CFO Leadership

Worldwide, businesses are recognizing the power of green. With the social and economic impacts of climate change impossible to ignore, more and more companies are starting to introduce sustainable business practices. And they’re realizing they aren’t just great for the environment—they’re just as good for business too.  According to a report from the Business & Sustainable Development Commission, investing in green business practices will open up $12 trillion worth of cost savings and market opportunities across the global economy by 2030. To remain competitive, the report adds, “businesses need to pursue social and environmental sustainability as avidly as they pursue market share and shareholder value.” And who better to champion those investments than the CFO? Top-performing CFOs are constantly measuring the drivers of growth and revenue for their organizations, and sustainable practices have a big role to play when it comes to long-term profitability. Still not sure? Consider these three reasons why your CFO should embrace sustainability and lead your company into becoming more green: 1. It’s Important To Your Investors, Customers and Staff Aside from the more obvious cost savings associated with sustainable business practices—reduced energy and water bills, for example—CFOs are being driven toward green initiatives because that’s what the markets, and their customers, are demanding. And those outside demands are matched by the concerns of internal influencers like investors and employees, who have their own reasons for hoping to see more sustainable practices in action.  Investors: We know that CFOs are accountable to their company’s shareholders, who have certain expectations about corporate governance and long-term financial performance. And according to the 2017 EY Investor Survey, 89% of investors believe that generating returns over time requires a sharper focus on environmental and social factors. This places further pressure on CFOs to weave sustainability into their investor relations narrative. Companies that miss the mark will have a harder time navigating capital markets successfully compared to their eco-friendly counterparts. Customers: A 2017 study showed that 63% of Americans hoped to see businesses take the lead in driving social and environmental change. And now more than ever, consumers are putting their money where their values are, which means that companies that don’t live up to those values will see their market share decline. One study suggests that consumers are even willing to pay a premium for products that are environmentally friendly, which makes a clear business case for CFOs to make sustainability a top priority. Employees: Sustainability and corporate social responsibility can help attract top talent and keep employees more engaged. People want to work for companies that exemplify their core values, and sustainability is a value that’s given a lot of attention today. One survey showed that more than 70% of respondents would be more likely to work for a company with a strong environmental agenda, and almost half would even take a smaller salary to do so. Research also suggests that companies prioritizing sustainability experience reduced turnover, which can have a significant impact on the bottom line over time. 2. It Can Be Key to Your Company’s Strategic Plan CFOs today are strategic partners and trusted financial advisors across every function of the business. And as drivers of corporate strategy, CFOs have unique insight into the “big picture,” as well as the performance of individual business units—which means they’re well positioned to identify areas in which sustainability can drive value and align positively with strategic goals.  But in order for sustainability initiatives to stick, they need to be firmly entrenched in the company’s strategic plan and receive the necessary financial support. For a real-world example, consider this case study from retail giant Walmart. The company wanted to use digital technology to double its fleet efficiency between 2005 and 2015 through improved routing, loading and driver training programs. By 2014, they’d improved fuel efficiency by 87%, which resulted in 15,000 tonnes of avoided CO2 emissions and nearly $11 million in savings. In order to ensure the viability of such a significant strategic project, the CFO would have had to identify the potential value, perform a cost-benefit analysis and approve the necessary investments to make that goal a reality. After all, CFOs are still the overseers of company expenditures—and while some sustainability initiatives require less upfront investment than others, most will have costs associated with them. After considering financial factors like net present value (NPV), breakeven and ROI—as well as strategic, non-financial factors like customer experience, community impact and engagement—it’s ultimately up to CFOs to decide which of those sustainability projects are worth pursuing for their organizations. 