Something a little more tangible for today. I’m about to start in my new group on Monday. Should be fun and challenging considering it’s a completely new area to me and the people there are smart and well-connected. It’s one of the slightly different areas than FP&A which makes up the core of any corp fin department, especially in a F500, so at least I have some variety on my plate — I count my blessings.

I’d like to leave some honest thoughts about finance and working in industry as well as a large corporation. I’ll start with the last portion because that’s the low hanging fruit here.

Corporation — there’s the stereotype about people being cogs in the machine in a large corporation, and I can certainly see one being stuck/pigeon-holed into such a position very easily. But at the same time, I think one can always be proactive and aggressive in their approach to achieve their as well as their bosses goals. If one does that enough, with a good dose of interpersonal skills of course, I don’t see how you can’t get your way, or at least a way out of the current situation you’re in. In other words, keep moving and don’t be lazy/complacent. If you have to complain so much about your job, up and leave to somewhere better already. The only question is do you have the courage and the tenacity to do so? No excuses.

One more thing to help alleviate the ‘cog situation’ — talk to people. Happy hours mean a lot here to people, and people take mental notes of who comes and who doesn’t unfortunately. Going to all the happy hours certainly isn’t a substitute for crappy work ethic and production, but it helps you connect with your peers and get insight into/feedback on information you may never have thought to seek out outside of the 3 walls of your cube. Alcohol is afterall a social lubricant, and in a corporation, it certainly oils up the gears and cogs and gives a chance for them to really speak to each other, as people and not as cogs.

But at the same time… some people just aren’t a fit for the corporate culture. I happen to like having less personal relationships with my colleagues, so for now it doesn’t feel suffocating.

Industry

In the pre/post-MBA world (ja… classist undertones unfortunately), when one mentions ‘industry’, it usually (don’t take my word for it) means anything outside of consulting, banking, high finance (PE/HF/AM), and some other examples that I can’t think of right now or am currently unaware of. Working in a bank for example, can qualify you for industry if you are not on the front office selling anything; e.g. working in IT in a bank. ‘Industry’ as a vague term, means ‘an operational role’ for lack of a better explanation.

A lot of middle/back office roles qualify as ‘industry’ roles such as HR, IT, Finance, Operations etc. Your role is to add value to the operations of the company; this could be for example, strategy or expense related, systems or processes related etc. C-suite executives are also operational roles because they don’t bring in any business, but they add value to the corporation/industry through making strategic decisions. So as you can see, ‘working in industry’ doesn’t quite equate to working back/middle office. It means more in the sense of adding operational value to the company instead of production value (creating/selling products) to outside clients.

For me, I do like working in an operational role when I can see the larger picture and I understand why I’m doing what I do — in essence, when I understand how I am adding value. Instead of just doing whatever my boss tells me to do, I like and want to know how my work is helping the company save money or make more money in the future. It makes me feel like I am part and parcel of building something larger than myself, and it’s the sort of feeling one seeks out in starting own’s own venture. The down side occurs when you don’t really feel like you add value, or you’re not seeing the larger picture here. Maybe one feels like they are always supporting executive decisions but never really calling the shots and understanding how the business works.

I have been very fortunate to have been placed in a rotational program.. and my first rotation has given some insight into the business that we work in, so I am very grateful for that.

Finance & the ‘Ecosystem’

Finance is an interesting function to be in. I think a lot of what we do is similar to what the Operations people do at times, but we have an extra focus on reporting — both external SEC as well as management reporting. That is why people often label internal corporate finance folks as glorified accountants. Is it true? Somewhat. Is it interesting? Yes. But it’s only interesting to the extent that you have taken at least a basic accounting class and want to see the real life implications of those rules, because now one can understand how 10Qs and 10Ks are produced for the outside world.

Of course, Finance is a large and diverse function and another important role besides reporting is the financing of the company. Finance helps look for sources of money and makes sure that our expenditures and investing needs can be financed appropriately without bleeding the company dry of cash/assets. Thus, whether it be through the reporting or the financing function, one begins to understand the metrics and ratios of the industry and how the financial statements really flow and feed into each other. In short, one begins to understand how to evaluate the ‘personal health’ of a company through its financials and commentary.

Personally for me, working in Finance and studying the CFA at the same time has been a very self-reinforcing process because they are entirely complementary to each other. One shows you the real life workings of producing the financials of a company, while the other shows you a bit of that and a lot more about the entire ‘finance ecosystem’ altogether. What I mean by this ecosystem is the financial services industry, which pertains to the relationships between the internal corporate finance folks (me), the bankers/equity research folks (sell-side), PE/HF/AM (buy-side/investors) and all the sales people & traders working on either side. Let’s also not forget the auditors that scrutinize the financial statements that corporate finance produces so both the buy and sell side can rest assured that the reporting has been done somewhat truthfully. This is the ecosystem that I understand as of today; consultants to me don’t quite fit in the financial ecosystem because they usually sit on the more operational side of it (though there are investment consultants etc.) and advise on the company’s operations directly.

This has been a fairly long post so I’ll leave it as such. To whomever reads this, hope this was truly tangible and educational.