How happy is your company?
Can financial management be a mirror to one’s own life
By Jamie Lyon | Published 11:54, 26 July 12
Clay Christensen, the Harvard Business School professor recently published a book called How will you measure your life? He artfully draws parallels between how companies are run, and strategies often mismanaged, and how human beings make the same mistakes in their own lives with an unhappy outcome.
One of the key analogies he draws out is that when you look at a company, its strategy is principally dependant on its investment approach. In short, how the business allocates its resources and funds ultimately determine its level of reward.
According to Christensen, one of the key problems here is that the decision making systems typically direct funds towards those investments that offer the quickest and more visible returns, but which aren’t the best option for longer term sustainable performance and success. I think we are all familiar with this tale.
He then overlays this observation on how people live their own lives. He cites examples of fellow MBA classmates who have become less fulfilled and happy in their personal lives because of divorced or losing touch with their children, for instance.
Clearly these individuals would not have purposefully chosen such outcomes, yet his observation is that many of them followed ‘strategies’ in their personal lives that achieved just that result.
At the heart of the problem, Christensen says, is poor investment strategies and choices from the outset. He observes, in particular, that high flyers spend their earlier lives building up careers because the rewards (money, status, etc) are more immediate and tangible.
In contrast, investments in the things that ultimately will bring the most happiness and success in the long term - for example, raising a family, pay over a much longer time frame. [If you have a spare 15 minutes (unlikely, I know), click here for his musings.]
I think it’s a very interesting idea. One thing that strikes a chord is the amount of effort and time that ambitious finance professionals and CFOs expend in pursuing their careers and, when they get there, the demands of the top finance role.
Having recently held a number of CFO roundtables in different markets around the world to discuss the challenges facing today’s finance chiefs I couldn’t fail to notice that one common issue continued to crop up - the time demands placed on the role and the level of personal commitment needed and expected.
It seems to me that getting the balance right is increasingly difficult for senior finance people these days. I hope this doesn’t mean today’s CFO is destined to ultimately lead an unfulfilled life.