3. It Requires the Kind of Real-Time Data CFOs Already Track According to a 2014 report from Deloitte, finance leaders cite slow payback and unquantifiable benefits as the top two factors holding back their investments in sustainability. In order for companies to take advantage of the many benefits associated with sustainable business practices, the value of these initiatives needs to be clearly and effectively communicated. That’s where reliable, forward-looking data comes into play. And while all corporate executives today leverage data to guide their decision making, especially when it comes to long-term strategic initiatives like improving sustainability, gauging the impact of green initiatives requires the most up-to-date data available—both financial and non-financial. That’s a job best-suited for the CFO. With the right tools at their disposal, CFOs can arm themselves with the ability to quickly consolidate company-wide data and perform forward-thinking analysis with forecasts, models and dashboards, ultimately identifying opportunities for strategic investments in sustainability. They can also track the impact of sustainability projects in real time, and use that information to guide their decisions moving forward. How to Champion Sustainable Business Practices in Finance The journey toward sustainable business practices does not happen overnight, and some companies are a lot further ahead than others. For CFOs and finance leaders looking to champion sustainability at their organizations, here are a few key tips to consider: Create a clear reporting framework for sustainability factors like water and energy use, employee transportation habits, paper purchases, supply chain policies, etc., and develop financial models that can help you make sense of these metrics and what they mean. Identify short- and long-term sustainability goals and put a plan in place to achieve them. Examples of this could be eliminating single-use plastics in the workplace, or investing in efficiency programs to ultimately reduce long-term energy costs. Make sure that internal stakeholders are on board with your policies and that they’re made aware of how their activities are impacting your sustainability efforts. Hold them accountable to a defined set of sustainability objectives through open, honest communication. Communicate your sustainability achievements to your customers and prospects. This will further enhance your brand’s reputation in the marketplace. Don’t get complacent, because chances are there’s always more you could be doing to reduce your company’s environmental impact. At the end of the day, there’s still a lot of work to be done before the global economic model can be considered truly sustainable. But with the right green policies, procedures and business drivers in place—ultimately steered by the strategic office of finance—modern businesses can make a lasting impact on the world while continuing to move their business goals forward. Discover how you can leverage agile planning to drive your company’s sustainability initiatives for today and tomorrow.

When we announced Vena Nation week last month, we made a promise to deliver a free, all access virtual learning and conference experience that would bring industry experts and thought leaders together for insightful, meaningful discussions. That’s why we’ve assembled a world-class lineup of keynote speakers to help business leaders and finance and operations professionals plan for today and tomorrow—on top of all the CPE-accredited training sessions, one-on-one coaching meetings and peer-led panel discussions that Vena Nation week has to offer. Starting May 12, tune in to Vena Nation week to learn something new from every one of them. Ryan Patel A renowned expert on scaling businesses for success through digital transformation Keynote Title: How to Navigate Uncertain Times Date: May 12, 2020 at 12 PM ET Ryan Patel is a trusted authority on global business, political economy and planning for long-term growth. An expert on scaling companies and driving cross-functional collaboration, Patel found success as VP of Global Development at the frozen yogurt chain Pinkberry, where he transformed the company into an international powerhouse between 2011 and 2016. Since then, Patel has served in executive, advisory and board member roles for several companies across all areas of business. He’s currently a Senior Fellow and Board Director with the Drucker School of Management at Claremont Graduate University. He’s also a frequent contributor to a number of acclaimed business networks and publications, including CNN, BBC, CNBC, Fox Business, The Hill, TD Ameritrade Network and more. When it comes to strategic growth initiatives, Patel is one of the business world’s leading voices. In his Vena Nation week keynote, he’ll discuss his predictions and outlook on the economy—and also provide some guidance for navigating the road ahead.   