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Thursday, January 5, 2017

Roadmap for 2017: Driving Business Strategy


Roadmap for 2017: Driving Business Strategy
CFOs are now expected to help drive business strategy for their organization―a tough task in today’s complex marketplace.  Finance leaders at the recent Armanino EVOLUTION conference commented that processes and systems are key elements of an effective roadmap, but that a winning strategy also requires a collaborative and creative finance department.
 
“Whether you can afford the new system or not, whether you can figure out what the process is, whether you can get the product to the customer―all those things are great, but if you can’t work as part of a team…[your] ability to get things done is not going to be nearly as effective,” said Kimberlee Gonzaga-Duval, CFO of consumer product startup Nuvesse Skin Therapies.  This holds true for accountants at any size company, in any industry, she added.

Nuvesse has 13 employees, who have to lay the groundwork for growth in new markets and also keep daily manufacturing operations running smoothly. Because the company is small, employees have had to learn to work with each other and people outside the company, in ways they wouldn’t in a more siloed environment. “We’re much more collaborative these days, and that has definitely changed our business,” said Duval.  “You have to be…otherwise, your roadmap isn’t the worth the paper it’s printed on.”

Investors have higher expectations
Collaboration is also important to today’s investors. Duval said funders are less interested in hearing about the minutiae of a portfolio company’s business, compared to two or three years ago, but that nowadays they want more frequent communication from the CFO.

“They want the pie charts, at a high level… and they want you to have the foresight to know when you are going to hit [forecasts] and not, and to be very communicative about that, as opposed to the ‘asking forgiveness’ way of old,” said Duval. “You really are expected to be much more collaborative on the day-to-day with them, whether it’s an email with an update, or a phone call, or an official board meeting.”

Collaboration produces insights
Better teamwork also leads to better data for the finance team. Drew Waddell, controller at financial services firm Salient Partners, sees collaboration as the key to success for his company’s 2017 roadmap. His main goal? Making sure the accounting team is communicating and working with other areas of the company, such as customer-facing groups, so they can drive insights back up the chain to the CFO. 

“It’s easy to sit there and look at spreadsheets and think about the numbers, but if we’re going to enact change, and it’s going to be successful, we have to make sure that we’re not just thinking about the corporate implications,” said Waddell. “It really is about the people, and making sure we’re talking and communicating well.”

Agility requires creativity
Teamwork isn’t the only attribute that is important for the finance organization to have. Mark Werling, CFO of organic home goods maker Coyuchi, said that the success of his strategic roadmap also depends on his group’s creativity. Business plans can change quickly in today’s hyper-competitive marketplace, so finance teams have to be able to innovate and solve new business challenges.

“Whether it’s how you get to the journal entry or how you do the close, you have to have a lot of ingenuity, and be scrappy and creative,” said Werling. “What may have worked two years ago might be too stale and not providing what you need, so you have to figure out how to flip it on its head.” For example, Coyuchi is now preparing to launch a catalog, something that wasn’t in the company’s five-year plan.

Creativity isn’t just about the accounting team. Finance leaders also have to work with their board and consultants, as well as their customers and key providers, to find new ways to handle challenges.  “Where are they stuck, what’s not working, and how do you get that creative solution that allows everything to flow again?” said Werling.

CFOs are expected to drive strategy
Roadmaps now fall squarely within the realm of the CFO. In addition to overseeing financial statements, today’s finance leaders have to participate in all the areas―including people, processes and technology―that drive business performance.

This broader, strategic outlook has become a standard part of the job description, according to the panel. “If you look at what a successful CFO for our profile of companies was five years ago, what would have been rock star status is now the minimum expected performance level,” said Werling.

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