The top 5 challenges facing CFOs
Every six months we like to take the pulse of our CFOs and CPAs in BIG (business, industry, government and NFP). A few weeks ago, our B&I Committee hosted a mixed reality (virtual and in-person session) using our ThinkTank collaboration platform and got some great insights.
The top 5 challenges facing CFOs and CPAs in business industry, government, and NFPs are:
- Doing more with less: "We are doing more with less, as we have lost employees over the past year, but none have been replaced."
- Health care / Obamacare / PPACA: "Health care costs, administration, etc. Obamacare is a serious issue for us," said one, "as we are an insurance agency with a health and benefits line of biz. We have no idea how to structure our benefits business to stay profitable."
- Uncertainty: "Uncertainty of economic recovery; uncertainty of business -- can't forecast very far in future; uncertainty of the economic environment and with government budget (or lack thereof), regulation, looming taxes, health care; lots of uncertainty; the government shutdown -- very scary when most of our business is based on the government. It took us for a loop when we had to reschedule multiple projects due to offices being closed."
- Competition and cash flow: "Our parent organization is pulling all our cash, so we are cash-poor and therefore it's hard to execute M&A growth strategy. Organic growth alone is very difficult. Need for leading indicators and KPIs."
- Succession and talent development: "How do you build 'bench strength' in a small- to medium-size enterprise? Hiring qualified people, developing them and planning for succession are all key issues."
Then we asked them, "What's working for you now?" We received these top answers:
- Flexibility: "The ability to be flexible; flexibility to change is needed to succeed in an ever-evolving and competitive world."
- Communication: "Weekly management meetings. Communication is key as everyone is ridiculously busy. Weekly management team meetings are good, but we need to remind people to communicate more outside of the meetings so decisions and projects don't get delayed until the next meeting."
- Transparency and accountability: "Information, and more specifically financial data transparency. We will continue to educate our frontline staff on financial accountability. Frequent communication is mandatory."
- Using data: "Analyzing our consumer behavior to provide the customer with the products and services they desire. We are spending more and more time on our database and it is paying good dividends. We are taking a hard look at all our operations, profitability down to a per-person level, per-product level, analyzing our processes and analyzing our staffing."
- Retaining talent: "Being on the cutting edge of knowing what is key in our industry of benefits and financial services. We're reviewing our benefits as we focus on attracting senior staff."
- Focus on strengths: "Focus on strengths in order to maintain business strength while pursuing newer technologies and research for other ventures. Strength of senior management team."
- Customer focus: "Having the professionals in our organization being on top of their game to always be responsive to our clients. Responsive to internal and external customers."
We flipped that question around and asked them, "How are you innovating?" Here are the top five innovations from our CFOs:
- Staff: "Encourage staff to challenge the norm and offer suggestions for improvement. Asking staff to assist in incrementally improving our products and services. Trying to get the team to think and not just do. I try to encourage my staff to see beyond just the numbers and build an understanding of the overall business. This will help them to better analyze and understand the numbers. It is really necessary to gain the 'soft skills.'"
- Communication: "Using more technology to communicate than just e-mail. Skype within departments cuts down on the e-mails. Integrating entire office staff in weekly meeting to reduce department silos. I meet with my team weekly, not just to discuss technical issues, but also to impart information about operational and other business issues that we face. The idea is to develop younger staff."
- Customer focus: "We are working on being customer focused. What is the customer’s experience when they enter our business? How do they perceive their interactions with our staff? What can we do to improve the experience? Improve processes? Change the customer path? We are spending less time with potential clients who do not seem to be serious about buying services and continuing to stay focused on what is working! We are expanding our services to our clients, packaging some service offerings, improving our sales process to be more automated, and utilizing LinkedIn, Twitter and webinars to get our messages out. We are thinking through how we can leverage existing product line for additional customer acquisition."
- Social media: "Our client-facing team manages social media, but looking to outsource the ability to see more quickly any comments. We respond online and off to customers that provide feedback. We use Facebook and Twitter to communicate with our customers (what's new on our cable programming, where is the utility outage and how long before fixed, what special things we have going on, etc.). We have someone internally designated to respond to and monitor social media."
- Technology: "Using technology to reduce AP data entry. Looking at tools for inventory forecasting and management to save time for our merchandising team and reduce our inventory investment. Reviewing all financial processes for efficiency and identifying how to use technology to improve them."
Our group of CFOs covered a lot of the same ground as the eight top issues for CFOs in 2014 from CFO magazine. The results speak clearly of the need for the CFO to serve as change agent who helps to support growth through innovation along with strategic use of technologies (cloud, mobile, social, business analytics and more).
There is a lot of excitement about our upcoming "Find Your Competitive Edge" series featuring Rita McGrath, the sixth most influential business thinker in the world, via webcasts and live on Jan. 30 at the BWI Hilton Hotel in Maryland. Rita will talk about strategy in uncertain times and cover the latest from her new book, The End of Competitive Advantage. The live session will include a working session on your 2014 competitive edge playbook and a collaboration session to gain insights from the crowd. Details and registration information can be found here.
We have lots of upcoming programs for our CFOs and BIG members. Check the MACPA website for details.