Bad Data Kills Great Finance Professionals
Your adrenaline is pumping and you’re up next to present your numbers to the senior management team. You’ve been working so hard to get to this point and you know there are no two chances with these senior executives. This is it. You put your presentation on the screen and after successfully having briefed them on the executive summary you put on this slide…
You’re about to proceed with explaining the details of the number but within three seconds of putting on the slide the Chief Commercial Officer points out a fatal error in your variance calculation of total revenue. You forgot to include “Other revenue” in the “Total revenue” variance! Despite it being a simple mistake you notice how most of the management team is more or less spaced out throughout the rest of your presentation. You blew it! It will take six months before you get another chance.
The simplest errors will kill you no matter how much of a genius you are
This was a very simple example but let’s be honest. It has happened to all of us. Oftentimes it’s something more complicated that gets to us i.e. the numbers we put on screen are not erroneous in themselves but the calculations behind them were and when you found out two months later and had to go back to management and tell them it was even more embarrassing than when you made the simple error in your presentation. Having good data and solid calculations are the backbone of every good finance professional. With each mistake you make you lose credibility and will need to make up for it and that typically takes a lot longer than it would’ve taken to prevent the mistake from happening in the first place. Your manager or your team might be able to overlook simple mistakes from time to time but you can be certain that senior management will not. No matter how great of a finance professional you are if you can’t get the basics of good data right your bad data will kill you.
It’s not just the mistake, it can have a serious business impact
If I look at my own company and some of the issues we sometimes face you can quickly see how having bad data as the basis for your decisions can create serious issues. One of the crucial numbers for Maersk Line is the unit cost or Cost/FFE (forty-foot equivalent container). The lower the unit cost the more competitive we are in our pricing or alternatively the more profit we make. So you’d think knowin