Saying “And” Instead of “No” When Planning with Scott Geller

E#17: Scott Geller performs a planning session, discussing “Saying “And” Instead of “No” When Planning.”

Join me, host Scott Geller, on the Budget Your Business podcast to listen. 

Scott keeps the microphone in today’s episode walking through a different budgeting approach to saying “No” all the time. Finance is often the "No" group or pitted against other departments, especially during this time of year when many companies are rolling through or into budget season. Either / Or leads to a downward spiral and results in the worst of both worlds. Using "And / Both" creates synergistic thinking, allowing people to brainstorm about the combined problem. Scott walks through examples and a process to approach with an “And / Both” mindset. The "And / Both" process creates discomfort, which is good, until the point where the business feels comfort in discomfort. The goal is finding the "Both / And" solution. If you come to a fork in the road, take it.

Podcast Recommendation: The Storytelling Podcast by Rain Bennett 

Find out more about Scott Geller:
https://www.linkedin.com/in/scott-geller-cfo/
www.PathPredict.net
www.CapitisAdvisors.com

Transcript

Scott 0:00

Hello and welcome to Budget Your Business, the podcast for small business owners who want to learn how to financially plan for every aspect of your business. I'm your host, Scott Geller. Typically, we host a guest. We allow them to tell us about themselves and then dig deeper into their superpower to educate us on budgeting or planning for a specific aspect of a small business. Today, well, you get me, your host, Scott Geller. So I'm going to share a little bit about myself in case you missed it in other episodes. I spent about 25 years in one form or another of in one form of finance or another, with the first 12 years at some of the largest organizations in the world, before being extremely lucky to be part of a spin-off from Allianz. That change, that spin-off, pointed my career ship on the correct course. After 10 years working in that spin-off and shutting it down eventually, and after 10 years, I started Capitist Advisors. I started it to stay in that small business lake to help small businesses navigate their own ship as a fractional CFO. Recently, I also started another business, a new business called Path Predict. PathPredict is it's an accumulation of learnings and interests that have grown over the last five years. And I'll explain more about Path Predict in this in the six-step method to provide strategic finance for staff and firms later at the end of the show. But today I want to talk about the planning predicament that it doesn't matter what size you are, uh what industry you're in, but it's the planning predicament predicament of saying and instead of saying no, when you have multiple demands that require funds within your business. I know, I realize finance is often the group that is considered no, the no group or the CF CF no. And it's often pitted against other departments within a business, especially during this time of year when many companies are rolling through or in the budget season. The traditional standpoint, whether you're a CFO or you're uh a business leader or business owner, large or small, the traditional standpoint is an either-or. Let's talk about an example. The IT department is trying to head deadline for a new service. Let's call it Service X. So they're they're trying to head deadline to release this new service that sales is already selling. That sound familiar to anybody. Keeps at it, keeps selling. And you know, let's say maybe they're even exaggerating possibly what service X can do. And IT is running to try to keep up. IT has said over and over, they've asked, and they've they said, look, we really need a new developer to get to the beta version, to get the beta version of Service X finished. Sales is out there selling, they're getting great feedback on service X, sure. And sales really wants to increase spin in the marketing area to take advantage of that. Who wins?

SPEAKER_00 3:55

Who gets the extra $150,000?

