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Comment by clairity | Hacker News Reader

> “it is not souless, it guides the entire company…”

once, as a pre-mba product manager at a mid-sized company, i presented a detailed financial projection (using monte carlo on the assumptions/inputs) for a project i was championing that went over the head of the controller (and acting cfo at the time). boy was i disillusioned after that.

finance should never be thought of as guiding a company. that’s giving them too much credit and (misguided) influence. rather, it should provide analyses to the executive team to use to make executive decisions, much like the congressional budget office does for congress. it’s one of many inputs needed to make executive decisions.

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> i presented a detailed financial projection (using monte carlo on the assumptions/inputs) .. went over the head of the controller (and acting cfo at the time). boy was i disillusioned after that.

In my experience, it is hard to find people in the finance department who understand there are other distributions than Normal. E.g., the time I had to spend trying to convince finance people that the product of two Normals is not necessarily Normal. Or, percentiles of the sum of two Normals do not correspond to the sum of the percentiles etc.

Yet, they do end up guiding the company because money drives everything.

> Or, percentiles of the sum of two Normals do not correspond to the sum of the percentiles etc.

I once had to spend a day convincing a CFO that consecutive months of ~X% increases of MRR wasn't the same as

((($MONTHS * X) +1) * MRR)

eg. two months of 10% = +20% increase, 5 months = +50%, etc.

... which is how his spreadsheet was calculating revenue projections.

How does a CFO not understand compound interest?

Finance is like the engineering department in Star Trek. They provide critical resources, and are limited in what they can do by the laws of physics, but they still have to respond to constant demands from executives to somehow make it work anyway. That means they aren’t steering the ship, but they are going to interpret guidance from the captain about priorities in ways that make sense to them.

Which, incidentally, is the very same challenge IT, or Product Development, or HR face.

Trying to think in silos and making departments fight each others is a faulty approach. If you want to transform business, change has to come from/to be accepted by the top.

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