“Stories and lessons from an unexpected journey in finance.”

Tuesday I argued the planning cycle should take three weeks, not three months. The line that got the most pushback on Tuesday was this one: take it to the board as a range, not a point.

Here’s why that matters more than it sounds.

When you hand a board a single number, you have handed them something to negotiate. The conversation becomes about the number. Is it too aggressive. Is it sandbagged. Can we get to a bigger one. Two hours later you have a different number and not one new piece of information about the business.

A range with named drivers changes what’s on the table. Now the discussion is about which drivers are real, which ones you control, and what has to happen for the top of the range to be reachable. That’s the conversation you wanted in the first place.

The objection always comes, and it comes fast: so which one is the real number?

Here’s the answer I give.

The base case is the plan. That’s what we’re committing to and what we’ll be measured against. It isn’t a hedge.

The range is risk disclosure. It’s the honest width of the outcome given what we know today, and it belongs in front of the board for the same reason a material weakness does.

The drivers are what we’re managing. That’s the actual work, and it’s the only part of the package that changes what anyone does on Monday.

Say those three sentences out loud in the meeting. It closes the debate about which number is real, because you’ve told them all three numbers are real and they do different jobs.

At a sponsor-backed software business I built a full-year forecast this way — downside, base and upside tied directly to the production pipeline. A first quarter bookings miss turned out to be the single largest driver of full-year variance.

The value wasn’t the range. It was that the board stopped arguing about the quarter and started talking about the trajectory.

That’s the whole point.

When you’ve taken a range to a board, did they engage with the drivers, or did they just pick a number and hold you to it?

#TheAccidentalCFO #FPandA #BoardReporting #FinanceLeadership #inersec