Jack McCullough President and founder of the CFO Leadership Council, author of Secrets of Rockstar CFOs Keynote Title: Secrets of Rockstar CFOs Date: May 13, 2020 at 11 AM ET Jack McCullough is a widely recognized thought leader and ambassador for the CFO community. Over the course of his career, he’s served as CFO at 26 different startups and raised more than $200 million in capital. In 2006, McCullough founded the CFO Leadership Council, a professional organization that’s dedicated to supporting and empowering senior finance executives through community, education and career development initiatives. He’s also founder and chair of the MIT Sloan CFO Summit. In October 2019, McCullough published his first book, Secrets of Rockstar CFOs. The book is based on the insightful conversations he’s had with more than 40 elite CFOs—from Silicon Valley startups to Fortune 500 multinationals—providing readers with a roadmap for excellence in the CFO role. He is frequently quoted in the press for his insights on financial leadership. Of all his professional achievements, McCullough considers his role as a mentor to be the most fulfilling. During his Vena Nation week keynote, he’ll discuss what he’s learned from high-performing CFOs and share what they do differently, revealing their secrets to success.   Alex Banayan Author of the #1 international bestseller, The Third Door Keynote Title: A New Mindset Date: May 14, 2020 at 11 AM ET Alex Banayan is the youngest bestselling business author in American history. When he was just 18 years old, Banayan ventured out of his college dorm room and embarked on a seven-year mission with one goal in mind: uncovering the success stories behind some of the world’s most influential people. Over the course of his journey, Banayan sat down with icons like Bill Gates, Steven Spielberg, Warren Buffett, Steve Wozniak, Jessica Alba, Quincy Jones and many more. He learned that the path to greatness in life is never linear and that successful business people never take the easy route. He chronicled his findings in his book, The Third Door, which was released in 2018.  Now an acclaimed speaker, Banayan shares his unique framework for success with corporate leaders around the world. His keynote at Vena Nation week will reveal what he’s learned from some of the world’s most successful business leaders about the skills needed to maintain a growth mindset even in the most uncertain times. Join Us for Vena Nation Week, Starting May 12 Agile business planning is more important than ever, and these keynote speakers—along with all the other industry experts and thought leaders who will be coming together during Vena Nation week—will provide a variety of perspectives that will help you plan for today and tomorrow with confidence. Join us online starting Tuesday, May 12 at 11 am ET to learn, train, discover and earn CPE credits at the same time. Get your All-Access pass to Vena Nation week today for insights from Ryan, Jack, Alex and other industry experts and thought leaders. You’ll also have access to CPE-accredited training sessions, peer-led panel discussions and other helpful resources to help you plan confidently for today and tomorrow.

The CFO’s job is much more multifaceted than it used to be.  Today’s CFOs aren’t just overseeing the bottom line and day-to-day financial processes. They’re also acting as strategic advisors for the overall business, leading cross-functional teams, driving cross-company transformation and contributing to revenue growth. And that means there’s more demand for their time than ever. According to the bi-annual McKinsey Global Survey of the CFO’s role, the number of business functions reporting up to CFOs has risen from four to upwards of six. Their responsibilities now include everything from corporate strategy to regulatory compliance to mergers and acquisitions (M&A) transactions to risk management. Plus, they’re overseeing digital activities like business process automation, cloud computing, data visualization and advanced analytics.  The time has never been better for CFOs to recharge and re-evaluate how they can approach their evolving roles. A good place to start is by assessing how they can free up some much-needed time by streamlining traditional finance processes.  This blog will look at four time-saving initiatives that CFOs should apply to help them better manage their expanding organizational remit. 1. No more duplicate spreadsheets—consolidate data into a single source of truth When it comes to the CFO’s ever-expanding role, data sourced from digital technologies is giving them an even more strategic seat at the corporate table—they are the only member of the C-suite to have a direct line to their fellow executives. However, working with data owned by different people across multiple departments is a fundamental challenge for their finance departments. The presence of rogue duplicate spreadsheets—as well as the inability to trace data inputs and edits back to their original  sources—can create data chaos and a lack of version control. To deliver accurate reports and drive impactful corporate decision-making, CFOs should look to consolidate data in a centralized platform so it’s trackable, and so their teams don’t have to spend valuable time hunting down and consolidating data across disparate sources.  