How Management Can Use Financial Information to Grow

A company president of a mid-market company with $200 million in annual revenues that I was working with called all 12 of his area managers together so we could develop a stronger company strategy. When I handed out the company financial statements to explain the financial position and resources available to pursue opportunities, this was the first time that the managers had ever seen this information.

After we explained the financial statements, the managers commented that they now understood the overall corporate position and why certain decisions were being made. They also understood why their department didn’t always get what it wanted: because there were higher opportunities elsewhere in the company.

When managers have all available information, they can make better decisions to grow the business and improve financial performance. If they don’t have timely and accurate information, they can still be making the best decision from their perspective, but this can be working directly against what the company is trying to do or needs to do.

Let’s define financial performance broadly to include revenues, profits, valuation, cash flow, balance sheet strength, and attractiveness to lenders and investors.