The CFO As You Grow Program is offered in response to an ever growing need from clients for more advanced financial management services. This program was designed specifically for small, growing companies who can benefit from the skills of a highly qualified CFO but who can’t or don’t want to make the full-time investment in one. The primary goal of this program is to help our clients manage and grow their businesses more effectively.
We like to use a car analogy to explain our approach . . .
50+ years ago, before the time of computer chips and advanced electronics, aside from the oil and fuel indicators, often times the first sign of a problem came when a car actually broke down.
Now-a-days cars have computerized early warning systems or “expert” feedback systems that tell owners of any pending problems well in advance. Some systems are even sophisticated enough to prompt us about preventive maintenance. All we have to do is monitor our dashboard indicators to see if we are on track or not.
Just like a car, your business needs “expert” feedback systems to tell you when things are running smoothly—systems that warn you about pending problems and keep you on track with preventive maintenance. Unfortunately most businesses are still run like cars of the past, with a limited amount of information about their company’s performance. Generally speaking, the information is limited to financial statements that are 30-90 days old.
Often times, this results with owners being forced to make critical decisions about their company’s future without the necessary relevant information. It’s a little like driving down the road with the windshield covered up; you can see where you’ve been, maybe get a sense of where you are, but not where you’re going.
Our CFO As You Grow program includes a five-step approach to help you develop “expert” information feedback systems specific to the type of business vehicle you drive. This feedback creates a direct link between financial and non-financial indicators as well as how each department and individual performs in relation to your overall company objectives.
Specifically, we seek to identify, monitor, and help you improve Key Performance Indicators relating to the four primary areas of business: Marketing/Sales, Management, Operations, and Finance. Under each of these headings there are specific activities that, if fully leveraged, will optimize your company’s performance.
The CFO As You Grow Five Step Program
Step #1 Comprehensive Analysis and Planning
As important as it is to know where you want to take your business in the future, it is equally important to establish where you are starting from. Only then, can you accurately determine the time and resources that will be required to take you to your destination.
For that reason, we often start by conducting a Business Performance Review, Industry Comparisons, Benchmarking, and/or Trend Analysis to establish your company’s current level of performance. This analysis will establish not only how your company is performing against others in your industry, but also against your own past performance. Information revealed in this step will serve as a foundation for goal setting during your Planning Process.
In preparation for your Planning Process, we’ll work with you to complete a simple questionnaire that will highlight the financial, operational, management, marketing, and industry forces that are present or likely to emerge in your business.
The Planning Process
The Planning Process is a comprehensive diagnostic process to determine the current state of your business, to identify opportunities for improved profitability and growth as well as identify any potential obstacles that might sidetrack your progress.
During the Planning session we will work with you and your team to review your current business scenario by facilitating a detailed SWOT (Strengths, Weaknesses, Opportunities & Threats) Analysis.
From there we will develop an on-the-spot Action Plan that will integrate your present goals with any new ones resulting from the analysis we do together. This will enable you and your team to go forward with clearly defined and prioritized objectives. This Action Plan will also include measurable benchmarks and a high level of accountability for those involved with the implementation of the plan.
Step #2 Developing a Measurement System
During this process we will work together to capture the Key Performance Indicators that are most critical to your success. We will then establish a baseline of financial and performance indicators relating to your current scenario. This baseline will serve as a benchmark against which all future progress will be measured.
What it comes down to is this. . . “What You Can Measure, You Can Manage.” By identifying and monitoring the activities in your business which have a direct impact on your profitability you’ll be in a position to improve profitability in a much more controlled and targeted way.
This exercise is designed to identify specific critical indicators, both from the customer’s perspective and operationally to let you know exactly where your business stands at any given point in time.
This “expert” feedback system will keep you informed about the performance of your company on a real-time basis. Knowing and monitoring these Key Performance Indicators in your business will also give you the opportunity to improve the outcome while the game is still being played on a daily, weekly or even hourly basis.
This information also gives immediate feedback to the team about their performance and how they impact the overall profitability of the company. This is a critical step when developing incentive programs for team-wide process improvement.
Amazingly, we have found “that which gets managed gets improved,” automatically, when people have meaningful feedback about their performance.
Step #3 Financial Fluency Training
This next step involves educating your team about the link between the financial realities of your business and their individual and team performance. Financial Fluency Training is an essential element in the development of an entrepreneurial mindset within your company culture.
Many companies who embrace this philosophy do so for the purpose of translating traditional financial measurements into meaningful management information for each and every player on the team.
This approach addresses the question on every team members mind, “What’s in it for me?” By making your team financially literate and translating financial measurements into Key Performance Indicators, you’ll find your team will take “ownership” of their performance and contribute to your company as innovators and entrepreneurs like never before.
One of the leading authors on the subject, John Case, explains it this way,
“Execution is where the rubber meets the road. Generals, football coaches, and the harried managers of Subway sandwich franchises know the truth: No matter how brilliant the plans, no matter how smart the strategy, nothing gets accomplished unless people execute.”
“In business, execution is what happens (or doesn’t happen) everyday in offices and shops and warehouses and factories, in management meetings and on the sales calls and on the front lines. It’s about what people do on the job everyday. It’s what they think about and how they work together. . . get people working together productively and creatively toward common purposes, without too much lost effort. All the big-picture stuff, the mission and the strategy and everything else, is critically dependent on getting individuals working together. ”
Step #4 Designing and Establishing a “Report & Reward” System
Now that we have your team actively involved with helping you improve the performance of your company, we need to develop a company “Report and Reward” System. This system provides feedback to owners, managers and team members about their performance on a real-time basis. Exactly how much and in what form you share critical financial and non-financial information will be unique to your company.
Step #5 Monthly – Quarterly Review
Once we’ve established systems to measure, report and reward on the activities critical to your company success, we’ll then meet with you regularly to review and advise you on ways to improve your critical numbers.
As needed we can also provide:
Financial Management Consulting
Our goal is to improve the quality of information you have to make decisions with. Therefore, as part of our work together, there is often a need to conduct specific analysis on different aspects of your businesses and/or develop new information sources and systems to help you run your business more effectively. Our efforts in this area would, of course, be tailored specific to your needs.
Those services might include:
- Activity Based Management/Costing
- Profit Center Analysis
- Product Mix Analysis
- Customer Segmentation Analysis
- Cash Flow Projections and Analysis
- Budgeting and Forecasting
- Employee Compensation Plans
- Succession Planning
- Merger, Acquisition, Joint Venture Planning
- Plus much more. . .
Companies that enroll in our CFO As You Grow program do so for a minimum of one year. In our experience, it takes at least a year of consistent, disciplined effort to achieve long lasting results.
One of the greatest barriers to small business growth lies in owners who can not let go of day-to-day operations for fear things won’t get done right. The CFO As You Grow Program puts “expert” feedback systems and indicators in place so owners can still know what’s going on without having to be intimately involved with every detail of their operation. Much like sitting at the “dashboard” of a car – you won’t have to lift the hood every five minutes to see if the engine is still running right. This program also lays an ideal foundation for more advanced, technology-based management information systems that most growing companies adopt over time.
And finally, having a solid performance-based incentive program can also help attract and retain high quality people to your organization. These systems create a culture of measured accountability for team members and provide a mechanism for rewarding superior performance