Developing Excellence in Finance Teams
Linking strategic outcomes to personal development
Much is written about the role of CFO as a leader, the changing role of finance and the need for increasing flexibility of the finance team. At the same time, day to day decisions such as whether or not to outsource various processes, invest in new ERP systems and the like, compete for space and attention in the CFOs in tray.
How does the CFO respond? How can they take these decisions? Who will carry them out? How well will the team deliver? What is outside of their control? How will it be managed?
Looking at accounting literature, most of us have little problem identifying the relevant assistance for technical issues. Accounting manuals give great detail on the application of accounting standards. Expert help is readily available. Our training is geared towards providing the analysis, logic and clarity of thought which are excellent skills when looking at the impact of balance sheets on shareholder expectations.
However, much of what a CFO deals with is less clear. There are ambiguities about day to day decisions, where there are judgement calls to be made. Investment appraisal can only go some way.
At some point the CFO has to develop a vision for the finance function and build the team to deliver it. The literature here is less full, less detailed and less analytical. Team building courses abound, but will they build the team to deliver the organisational goals?
The way we have approached this, and want to share with you, is based on three elements:
Personal and Finance Team Team AlignmentDevelopment
Strategic Context and Operational Response
Strategy always sounds a BIG word. It summons images of away days, consultants and deep analysis before someone arrives with „The Answer‟. What CFO‟s often need is something simpler, which can be used as an analytical tool and the basis for communicating within the team and with stakeholders.
? 2005 Steve Satterthwaite and John Tranter
To do this, we developed the following model:
?John Tranter 2004
ComplianceThis shows that, whilst as CFOs we might see our role as the „Strategic Partner‟, our success starts from getting the basics right – the bookkeeping role. We have to
deliver in all four quadrants. The steps we used with this model were threefold:
; Examine what the deliverables are for each quadrant
; Determine the projects required to meet those deliverables
; Use it as a communication tool
The deliverables can only be determined by listening to the demands of the operational side of the business.
Simplistically, the bottom two quadrants of Bookkeeper and Controller will tend to have more generic deliverables, more independent of the sector the organisation is operating in. These are things which need to be done, the stoking room of the finance function. They may well be those activities which third parties can provide.
However, the top two quadrants are crucial to the success of the business and increasing competitive advantage. It is by aligning the outcomes of strategic partner and commercial manager with the operational needs, that the finance function will be seen to deliver added value. These are the activities which are part of the organisation being able to maintain its competitive advantage.
To give a flavour of how this can look in practice, at very top level key tasks which might be identified could include:
••FundingFunding••Risk Risk ••Resource PlanningResource Planning••PricingPricing••Market AppraisalMarket Appraisal••Tender MgtTender Mgt
Commercial Commercial Strategic PartnerStrategic PartnerManagerManager