Collecting data across multiple sources is not only tedious, but it also leaves finance teams with little time to analyze the numbers and apply valuable insights. On top of that, the difficulties associated with extracting data from legacy enterprise resource planning (ERP) platforms often result in long wait-times for reports, which quickly become outdated. And when data is old and tools are hard to use, business teams grow reluctant to participate in budgets and planning. But with ready access to the right data in the right place, CFOs can quickly uncover valuable insights and effectively surface the stories that the data is showing them to the rest of the C-suite. And by leveraging a single, accurate, and timely version of the truth, both finance and non-finance teams (like marketing and sales) can make strategic, well-informed business decisions.  2. Work smarter with FP&A software According to Gartner’s Top Priorities for Finance Leaders in 2020 report, CFOs plan on driving growth in 2020 through business transformation and by finding efficiencies—like improving the speed and accuracy of operational processes. In particular, they’ll look to optimize financial analytics, re-think organizational strategy and structure, and re-evaluate the technology platforms they’re using. To that end, implementing FP&A technology is one way they can look to streamline key finance processes like data consolidation while galvanizing the way the  finance function works.  Instead of manually collecting, validating and manipulating financial data in Excel, FP&A software allows finance teams to integrate, aggregate, and automate data consolidation across all source systems. It saves them valuable time for financial analysis by eliminating the need to work back-and-forth between various applications and spreadsheet templates. “When routine tasks can be automated and new data insights generated from connected processes, finance teams can be unleashed to focus on what matters most: identifying where the next growth markets are and how to capitalize on them,” explained Oracle CFO Safra Catz in a recent Forbes article. By using FP&A software to integrate spreadsheets, information sources and processes, finance executives can also enable their teams to work more effectively with departments across the organization, sharing the most up-to-date data and reliable narratives so they can drive better decision-making and help guide their organizations through economic uncertainty. 3. Find FP&A technology that moves the corporate needle Finding the right FP&A tool isn’t easy—there is a wide variety of choices out there. But for CFOs who want a solution that will help improve performance across their teams as well as other departments, there are three key features to look for when evaluating FP&A software.   Automation will be crucial when it comes to shaping how CFOs will manage and drive value while keeping up with company growth. For CFOs and their teams, automating tedious manual tasks like gathering, filtering, manipulating, and distributing data with spreadsheets represents a real opportunity to spend more time on strategic initiatives like analyzing data, forecasting trends, supporting corporate decisions, planning future projects and driving cross-organizational efficiency. And when it comes to data analysis, data visualization and reporting capabilities will be an especially important feature for CFOs to have in an FP&A solution. Access to more sophisticated dashboards can help them derive insights for better planning, budgeting and forecasting while driving better decision-making across the organization with more detailed, data-driven storytelling. And in order to ensure transparency, they should look for a platform that makes these finance dashboards accessible to the entire company. Finally, a cloud-based solution will offer CFOs multiple benefits for their finance teams as well as the organization as a whole. Not only would a cloud-based solution offer dynamic flexibility and instantaneous access to the latest FP&A features, it would also allow different departments to connect existing templates and models to a database, creating an effective bridge between finance and operations through real-time data collection.       If you want to see a more in-depth analysis of trends and vendors in the FP&A marketplace, read the 2019 BPM Vendor Landscape Matrix and find out why Vena continues to lead the pack.  4. Make the most out of Excel spreadsheets for finance Gartner’s report also revealed that 76% of CFOs reported lackluster ROI from FP&A technology platforms, citing long implementations, slow user adoption, and over-reliance on IT support. This is where working within a familiar environment like Excel can make a real difference for finance teams and other business functions.  According to BPM Partners, 82% of companies use offline spreadsheets to supplement their core FP&A systems. But, by leveraging Excel’s interface in a secure, cloud-based environment, teams can save time because they won’t have to learn new software, and they’ll be more inclined to continue using a tool that they already know and love. Plus, presenting data in a user-friendly format enables teams to be more self-sufficient. So, something CFOs should be evaluating in 2020 are solutions that allow their finance teams to work within the familiar Excel environment without having to slog through a sea of disparate spreadsheets. Plus, the capabilities of Excel-based FP&A platforms are now sophisticated enough to offer quick and easy visibility into cross-organizational performance with advanced automation, integration, and visualization for budgeting, forecasting, reporting, consolidation and analytics.  