What Makes a CFO Great? - Jun 13, 2009

Posted by: Julie R. Delgado in Articles

What makes a great CFO?

A great CFO's job is a very complex one.

In today's economic environment, companies are looking for a very broad skill base from their financial executive.   They seek a full range of technical financial skills, internal control and IT savvy, treasury knowledge, risk management, and investor relations capabilities. - PLUS the strategic skills to be a full business partner with the CEO.    But one thing stands out in my mind.  I think, in addition, she or he also needs to be an important thought leader and change agent as part of the entire management team.

Someone fundamentally conservative to balance the optimism of a CEO.

• One thing is certain: a great CFO will usually differ from a good CFO by the way that he or she is able to project the long-term financial picture of the company and by how the company thrives based on his or her analyses. Not only is a CFO responsible for a company's past and present financial situation, he or she is also an integral part of a company's financial future. A CFO must be able to identify and report what areas of a company are most efficient and how the company can capitalize on this information. Which markets/products/services etc are making the most money for the company and how can this information best be used to improve the company's financial future. A CFO's provides economic forecasting and modeling - in other words, trying to predict (given multiple scenarios) the best way to ensure the company's success in the future. I call these "If..Then" scenarios. Let the CEO be the visionary, but add value by providing a solid business analysis to the idea.

A qualified professional who can assemble and analyze financial statements.

• A CFO is responsible for presenting and reporting accurate and timely historical financial information of the company he or she works for. Every stakeholder in the company - including shareholders, analysts, creditors, employees and other members of management - relies on the accuracy and timeliness of this information. It is critical the information reported by the CFO is accurate, because many decisions are based on it. As with all subject experts, it's the capacity to covey complex information in a way that does not go over the listener's heads that is often crucial. Key strategic business decisions should be the outcome of finely tuned financial reporting.

An eye for detail, in absolute command of the financial basics such as debt ratios.

Something of an IT expert with the ability to develop information systems that support the decision making process.

• Most people, from a measurement point of view, do not know what they should measure. So they solve that problem by measuring everything. . Too much detail robs you of any time for analysis. A great CFO's job is to focus on the key variables and manage the software to allow 20 percent of their time gathering data and 80 percent adding value and analyzing
• Providing data is critical, but that data must be filtered. In order to filter appropriately, CFO's must ensure the companies systems can sort through the massive amounts of information and provide people with the right data, in the right format at the right time. This takes a solid understanding of what IT systems can and cannot d0 so that the right questions are asked and the system is crafted to deliver focused information.
• The key to organizational success is to get data out there. That doesn't mean dumping a huge number of reports or measurements out on the table or loading that information on a dashboard and then heading back to the office to create yet more information analyses. It's certainly possible to produce and provide enormous data reporting capabilities, but that is of little value if the data is not targeted to the people who need it, and not used effectively by the targeted audience.
• Pinpointing the critical variables is essential. Rather than having your systems measure 100's of variables, which may or may not be of value, define the focus. Find the five or ten (or however many are relevant) key variables.

A solid understanding of HR and its impact on the business

• A great CFO understands and will want to measure the influence of employees attain....

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  What is Strategic Planning and Why do It? - Feb 26, 2009

  Posted by: Julie R. Delgado in Articles

    What is Strategic Planning and Why do It?

  Strategic planning is "a disciplined effort to produce fundamental decisions and actions that shape and guide what an organization is, what it does, and why it does it".

  All organizations are in a constant state of change and flux - even those that think of themselves as static.  People coming and going, budgets changing, owner/vendor/employee/customer needs and expectations changing.  A strategically managed organization is one that both defines where it wants to be and manages change through an action agenda to achieve that future.

  • Strategic planning is a way of thinking, acting, and learning.
  • It usually takes a comprehensive view by focusing on the "big picture" but also leads to specific targeted actions.
  • It is often visionary and usually proactive rather than reactive.
  • It is flexible and practical
  • It is a guide for decision making and resource allocation

  To be effective, strategic planning must be action oriented and must be linked to tactical and operational planning.  It must also be linked to a variety of functional types of planning including information technology, human resource, financing and business plans.

  The future is full of opportunity, but it takes strategic thinkers and actors to make the future exciting and productive.  In today's fast changing business environment, both managers and individual contributors alike need  a broad perspective, vision and awareness of the trends and developments shaping their world.

  We've accomplished our goal when our Strategic Plan:

  • Reflects the values of the organization
  • Inspires change and revision in products and target markets
  • Clearly defines criteria for achieving success
  • Assists everyone in daily decision making

  Strategy means consciously choosing to be clear about your company's direction in relation to what's happening in the dynamic environment.  With this knowledge, you're in much better position to respond proactively to the changing environment.

  The fine points of strategy are:

  • Establishes unique value proposition compared to your competitors
  • Executed through operations that provide different and tailored value to customers
  • Identifies clear tradeoffs and clarifies what NOT TO DO.
  • Focuses on activities that fit together and reinforce each other
  • Drives continual improvement within the organization and moves it toward its vision.

  Elements of a Strategic Plan

  • A mission statement and vision statement

                      Where you are

                      Where you want to be

  • A description of the company's long-term goals and objective
  • Strategies the Company plans to use to achieve general goals and objectives

                      Identify Strategic Issues and Strategies to address them

                      How do we get there

  • Action plans to implement the goals and objectives

  Where we are now:

  Define our market

  • Commodity or Specialty

                                                                      Indicators

  Specialty - (think "custom" anything)                      Commodity (think "Wal-Mart")

  Unique product or packaging                                  Little differentiation

  Market perceives clear superiority                        Substitutability

  Sales result form having the right product             Sales ....

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