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Fueling the Finances – Overview of Finance Lens (Series of 9, Part III)

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AnonymousBy Josh Schow 5 years ago
Home  /  9Lenses News  /  Fueling the Finances – Overview of Finance Lens (Series of 9, Part III)
Fueling the Finances:Overview of Finance Lens (Series of 9:Part III)

In my experience, financial information tends to elicit 1 of 3 responses:fear, boredom, or wild-eyed enthusiasm. Still, no matter the response, each would agree that you can’t have a great company without sound finances. If people lens represents a company’s lifeblood, then finance lens is the fuel that feeds the fire.

If you’re like most  analytics/metrics junkies, then you’ll feel right at home in finance lens. Businesses frequently have well-trained, experienced people dedicated to understanding the numbers and how they can help the business. However, finance tools often fall prey to the law of instruments. Businesses can get lost in the balance sheet or sophisticated algorithms and neglect the broader considerations necessary to understanding the finance lens.

The solution to every financial problem is not to “just make more money” or “improve cash flow.” Notice that the finance lens considers not only the raw numbers, but also the structure of finances along with historical performance. Quite often historical analysis provides crucial insights into the overall financial health of the organization. By examining the past, a business can understand its future. Nevertheless, such historical analysis is unhelpful if the financial structure is ill-designed. That is where understanding the financial model of a business is vital to ensuring financial success. Sound financial models not only produce consistent results, but also ensure the business has a robust method for ensuring its longevity.

Understanding the finance lens through social discovery helps illuminate gaps in knowledge and training. There could be widespread ignorance of the financial model. Perhaps everyone’s misaligned over the capital structure. Regardless of the particular gaps, social discovery drives these types of insights. Such insight helps build better understanding, so we can build better businesses.

If these concepts pique your interest, then consider reading Edwin Miller’s book, 9Lenses Insight To Action.

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