Scott 4:03

Uh has has anyone come across a similar situation in that? I bet you probably have if you're a small business owner. The either or leads to a downward spiral. And honestly, it results in the worst of both worlds. Let's say sales gets $150,000. Well, then you have IT complaining that sales gets everything they want, they always get the funds. And then sales gets mad, they're being handcuffed for generating new leads and blames that IT gets all the funding. If if you pass the money, the $150,000 in this case over to IT. I really don't like the either-or. I prefer an and or both mindset. Using an and or both mindset creates a synergistic thinking. It forces and really allows people to brainstorm about the combined problem. It doesn't have to be IT versus sales, it doesn't have to be finance versus operations. It can truly be an and in both. But you have to work together to find ways to do both and really think about if both is truly needed. Because how often in business can you successfully can you be successful choosing an either or between two competing priorities? And the and and both doesn't necessarily mean that everything happens at once or even in parallel. You have to come up with solutions that allow an and slash both approach. Let's walk through some questions that that frames this up a little bit. If you if you're going through a planning or budgeting process and you know that IT, let's say has this need, or two two competing groups or two competing people have have budget needs. Well, when was the last time you had the decision-making representatives from both parties in the same room? Where it forces and or it really opens up the opportunity to discuss the needs with all the impacted parties. You have to let them know that there is only so much funding to go around, right? You need to be clear with them and upfront that look, we don't have enough funding for everything. But then you open the floor. You open the floor to both parties to state their cases. And you leave the table open to multiple solutions. Don't throw anything out. Well, maybe some ridiculous things, but leave the table open. Open it up to multiple solutions, and then discuss how each party has a viable argument. Just admitting that both parties have a need is going to soften them a bit and get their buy-in for the optimal solution, which is what you need to do next, is talk about the solutions and talk about the solutions that can work for everyone and where everyone can benefit. Let's return to our example that we talked about before. So we've got a uh $150,000. If you remember our example, IT. The situation is we have Service X. Uh, sales is out there selling it already, they're getting a lot of really good feedback on it. IT is scrambling to catch up and finish Service X, and they've requested look, I need a full-time developer on this to finish. Sales doesn't want to lose the momentum they're seeing in the market. They want to spend $150,000 on marketing. And they want it out there now so that they can continue to take advantage of this sales push that they're seeing. So let's let's use that example and walk through it here. We're we're we're an option to start is can we sell something that we can't even offer? Meaning, can we sell something that isn't even finished? Think about will the clients or how happy with are the clients going to be with a partially worky, working or a buggy solution. So those are some of the questions to ask the sales group. Do you really want to sell something that's not even out in the market? And if it is in the market, it's gonna be it's gonna partially work, or maybe it's gonna be a little, it's gonna be really buggy because we're we're pushing out the door and we haven't fully tested it or gone through the entire release process. Let's turn to the RT group now. Does the IT really need a full-time developer, full-time salary developer on staff? Or is this truly a short-term need to get this release finished? Perhaps we find a happy medium, or we think about an allocation of the funds over time, even. For example, perhaps we bring on a contract developer to finish the release. So we get through, we get ourselves through that release, we finish service X, we get it out the door. We move, maybe we that maybe that's not a full $150,000. So maybe we can move some of that budget to marketing and still get some of the marketing out there. And then when this contract developer period is over, we reallocate those funds into the marketing so that we have one, a service that works, and two, we have service X that's that can be released and hopefully works as it's intended. And then we can help out the sales group with the marketing. And it's it's taking the time and bringing the parties together and explaining and being clear to sales what they get and they don't get with this release by limiting the sales spend. Then upon the release, you know, again, we reallocate the contractor spin to push hard in the marketing and to promote the service.

SPEAKER_00 10:34

In the end, sales wants to sell. So IT, let's get them something to sell.

