Magazine article Management Today

First-Class Coach

Magazine article Management Today

First-Class Coach

Article excerpt

If you position yourself as keen to acquire these new skills, you may find your boss to be helpful.

Q: I applied for an internal vacancy I felt confident I had the skills to do well. Although I was interviewed, I didn't get the job, apparently because I haven't had experience of managing profit and loss. I don't see any way of acquiring this experience in my existing organisation. Should I leave?

A: Having 'responsibility for profit and loss (P&L)' sounds a fairly straightforward role but in some organisations it's a complex one and not just a question of understanding the balance sheet. If the business is going through a bad patch, P&L responsibility might involve taking tough decisions and following them through: stopping projects, losing staff, selling assets.

If the enterprise is doing quite well but needs investment to grow, the responsibility might include negotiating with stakeholders to allow a temporary fall in profits in order to build up the resources that will allow expansion and lead to future profitability. And even if the business is flourishing, the role demands decisions on how much of the profits should be shared with employees, how much is reinvested in the business and how much returned to shareholders.

These different scenarios require a range of skills from the role-holder - for example, vision and strategic understanding, persuasion and negotiating skills, and the ability to communicate effectively with a range of audiences, as well as a good understanding of the financial levers.

I asked Neil Jones, managing director of Carat UK, a media planning and buying company, what was the biggest stretch for him in assuming responsibility for P&L 18 months ago. 'I had understood the top-line figures, but I needed to go deeper. This is quite a complex business and I had to get into the granularity.'

In his view, if you don't understand which levers to pull to make the most of all aspects of the business (not just the bottom line), you are not in a position to optimise operations. 'That's why so many FTSE-100 companies are run by ex-finance directors,' he adds.

Strong commercial acumen, a keen eye for detail and a passion to get behind the broader picture are his criteria for success in managing P&L and the business.

If you can, find out which parts of P&L management you are judged to fall short on. …

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