The Chief Financial Officer contributes significantly to the strategic planning and execution processes of the organization. Strategy becomes a decision about choices around available resources. Where do you commit the company to go based on the resources that are available? The CFO and their teams help to evaluate key metrics in the development and then execution of the strategy. The CFO must take a strong leadership role in the formulation, analysis, and then execution of the strategy.
Episode outline:
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The Chief Financial Officer contributes significantly to the strategic planning and execution processes of the organization. Strategy becomes a decision about choices around available resources. Where do you commit the company to go based on the resources that are available? The CFO and their teams help to evaluate key metrics in the development and then execution of the strategy. The CFO must take a strong leadership role in the formulation, analysis, and then execution of the strategy.
Episode outline:
Please follow me on:
1. Instagram: stephen.mclain
2. Twitter: smclainiii
3. Facebook: stephenmclainconsultant
4. LinkedIn: stephenjmclainiii
Consider joining The Finance Leader Podcast Community Facebook Group, where we can talk leadership and the other topics I present here on the podcast. https://www.facebook.com/groups/financeleaderpodcast This is a good time to jump in and start sharing ideas and thoughts about leadership so we can help each other.
For more resources, please visit stephenmclain.com. On the website, you can download the Leadership Growth Blueprint for Finance and Accounting Managers. You can use this guide to develop your leadership by focusing on communication, and growing and empowering your team.
You can now purchase a course to help you advance your career from financeleaderacademy.com. It's called Advance Your Finance and Accounting Career: Developing a Promotion Strategy that Sets You Apart.
The chief financial officer contributes significantly to the strategic planning and execution processes of the organization. strategy becomes a decision about choices around available resources. Where do you commit the company to go based on the resources that are available to CFO and their teams how to evaluate key metrics in the development and the execution of the strategy. The CFO must take a strong leadership role in the formulation, analysis, and then execution of the strategy. Please enjoy the episode. Welcome to the finance leader podcast where leadership is bigger than the numbers. I am your host Stephen McLain. This is the podcast for developing leaders in finance and accounting. This is episode number 68. And we'll be talking about how CFOs contribute to strategic business planning. And I'll highlight the following topics. Number one, what is strategy number two, prefer a long term strategy instead of operating in the short term, and three how the CFO adds value to strategy planning and execution. Larry Basa, the author and former CEO of Honeywell said, execution is the ability to mess strategy with reality align people with goals and achieve the promised results. It's November already and the end of the year is coming soon, which means for many of you that you have to turn in completed continuing professional education credits for your certification. In episode 61. I talked about earning CPE and provided several suggestions where you can earn your CPS. So if you're still needing to complete CPE for this year, either for your certification or if your company has a continuing education requirement, get them done quickly so you can stay in compliance. It is your responsibility to know what you have to earn and get the credits turned in on time. It's your responsibility. I also mentioned last week that it's time to work on those 2022 goals. This year is coming to an end rapidly end of the year always does. I will be continually reminding you to think about what you want to accomplish next year. This is a great time to write down, quantify and clarify your goals. What do you want to work on next year. Now update your individual development plan and be ready to get to work coming out of your holiday vacation. I am doing the same exercise and we can work on this together. I know you have end of the year close out but goal setting and goal accomplishment must always be done no matter what. This week, we are talking about how CFOs contribute to strategy planning and execution. I covered the components of strategy in Episode 34. So that's a good episode to accompany this one. As we continue to explore how to prepare for the role of CFO. I know that most of you if not a CFO already have the goal of becoming one in the future. So hopefully this series has provoked you to think about the skills that you need to start developing now, instead of waiting. As you develop your strategic skills, are you able to solve problems across multiple functions, like marketing, operations and human resources? As a few examples, the CFO contributes significantly to the formulation and then execution of the strategy. The finance and accounting teams have the data and insights to help drive a realistic view of how the company can achieve its goals. This is why I encourage finance and accounting team members to partner with leaders around the company to get those additional insights regarding the financial metrics they are responsible for, and why I talked about how the CFO adds value. strategy can often be seen and thought of as a far off and mysterious philosophy. People often ask what strategy means and how you decide upon one. It's actually a methodical and well planned process. And you must be using validated data and some solid planning processes. You have to assemble the right team and identify the correct inputs to evaluate both internally and externally. You must understand the business and economic conditions your organization is dealing with, including knowing exactly who your competition is, which may not be obvious. It comes down to focusing the company's resources onto the right strategy, because strategy is about choices, how to commit the resources you have, combined with the vision to achieve the company's goals. What is the greatest challenge Elon with strategy, its execution, of course, which often comes from a lack of alignment, or not being able to measure progress properly? Did you even define what success looks like? Or maybe there was a failure of thoroughly understanding the business environment? Of course, this depends on what market you are in, and what's your mixture of products and services. But do your due diligence to gain alignment and measure progress effectively, this requires coordination and talking about it. Now, I believe that some brands who have been around for a while probably are earning money and market share, despite what some of the critical functions are doing, meaning that sometimes a product is so identifiable, that even if you believe that you are applying critical insights, but in reality, it will not have much effect. So is this a bad thing or a good thing, it's always great to achieve a brand status where your product is universally sought after, no matter your effort, or your lack of effort the product sells anyway. So it becomes a challenge to not make any mistakes to derail the brand loyalty, I can think of the major soft drink brands and fast food restaurants that fit into this category. So it becomes important that you recognize this reality in your strategy planning. If your company experiences this, please consider following me on Twitter, Facebook, Instagram, and LinkedIn. My usernames, and the links are in this episode show notes. And also please join the Facebook group I have for this podcast