Scott 10:44

In the end, IT wants to provide a good working service. So let's get them to that point. But if you don't bring both of these parties together and start talking about what their true needs are, and so the other party can hear what their needs are as well, there's gonna be a lot of finger pointing. There's typically finger pointing or accusations that they get and I get what I what they get and I don't get. It's not a whole lot different than my two boys. I've got a 16 and 14-year-old, and one of them is constantly saying the other one gets everything they want. Well, unfortunately, a lot of companies work that way too. And I try to sit them down at times and explain to them that it's not exactly that way. But when you do it one-on-one, it loses some of the effect. Whereas, let's get IT in this case, let's get sales in this case. Let's say let's just describe what you know, find out what their true needs are, and then come to that solution where sales gets to sell and IT gets to provide them a good working service. Two more other quick examples are let's say you have two positions and and you only need to have budget for one. Well, let's work through the timing of when the roles are higher. Let's track our earnings for you know a certain number of months, and let's see, okay, when is the potential to hire number two person? Maybe we can't hire both individuals at the same time. So let's talk about the prioritization between the two. But then let's forecast and see when the timing we can hire the second person and be open with with the individuals that that own those two hires so that they don't just think it's a no. They realize, look, we have limited funds, we need to work together to figure out the best sequence for these two hires. Let's talk about another example. Let's say there's a new product versus uh operational efficiency. We want to get a new, we want to get a new product out versus we have a budget need for increasing the efficiency in operations. Well, maybe we can perform some studies or do an intro or introduce a sample of a new product to the market just to see how how that new product could might be able to do instead of going all in on the new product. And let's invest in the operational efficiency that could potentially create some savings that are then reallocated to this new product. Typically, there's ways to find an and or both. There might be timing, it might not be exactly what everybody wants, but I find that if the parties understand what's at stake, what benefits the company at best, then they understand and they can move forward in a much better place. The and both process creates discomfort, and that's good until the point where the business feels comfort in that discomfort. You do, you have to realize and accept the tensions. Individuals aren't going to come together and immediately agree with each other. There's going to be discomfort, there's going to be tension, and that's okay. But try to apply the both and, and if you while you're doing that, try to limit the emotions. But as you can imagine, the communication is the key. Where it's clear that you are doing the both, and maybe it's today, maybe it's tomorrow, maybe it's in a slightly different form. But we're trying to get to a point where you're doing both. You're getting both sides. The goal is finding that both and and solution. Now, a few do's and don'ts when when you're trying to apply this is don't lock people in a room alone. Don't don't put them in a room and say, look, you don't come out until you you've come to a solution, because that's just going to be head bunny against each other typically. They typically will need a mediator. They're typically going to need somebody that's there to help this process. You also don't want to overextend the business, making everybody happy. That doesn't work, and that's not typically the best for the business. Also, don't assume, as a leader, don't assume you know what either side truly wants. You may be pleasantly surprised. Let's say you sit down and the sales, you know, you start having these conversations, going back to our example. And once the sales understands that, you know, we can't get this product out without glitches or bugs unless we spin a little more on it, sales might come back and say, you know what? I don't want to sell a dud. I don't want to sell something that I'm gonna have to go back to our clients and explain why it's not working. They may be on your sides. So don't assume you know what either side truly wants. And help both sides find what's best for the company. Most people truly want what's best for the company, but they have a difficult time to realize it or find what's best for the company. Find the both. And if not, be ready to make a hard decision. If the best decision for the business and both sides, if a solution is the best decision for the business, and both sides hear the rationale, then they should be fine with that outcome. They know the why. And they aren't guessing or making up reasons in their head. Because I'll tell you what, people in a business will always come up with a worse reason for why a decision was made if they don't like it, if they're kept in the dark. But if they know the why, then they aren't guessing, and then they are creating their own uh version of the truth. I like to wrap up all of our shows with one to three immediate takeaways that our listeners could literally put into action as soon as they turn off the podcast. So, what can I share today? It's based around what I've already mentioned, but the three three steps are bring people together for budget decisions, discussions, and discussions. Listen to both sides for their budget needs, and welcome solutions while being ready to make the tough final decision. I also enjoy listening to podcasts and take book recommendations from our guests. So today I'm gonna share a podcast that's a little bit different. It's the Storytelling Lab by Rain Bennett. It's a really interesting show that walks through how you incorporate storytelling into life, into business, into entertainment, which is Rain's background, and really anywhere and definitely applies to both personal and business life. So if you got a little time, check out the Storytelling Lab by Rain Bennett. I hope today's self-hosted show has been beneficial. At the end of the show, I typically ask people to share something about them online. And in the intro, I mentioned a new business that I've kicked off called PathPredict. PathPredict provides a customized solution for staffing companies needing clear finances, strategic planning, and CFO guidance. We apply the six-step step method to staffing firms to understand current financials and the CFO guidance to build the map to their goals. The six-step method is one, we perform a financial health check. Think of an expert opinion about your financials' accuracy. Two, we set the goals and metrics for your business to reach your goals. These are the signals that to track your progress towards your desired goals. Three is we build the annual budget that aligns with these goals. And this is the ability to see where the business is going. Four, we integrate the financial model. And this is the map showing what needs to be done. Five is we build the financial muscle. We provide monthly CFO sessions so you're all so you have access to a CFO and you always talking about and knowing what the next 12 months is going to look like. And then six, the last step of our six-step method is a financial health debrief. At the end of the 12 months, you take a look back and identify and learn, more importantly, you learn from all the wins and losses from the past year. The finance program is created for staffing firms and customized to their specific needs, plus, is supported by CFO with staffing experience. It's the way for staffing firms with no CFO with less than $30 million in revenue to find their CFO for $2,500 per month. Alright, folks, that's it for today. I'm Scott Geller, and I hope you join me next time for budget your business.