinion when it comes to making business decisions.

AIM Insights can also be a source of feedback for a manager. Many times, managers wish that they had more honest and direct feedback, but since their direct reports are worried about consequences, they may not be as open with their feedback. AIM Insights provides a rating system and requests feedback from direct reports as they submit their work, thereby eliminating a human interaction requirement from this feedback submission process. A quote from Kari Ardalan, a Vice President of Scaled Success at Zendesk explains just how effective this feedback submission is:

 “At first I was a little nervous getting started (using AIM Insights) because I didn't know how my team would receive the survey. But after using the tool, I am learning so much more about my team that I didn't know from our previous 1:1 conversations and it is helping me connect with my team on a deeper level”

Improving the quality of feedback submissions can allow a manager to make more educated and informed decisions, while also allowing them to get to know their direct reports much better. Increased engagement has been shown to occur when interpersonal relationships are stronger in the workplace. Workers realizing that their boss pays attention to them, and their responses can give them a sense of acknowledgement and recognition that will then improve their engagement rates.

This feedback can also allow a manager to realize what jobs their employees prefer or what work they struggle with. This can allow a manager to make their business processes more efficient, as well as open a potential education avenue for their direct reports.

Overall, financial managers face multiple challenges, but interpersonal relationships and interdependency problems can be easily avoided. Contact Garrett Mintz for a free demonstration of AIM Insights and see how well this can work for your business.