The Empathy Trap (Part 1)
Updated: Oct 7
A business was about to cut the cost of its finance function by 25–30%. The only thing holding them back was one person. And she'd done nothing wrong.
I got an email recently I haven't stopped thinking about. A CFO we'd been talking with wrote back to say they were still weighing things up.
The sticking point wasn't the numbers. It was their Finance Officer. Dedicated. Well-liked. The kind of person everyone wants on their team. And the thought of making her role redundant was giving them real pause.
I've been doing this for 20 years. I've read some version of that email hundreds of times. And I've never once thought it was the wrong instinct. But it sits right at the centre of a problem a lot of Australian businesses are wrestling with right now.
Costs are up. Wages, insurance, rent, finance costs. Revenue is softer than the forecast promised. Owners, boards and executive teams are being asked the same question: where can we take cost out without breaking something? The finance function often ends up in the spotlight. It's an overhead. It doesn't win new customers. So it gets squeezed.
Here's the trap.
Most businesses think they have two options:
→ Cut, and lose capability
→ Keep everything as is, and keep bleeding cost
So they do neither properly. They freeze hiring. They stretch whoever's left. They put off the system upgrade for another year.
The result? A finance function that costs about the same and does a bit less every year.
After working with more than 1,000 SMEs, I can tell you there are usually three things hiding underneath.
1/ Processes nobody has looked at in years.
The finance run that takes more days than it needs to because it relies on a spreadsheet someone built in 2014. The month-end that needs three sign-offs because of an issue that happened once, a decade ago. Nobody designed it to be inefficient. It just grew that way.
2/ Single-person dependency.
This is the big one, and it's usually built by accident. One person knows how finance actually runs. Where the support files live. Which supplier gets paid early and why. That's not a criticism of that person. It's usually because they're good, so everything flows to them. But ask yourself honestly: What happens if she's sick in any given week? What happens if she resigns? What happens if something goes wrong and nobody else can check her work? That's not loyalty. That's risk. For her as much as for the business.
3/ Nobody knows what the finance function should cost.
Most owners can tell you what it does cost. Very few can tell you what it should cost for a business their size, in their industry, with their transaction volumes. Without a benchmark, every decision is a guess.
So the real question isn't "how do we cut cost?" It's "how do we spend less and end up with something better?"
That's what the next three posts are about.
Part 2: what that actually looks like in practice, and the numbers behind it.
Part 3: the hard part. What to do when the right decision for the business means a conversation with someone you genuinely value.
Part 4: why this dilemma is about to land on every leader as AI arrives.
(Spoiler: they've since made their decision. I'll share what they chose, and how they're handling it, in Part 3.)
If your key finance person was unavailable tomorrow, how long before what really matters stopped?
