Sometimes financial modelling courses are not enough

When companies (like these ones) http://www.financialmechanics.com/our-clients/ approach us for training, it’s often because they understand that the FAST modelling standard provides a uniquely structured and disciplined approach to financial modelling. In many instances they have been struggling for a while with chaotic, poorly structured and hard to read models. Sometimes these models have been built by modellers on their team who developed their own approach, often they are using models built by multiple advisers with no commonality of approach between them.

They often approach us for training thinking that this will solve their problems. We frequently have to advise those clients that training is only part of the solution. As Nathan Goode, Partner at Grant Thornton, explains in this video, increased professionalism in modelling requires not just a training course, but a whole change management process. Our financial modelling courses are certainly not the cheapest on the market and so we’re very keen to ensure that our clients get an excellent return on their investment. We often tell clients that sending analysts on a £2,000 training course is a waste of money if they then return to an environment that does not encourage (or preferably enforce) a disciplined, structured approach to modelling.

If you are responsible for how modelling is done in your organisation, training is not the only thing you need to think about. While we’re happy for you to send people on courses, we would prefer that you looked at the bigger picture first. As Nathan Goode describes in his video, Grant Thornton approached improving modelling as a full change management process, of which training was only one part.

People who “do financial modelling” often do a lot of it. It’s usually a pretty big part of their job. Sometimes it is their whole job. If you are going to ask them to change the way they do modelling, that’s a lot of behavior you are asking them to change. And the longer they’ve been doing it, the harder it’s going to be to change those habits.

We have four recommendations that may help. We have written a separate post on each one. We’re sure you have a lot more so please contribute by leaving a comment.

Our recommendations on raising financial modelling standards in an organisation:

1. Provide crystal clear direction
2. Consider both hearts and minds
3. Consider the environment
4. Remember that change is exhausting