How To Be A Strategic CFO (HINT: Ask The Right Questions)
By Kevin Hsu - Jun 23, 2017
As a CFO you are expected to be your CEO’s strategic partner and growth advocate. Your responsibilities include (but definitely are not limited to) overseeing the company’s business model and administering the efficient distribution of capital. This can be hard, especially when your team is already working up to 50 hours per week.
So, if you are wondering how to be a strategic CFO, I have put together six questions to help you out. Ask yourself these questions to ensure that you are continuously reflecting on the right areas, while also striving to bring the most strategic value to your firm.
1. Are we continuing to improve fiscal discipline?
In addition to examining revenue and spending, as a CFO your eyes must also be constantly scrutinizing operational metrics. No matter how large and profitable, no firm is ever in a position to bypass fiscal discipline. Your expense management is key to your long-term success and so you must continuously check and re-check operational metrics and strive to improve your firm’s fiscal discipline.
2. Who else can provide me with valuable insight?
Hopefully they communicate it to you, but your CEO wants (and in many cases needs) you to be more involved in strategy. This means that your responsibilities will also include monitoring the entire company to ensure resources are efficiently utilized. How to be a strategic CFO in this regard? Obviously you can’t know the ins and outs of this process on your own. So make sure you are regularly meeting and communicating with every representatives from every department, from HR to customer service to IT and sales.
3. Do we employ systems with self-service capabilities?
When choosing an intuitive financial reporting software tool, you want to ensure that you are employing a system with self-service capabilities that allow users to create sophisticated dashboards & scorecards with no specific skills or programming. Having self-service reporting tools that your employees and managers can utilize, means that they are free from relying on the IT department and both divisions can focus on their own projects. In turn, this frees up the considerable resources your firm collectively wastes on unproductive work, and increases responsiveness and agility of your company as a whole.
4. Can we automate more?
Automation also helps you see the big picture (and possible problems) quicker and more clearly. It also helps to cut-down on the wasted time and resources that are inevitably spent when trying to collect data. You need your team to spend their time thinking strategically and proactively, not fumbling around with hundreds of data sets (possibly in multiple currencies, multiple regions, and/or multiple branches) and spreadsheets. Automating and consolidating your business processes gives you invaluable, real-time insight into spending, policy adherence, and potential abuse.
5. Are we all committed to the goals we created?
After creating and establishing regular forecasts, it is time to ensure that all members of the team are committed to the goals created. How to be a strategic CFO when it comes to goals? Make sure you know how HR is tying employee reviews and team evaluations to your firm’s financial goals. The most efficient way to do this is through dashboards and scorecards, as you can break down big goals to track progress and keep team members focused and motivated.
6. Am I planning for the future?
Strategic CFOs know they need to be able to look around corners to understand their businesses’ future. You can’t be constantly looking backwards and stressing over whether you met last year’s financial goals. In this regard, predictive analysis, strategic modelling, and answering what-if scenarios are essential. These steps help you to fully understand the measurements of certain risks and then work on strategies for turning them into positive growth. However, in order to effectively plan for the future, your firm must have clearly defined processes and procedures in place. If they are right, they will allow you flexibility in the modelling of a continuous and comprehensive financial forecast.
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