Enron legacy leaves finance flailing

If ever you needed evidence that good solid financial management had hit the business [and entertainment] mainstream, then the latest reviews for west end musicals provide an unlikely source.

 

When plans for a musical based on the fascinating goings-on at energy giant Enron were first touted, I can’t imagine there were many who anticipated its success. After all, accountancy fraud and economic meltdown don’t tend to figure highly on the list of killer Theatreland themes.

 

But more than simply a blow-by-blow account of the corrupt imploding of the company, Enron the musical has tapped into a zeitgeist. Glitz, polish and production values aside, perhaps part of the appeal of the musical is its overwhelming point is that nothing has been learned: that, even as Enron employees were losing everything, others were pocketing fat bonuses.

 

That business has carried on regardless, and refused to heed the lessons of such a wide-reaching scandal, is a controversial viewpoint that desperate regulators would no doubt quickly rush to poo poo. Nonetheless, the knock-on effect of Enron (the accounting fraud, as opposed to the musical) cannot be underestimated.

 

Just this week Big Four firm PricewaterhouseCoopers published a fascinating and damning report criticising finance departments in business for failing to rise to the challenges presented to them as we exit the recession.

 

For high-achieving finance teams, success is all about ‘business partnering’; in a nutshell, understanding both finance and business realities, challenging decisions (made at the highest echelons of business) and essentially acting as a business consultant.

 

But for most finance teams business partnering is little more than a utopia. Nine years on, finance is still struggling to juggle all the elements of a role shaped in no small way by the Enron effect; demands for a more business-oriented view combined with the pressures of compliance and control, and calls to tightly manage costs, oh yes and provide better management information to the business.

 

It’s not necessarily a lack of will that is holding companies back. The report blames a lack of training, resources and, perhaps more worryingly, business acumen for compounding the mismatch between the kind of support CEOs are demanding and the support they receive from their finance teams.

 

Few will have much in the way of sympathy, I’m sure, for the poor beleaguered CFOs and their overworked teams. But finance leaders desperate to prove their worth will no doubt rise to the challenge. If something’s worth making a song and dance about, then this is surely it.