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Tricks of the trade in being an effective CFO

Heartbeat responsibilities have a regular repeating cycle: closing the monthly reporting; updating and reviewing the rolling forecast; keeping on top of the receivables position.  

The CFO will also spend a lot of time on projects, which by definition are more ad-hoc or one-off in nature. These may include acquisitions and ultimately the exit, and also other commercial projects such as major bids, significant capital programmes and systems initiatives.

I find this heartbeat v project model helpful in articulating the challenge of being effective in the demanding and varied role of CFO. If we could focus on just one of these two dimensions, life would be relatively straightforward. The challenge is in managing both to a high standard under pressure and with defined resources.

Critical to maintaining the heartbeat is to have a strong team, in particular a capable Controller, with clear roles and expectations. Even with appropriate delegation to the team, the CFO has a key role in providing direction, in planning and reviewing, and in decision making. Critical to success is to put in place clear schedules that are realistic and to then follow them with discipline.  

Review sessions should be in the calendar, and take place at the same time every week or every month with a standing agenda. Action points should be captured in real time, circulated as soon as possible (same day minimum), and followed up. Time spent on these activities should be blocked out in the calendar well in advance, and protected as much as possible. These sessions should be as short as possible in order to get the job done. With a standing agenda and a structured process, efficiency will tend to improve significantly through the first few cycles.  

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I know this all sounds great in theory. Achieving a disciplined heartbeat cycle is in reality a real challenge in many businesses for CFOs, particularly where the business is changing rapidly or is under extreme pressure. However, the benefits are considerable and worth pursuing even if progress is sometimes slow.          

To achieve this approach certainly needs buy-in from other members of the team beyond finance, including the CEO. They will need to respect that the CFO and particularly the controller have certain time commitments that cannot be easily changed. The reality of course is that flexibility will be needed at times, for example where there is a genuinely critical and urgent business issue but these should be relatively rare in most businesses.

As well as being valuable in itself, this structured approach to the heartbeat is also key to setting the tone and defining a professional way of working for the whole finance function. By contrast, if monthly reviews were to take place in an ad-hoc way when the CFO has 20 minutes available at the end of the reporting deadline day, then this less organised example would inevitably affect the way the finance function operates generally.  

An appropriate degree of structure will give the wider team a sense of control over their own time, improving the quality and therefore the value of their work.

The CFO and his team will at any time be managing and contributing to a portfolio of projects. The usual rules of project management best practice of course apply, and I won’t repeat them here. Keep in mind the 80/20″ rule of thumb, and ensure that objectives are very clear up front in order to avoid wasted effort. Its particularly important to be realistic when planning, and then to not be afraid to flex the plan when reality takes a different course.  

Its far better to address unexpected changes up front than to ignore them, keep the pressure on to achieve the original schedule and inevitably arrive at a crisis when it becomes clear the objective cannot be achieved.

It can be helpful to spend a little time at the start of the week (or the end of the previous week) capturing the top 3-5 items that are concerning you. Write them down, reflect on them, think about why you’re concerned. These will be items (often relating to projects, sometimes heartbeat activities) that need to be addressed or where a change in approach is needed. Schedule a meaningful amount of time (this may be 2-3 hours) as soon as possible to tackle the most important of these -either alone, or more likely with relevant team members. It will always be time well spent.

The CFO faces many challenges, and achieving balance between heartbeat and project activities is one of these, and a critical one to being effective in the role. Neither can be neglected, both need to be successful. There are no easy answers, and the perfect balance is unlikely to ever be achieved. The key is to recognise the challenge, have a conscious strategy to succeed and discipline in applying it and to reflect regularly and remain flexible if changes in approach are needed.

Nick Williams has been a finance leader with private-equity backed, high-growth technology businesses including telematics group Masternaut.


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