PMs and Financial Skills
Many project managers lack financial skills, and if you're one of them, it can put a cap on your career in a number of ways.
The problem is that so many project managers work in situations where projects are assigned to them, and information is provided on a need to know basis. In other words, the project manager lives "in the world of the project," with limited access to information beyond the project.
That may seem fine for the projects themselves, but it also does two things of concern:
- It may create blind spots for the project manager, who is screened off from things outside the project. The reality is that projects do not live in a vacuum, and they are effected by other things within the organization. This could include financial information derived from dependencies among projects, or from shifting financial priorities within the organization.
- While in such a situation you may not "need" financial skills, you can see where they could be helpful. However, even if they may apply minimally (this is questionable) on the project itself, they will clearly be a factor that can enable you to move up in the organization.
While it may be only a small slice of financial skills that you will use on a project, you will use a broader range if you advance. Here are three (3) examples:
- Program management, by nature more strategic and cutting across multiple projects, will necessarily require a higher degree of financial acumen.
- Any general management position will also require great financial skills, as you will be managing an entire business unit.
- If you get involved in a portfolio of projects, this will require a higher degree of financial acumen in understanding capital budgets as well as operating budgets.
Financial skills, therefore, represent an opportunity for project managers - to differentiate yourself from other PMs, to be more effective because of your greater perspective, and to give you additional skills that will serve you well in higher positions.