Thoughts from Lindsey Bahr, Director of Finance and Administration
Leveraging the power of transparency to release fear in uncertainty
When the COVID-19 pandemic began, many of us were thrown into uncertain and stress-provoking situations. Those situations can stir up fearful and worrisome thoughts: Am I going to lose my job? Will there be enough cash to make it through the year? What happens if I get sick? My team knew that we needed to give the people in our organization confidence to alleviate the fear that came with the sudden and constant change. The work we were doing minimized that fear, and that’s potentially one of the most important things our team did in the beginning.
Some fear is healthy — we didn’t want to give the impression that everything was okay if that wasn’t the truth. But we also didn’t want people to be paralyzed by anxiety. We recognized early on that if we tip-toed around the subject, we would create a breeding ground for those disempowering feelings.
Creating visibility around cash flow
Without solid systems already in place to support cash flow projections, our first focus was to establish processes and make this information visible to the organization. We had three scenarios – predictable, probable, and prepared – and we all aligned to this common language and their definitions to understand where we were headed. We would update projections for each scenario and regularly share with the team which one we were norming to over time. It helped people to know how to adapt rather than react.
We shared not only the projections but also the process – i.e., how often we’re going to be updating our assumptions and general trends we were seeing. In a situation where our team was really seeking to understand our cash flows, this approach served us really well. It provided confidence that we know where we stand and though we might not know what the future holds, we were being proactive about preparing for whatever comes our way.
Leaning into progress over perfection
We put an emphasis on our value of progress over perfection given the urgency of the situation. Our processes were continuously evolving because we had to get started and make do with what we had at that moment.
Pre-COVID, we were starting to study our financial model and talked about forecasting, but nothing was quickly coming to fruition while we showed up in Level 6 towards those ideas. Showing up as Level 3 made us intentionally move forward quickly and understand that any progress was good, and we could improve it along the way.
Adapting to move forward
As time went on and the year unfolded, we realized the systems we built had served their purpose and aided us in learning, yet they weren’t sustainable to easily scale. In order to move forward, we needed to evolve our systems to something that would last. Getting grounded in a process that could scale provided an opportunity to adapt by making sure the information was always accessible across the organization, using standard naming conventions and language to make it easy for everyone to follow along.
We put a lot of energy into these efforts to make it part of the way we work. We did this through educating our team, challenging old thoughts and adopting new thoughts, and making financial information visible and readily accessible. This shift in how we approached our work caused us to be intentional about how and why we do things and what value our work provides.
Although we faced change and challenges throughout 2020, there have been learning opportunities and growth through adversity. When the year began, we didn’t have a financial forecasting system; we had a budget system that wasn’t in tune with our cash flows, so a lot of the systems and models we ended the year with didn’t even exist at the start of the year. In that short amount of time, as crazy, chaotic, and busy as it was, we were able to accomplish some amazing work that stemmed from the passion of our team for the work, their support of the mission of our organization, and simply being flexible throughout the process.
We have come to realize that across the organization, everyone is responsible and accountable for the output of the financial model. When we were updating our financial forecast, we wanted our team to be able to understand what direction we were moving in and how their work could support and influence the financial model. Even though we have the accounting and finance team driving the system, we put a level of ownership across the team, so everyone can feel connected to the model, understand how the work they are doing influences the model, and most importantly have an overall clear understanding of how the model works.
Going into 2021, we are proud of the work we have accomplished throughout the past year, but we have built it for a short-term view of 12-18 months. We are working on leveraging these systems and processes we recently established to give structure to long-term financial planning in order to weather the storm down the road.
We have leaned into the value of being transparent and visible in all of our work while admitting we don’t know all the answers. We don’t know what the future may hold, but we’re sharing our methods, our assumptions, and relying on data to get to our best answer, and sharing that with the team. Now that we’re regularly engaging in conversations around the financial health of our business, it’s exciting to see the curiosity that comes out of it. We’re challenging old thoughts and ensuring our financial model ties back to the work we’re doing from all aspects of our business.