Categoriearchief: Advisor

Why Tech Should Behave More Like Finance

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Tech executives in particular should take a page from top financiers on how to build efficient, competitive, and successful companies.

The financial industry often gets a bad rap, thanks in part to world-shattering events like the 2008 recession. It’s tough for an industry to appear on the up-and-up when a few legacy companies upend the global financial system.

But not all finance organizations are Lehman Brothers or Bear Stearns — in fact, most of them aren’t. The most pure markets in finance are incredibly sophisticated and arguably result in the most level playing fields of any industry. This is largely due to the fact that legislation forces transparency, so the sector must be vigilant about plugging holes and rooting out corruption.

Leaders in other fields can learn a great deal from studying leading finance companies. Unlike tech companies, which maintain relatively friendly relationships with competitors, finance is a dog-eat-dog world. Finance companies refuse to permit bloat and inefficiencies because they can’t afford such distractions when billion-dollar decisions are on the line.

Finance’s Finer Points

Not all business leaders desire a house in the Hamptons and a private yacht, nor do they thrive on the fast-paced, 24/7 work ethic that finance demands. But founders and executives of all stripes could stand to cultivate some of finance leaders’ most effective qualities.

Here’s what distinguishes the leaders — and winners — in this industry:

They take management seriously.

Major finance corporations conduct extensive management trainings that yield standardized processes and well-trained leaders. Executives in the tech industry would benefit from more intensive training, for ourselves and our staff members, before diving into or doling out management positions.

They recruit talent aggressively.

Finance companies know how to entice the brightest analytical minds, and they hook them before they’ve even started their careers. Much like talent scouts pursue college athletes for the big leagues, top finance organizations operate strong recruitment programs. They visit the best universities in the country, promoting their grade-A internship opportunities to promising would-be investors.

They’re data-driven.

Finance professionals rely on high-level, high-quality data information to stay on their competitors’ trails. Minute alpha advantages make the difference in billions of dollars in profit, which is why you see finance companies using predictive tools that are years ahead of those in any other industry.

Finance is a zero-sum game.

Professionals in this field either win big or lose big, and they’re keenly aware of what’s at stake. That mindset creates a hyper-focused approach to delivering results.

Want Profits? Bottoms Up!

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BURP: Don’t knock it ’til you try it.

I’m not suggesting that you host an open bar at work. What I am suggesting is that you adopt the BURP strategy in your place of business. Okay, now I’m sure you think I just returned from a two martini lunch, but alas I’m quite serious (yes, sober too). The BURP strategy (Bottom’s Up for Remarkable Profits) is based on a single premise: nobody knows how to make your business succeed like those that do the work.

In business, high-level managers are responsible for creating the vision and mission, setting the direction in which the business will go and the means by which it will go there. Mid-level managers are responsible for implementing the policies and plans created at the highest level. Front-line managers direct the activities of the non-managerial personnel. Each of these people are subordinate to someone. If you’re the CEO, it’s the Board; a VP, it’s the CEO; and so on.

Bottom’s up? Why does it matter?

@ArtOfTheTattoos

Every subordinate is the expert when it comes to the jobs they’re entrusted to do. Success and profitability depend upon the performance of each and every subordinate. Imagine that staff at any level are not aware of the compelling vision and mission.

Imagine that the instruction given to them is not sufficient, clear and practical. Imagine there’s no feedback loop, and all these things go unnoticed.

Who knows best when things are not what they should be? The answer is the subordinates — every single one of them. Bottom’s-Up matters because those who are performing a task know better than anyone (Yes, even better than the one who assigned the task) whether or not things are working well and how they can be improved. A more effective and efficient workplace is one that can and will achieve greater profitability.