community. Thank you. Now let's talk about a few key points about how CFOs contribute to strategy planning and execution. Number one, what is strategy? Strategy is about choices. What are you going to do with the resources you have? Generally, your organization has a limited set of resources, and you have to make the best decision with those resources to accomplish the vision. Additionally, what are your organization's core competencies? And what are your weaknesses? What are we going to offer our customers? Will it be a high end product or service? Or is it going to be something very necessary that is bought every day? Without even a thought behind it? And how is the company going to be structured? And ultimately, how are we going to secure market share? Will we be a low cost provider? Or will we create a brand that no one can do without or somewhere in the middle? More importantly, can the leaders and team members along with other stakeholders become aligned to the strategy. This requires constant and clear communication. And for department and team goals to support it, you must get wide buy in from people across all roles and functions. So we know what we are working for. So we prioritize our effort in that direction. Number two, prefer a long term strategy. Instead of operating in the short term. I do encourage that companies focus on long term growth. instead of the typical short term gains that Wall Street investors are looking for. When you operate in the short term, you are continually pushing and exhausting your resources to match an investor's goal instead of your own. And that is why it's important to match your vision with investors who have the same vision. I know this isn't easy, especially for publicly traded companies, I have seen stories of companies who have publicly stated that we are a long term company. So if you are in our stock for short term gains, please leave our stock. We want investors who see long term growth. So we commit our resources to that. When you commit to long term growth, you're looking at growth targets years from now, instead of just the next three or four quarters. This gives you enough time to evaluate your strategy and don't feel pressure to change a strategy if you have one or two challenging quarters. Number three, how the CFO adds value to strategy planning and execution. I believe that the CFO must become the leader in strategy formulation, alignment, execution and evaluation. The CFO has access to the data and insights that matter. That of course will require coaching and training on your part to determine what is the right data and insights. And this goes back to why it's important for finance and accounting metric owners. to partner with other functional leaders around the company. You must be able to define what success looks like and how we will achieve the strategy. How will you measure progress? Are your targets realistic and continue to use the right data to validate decisions and outcomes? Additionally, the CFO must away and analyze risk with all decisions related to strategy. We must look at changes in the economy and how legal shifts along with social pressures can affect your brand. And what Your company is offering and look to how your competitors are doing. This is why it's important to conduct a SWOT analysis often, to ensure you're analyzing and mitigating risk, do a thorough look at your strengths, weaknesses, opportunities and threats. The CFO must manage investor relations, no matter the focus, or the strategy, you do want to attract investors who share the vision that you have. And you must communicate that continually with them. I have always disliked any short term focus, because what you are really dealing with is impatient people who want big results now, which means you have to constantly commit lots of resources to maintain those numbers. When you build for long term growth, you minimize risk, and you don't over exhaust your resources. This takes leadership and knowing how to influence positive outcomes. This may not always be your decision. Ultimately, it takes a leadership commitment to talk about this. So maybe you have a shift in culture over time with your company. Now for action today, ask yourself, are you strategic enough? Can you see the company as a whole? Can you see and believe in a long term vision? And please think about this. Even if you're able to solve problems in your current role. That doesn't mean that senior leaders are recognized that you have strategic skills? Are you able to communicate vision with the data you have? Can you communicate effectively and influence others to believe in your vision? What is your demeanor? Do you show confidence? Are you committed to excellence? Can you handle a crisis? Are you able to see how your task load supports the execution of the strategy? Or do you get stuck in the details with what is happening today? One of the best ideas I have seen is when you have a significant meeting with the senior executives block time on your calendar prior to the meeting to have a clear mind. So you are not rushing from one event to this very important meeting where you are on display, showing off your skills and confidence. Be ready for these meetings. Have a clearer mind, be rested. Know your data, know your talking points, and speak with clarity and be confident continually be developing your Strategic skills and executive presence. The time is now to build this into your IDP. Work at it and get a coach if you need to. It's critical to your long term goal of becoming a CFO. Now today, I talked about how the CFO contributes to strategy planning and execution and highlighted the following points. Number one, what is strategy number two, prefer a long term strategy instead of operating in the short term. And number three, how the CFO adds value to strategy planning and execution. The role of CFO adds considerable value to the strategy planning process. The CFO along with the finance and accounting teams can provide a more realistic view when considering what choices to make with the resources the organization has. We have the data and the insights to support what is best to achieve the vision. The CFO must take a leadership stance to ensure the proper decisions are made. This takes strong and committed leadership to align with other leaders within the company. I suggest you talk with everyone to continually get alignment on what the company is trying to achieve. I'll leave you with one final thought. Throughout my years of military service, I found planning essential to every mission. You cannot minimize what planning brings to your organization. But you also have to be flexible enough to not get so rigid in the How to the strategy that you overlook some emerging risk like a new competitor, or you don't take on a great opportunity that could grow top line revenue, be committed to the strategy, but be flexible enough in how you achieve that strategy. That is leadership. Next week, I will be talking about CFOs and technology. Please consider joining the Facebook group I have for this podcast. It's called the finance leader podcast community. This is a place where we can help each other to grow and be prepared for the next step in our careers as finance and accounting professionals. The link is in the show notes with this episode. I hope you enjoyed the finance leader podcast. I am dedicated to helping you grow your leadership skills to change your mindset and to clarify your goals so you achieve the role of chief financial officer. You can find this episode wherever you listen to podcasts. Until next time, you can check out more resources that finance leader academy.com and sign up for my weekly updates so you don't miss an episode. And now the leader team and I'll see you next time. Thank you