When it comes to knowing the numbers behind what makes your organization run, do you take a proactive learners’ mindset or an ‘Ugh, I hate numbers’ approach to the opportunity? If you answered the latter, it’s time to think differently about the way you approach your career goals.
In one of my earlier posts, I shared thoughts on why the glass ceiling is actually lower than we think and how women can break through it. One of the points I made was the importance of having more women in profit and loss (P&L) responsibility roles.
Bottom line, women simply aren’t getting access to the C-suite pipeline as quickly as their male counterparts due to a number of reasons. However, having led as a senior executive at a Fortune 1 company, I’ve seen how common it is for high-potential women to get overlooked for leadership roles simply because they haven’t sought out the opportunity to gain this essential expertise.
A McKinsey study recently reported that women are underrepresented in line roles (profit-and-loss or core operation roles) at every level of the corporate pipeline. By the time women reach the SVP level, they hold only 21% of these positions. Since the vast majority of CEOs come from these roles, this dramatically hurts women’s odds of reaching the top.
- Financial experience has nothing to do with my role in marketing, communications, human resources, etc.
- Finance roles are often behind-the-scenes positions that won’t get me the exposure I really want for my career.
- I can avoid taking on a P&L role and still achieve success.
These thoughts simply aren’t true and being uncomfortable with numbers isn’t an excuse to professionally limit yourself. As a matter of fact, research shows financial roles are essential for breaking through the glass ceiling.
However, I understand the reluctance in getting comfortable with numbers. When I was given my first significant P&L role of managing more than $500 million, I never would have imagined the doors that would open because I mastered that role.
Why are P&L roles so essential for women?
They’re mission critical – These roles are essential to the survival of any company or organization. Without them, the system would simply fail or be significantly impacted.
Finance transcends all industries – Whether your role is heavily tied to finance or nowhere near the CFO’s office, all business decisions are based upon budget and revenue management no matter the organization.
They connect you with senior leadership – Most men experience fast-track success to leadership roles because they’ve taken on finance and operations roles. This results in developing stronger relationships with senior leaders and sponsors who can eliminate the barriers to the C-suite.
They help you make the most effective and strategic business decisions – When you know your numbers you’re able to identify the critical indicators on the P&L and how they impact each other.
They are vital for board position access – I recently reviewed the financial statements for a non-profit organization for which I’m on the board. If I didn’t have a basic understanding of the critical indicators, I wouldn’t have been able to ask some really important, thought-provoking questions of that organization. I now have the reputation of being tough on the numbers and can ask questions that make me an influential board member.
So how do you tap into P&L responsibility and gain the financial savvy you need to reach the top? Here are six strategies to consider.
- Know your own numbers – Whether you’re a team lead or simply managing a project from start to finish, you should always have a basic understanding of
1) the revenue generated,
2) the direct cost expenditures, and
3) the net profit gained.
If you know the general budget, the expense lines on that budget and the return on investment gained from executing the business well, you’ll be in good shape to make more sound and strategic decisions.
- Ask! If you don’t have access to this information or if you think you need more exposure to the numbers, ask your team lead about what this kind of financial experience might look like earlier rather than later in your career. You might also consider selecting a mentor who can develop your thinking around finance and operations.
- Get involved – Test your financial skills through a local organization or non-profit committee that makes smaller decisions based on budget and revenue. Most organizations will give you a sense of their basic operations from helping plan annual events to building awareness around their cause.
- Take a financial course – Some companies and organizations will offer professional development such as finance training for non-finance managers. However, if you don’t have access to that development through your work, you can always equip yourself by taking an online course either through a certified program or local college. This will teach you the basic principles of evaluating a department, organization, or business segment.
- Manage your own personal budget – A Fidelity Investments study found women show less confidence when it comes to making their own financial decisions and wish they had more knowledge to enable them to make smarter financial decisions. When you take control of your budget, savings and investment options, you set yourself up for building effective financial habits that will transfer over to the way you view your own work budget.
One of the best pieces of advice I ever received was from David Glass, former CEO of Walmart, Inc. when I was offered a P&L role at Sam’s Club. I was on a career track to succeed the chief human resources executive. When presented with the opportunity to lead a large P&L, Mr. Glass’s advice was, “Go for it! You can always get back into the People Division later in your career.”
The same goes for your career plan. Consider what financial experience might look like in your particular role – and make it a part of your career aspirations sooner than later.
What about you? What steps will you take today to build your financial acumen and prepare for executive success?