Putting The Concepts Into Practice

This is a continuation of  the previous blog

So...we want to develop a comprehensive set of requirements. Drawing on the expertise of the office of the CFO, along with  other C-suite executives and input from subject experts within or external to the organization, this list should delineate the preferred state (“best practice”, if you will) of every policy, process and analysis that provides the underpinning of the organization’s fiscal health and supports strategic direction.

I can't overemphasize the importance of collaboration, both vertically and horizontally, in this process. A January 6, 2010 Healthcare Financial Management Association report – “Hospital Strategies for Effective Performance Management”, in discussing the structure that best supports improvement efforts, points out “…performance typically is strongest when authority is decentralized and those developing strategy as well as those responsible for implementing strategy work together to formulate plans for growth and solutions to performance issues.”


Delineate the items, and evaluate both their acceptability within your organization and status of their completion. Priorities can than be identified, responsibilities assigned and timetables for completion projected. The finished product will be shared with all appropriate parties. With buy-in from all internal constituencies, you will have a living, dynamic document that can guide the collective effort.

A Proposed Model
If all of this sounds a bit vague or too all-encompassing, perhaps a visualization of the model will serve to clarify. While other models may work equally well, I'll describe a multi-tab spreadsheet that I'm familiar with.

• Each spreadsheet tab relates to a particular function, for example Controllership, Capital Structure, Quality, Strategic Transactions, IT, Risk Management and so forth. While such categories are universal, your organization’s particular situation may dictate additional components. If your organization is financially distressed  for instance, there may be a Turnaround tab.

• List on each tab the one-line sub-function tasks. Let’s look at the IT function. If, as it should be, your objectives are to link IT strategy to organizational strategies and to leverage your IT budget, sample one-liners might include:

o Analyze current state of financial processes and potential to rationalize, scale and automate them
o Verify the fit between improved financial systems and the company’s infrastructure, to ensure that improvements
o Ensure that adequate training is provided and financial systems are integrated with business processes, and so on...

• Having obtained input for these tasks from a wide cross-section of the organization, the draft document can be reviewed, edited, pared down and rearranged as deemed appropriate by the document owner (I suggest that be the CFO). Following this process, each contributor should be given an opportunity to review their section(s) of the draft, and be requested to sign-off.

Facilitate Accountability

• Priorities, responsibilities and timetables must be assigned. The manager with oversight of each function should take the first shot at this. The CFO should then meet with those managers to review, debate and negotiate the final draft. Then, review with the CEO and the rest of the senior management team, for buy-in.
Tune in next time, for a view on how to effectively deploy the model, to strenghten your organization by, in part, linking it to performance drivers.

And, again, what I've described is just one model.  I would be interested in other models you may have seen or be working with in your organization.