If you want to learn more about the kind of difference-maker Excel can be, read our free eBook “Excel for the Win.” It includes some great tips on how you can turn Excel into a powerful tool for finance, as well as insights from finance leaders on how their teams are using it to improve performance.  Embracing the role of strategic CFO CFOs were time-strapped in 2019. According to Gartner, only 22% of CFOs were personally effective last year. The study concluded that the reason was largely because most CFOs were overinvested in finance tasks. This will only become more challenging in 2020 and beyond as their roles continue to expand outside of their traditional remit. But by sticking to the four resolutions discussed in this blog, CFOs can streamline key finance processes across their organizations, ultimately saving themselves some much-needed time so they can focus on meeting the demands of their expanding roles and adding strategic value. Request a demo today to find how you can use Vena’s cloud-based platform to automate tedious processes and cut cycle times by 75% so you can spend more time focusing on driving better planning and decision-making across your entire organization. 

There’s no point investing in enterprise software that staff avoid like the plague. An inside look at the evolution of UX to ‘employee-centered’ design There are times when people just give up. Anyone old enough to remember the days of VCRs will probably also remember the flashing “12:00” of the clocks parents never figured out how to set. Sometimes furniture ends up gathering dust in a corner because it proves so confounding to assemble. Governments and large bureaucracies are notorious for requiring a dizzying mass of paperwork to get everything from passports to marriage licenses. CFOs can’t afford to let people give up on FP&A software, however. In fact, recent research shows it’s too vital to their organization — including a lot of people outside of finance. According to a survey from Grant Thornton and CFO Research, for example, 42% of finance leaders said they were using advanced or automated tools for budgeting and forecasting. Perhaps even more significant, when asked if they would be using such applications within two years, the number skyrocketed to 90%. The report’s authors suggested this would prompt a great deal more internal collaboration: CFOs have the broadest visibility into their organization’s data infrastructure, [so they] will own the responsibility of data more broadly. Doing so will require CFOs to get more involved in the entire organization and bring the strength of the enterprise to the table. Grant Thornton & CFO Research If the tools those in finance (or those working with finance) are too challenging or difficult to operate, of course, CFOs and their teams won’t be able to achieve any of their goals. Even if they’ve managed to educate themselves in areas like sales, marketing or IT, though, few if any CFOs have likely gotten any formal training in user experience (UX) design. At first, areas like UX design and usability can seem all too subjective. After all, most tools become easier to master the longer you use them, right? The problem is that in some cases, a failure to get enough people adopting new technologies at the outset will limit the impact they can have, jeopardizing or diminishing the expected return on investment (ROI) that helped justify the purchase. Enter the Five Es According to Whitney Quesenbery, a UX designer based in High Bridge, N.J., usability may be best determined by how well CFOs and other decision-makers think through why people will use a product, and what kind of feedback they collect. Of course, feedback can be all over the map, too, so she breaks it down into what she calls the five “Es” of usability, which are efficient, effective, engaging, error tolerant and easy to learn. “Interfaces can be evaluated against the combination of these characteristics, which best describe the user’s requirements for success and satisfaction,” she suggests. Usability should also go beyond first impressions, or the initial phase of adoption. Given that many tools, including FP&A software, might be implemented to help achieve some long-term goals, you have to think about ease of use more holistically. Take it from Paul Riegel, regional director of The CFO Centre, who commented on the subject in a recent article on Accounting Today: “Ease of use and robustness means that the tool can handle any type of business transaction or support any reporting functionality, one in which system upgrades don't put an undue burden on the organizations. You also want systems that have a good user track record.” Paul Riegel, The CFO Centre The Rise of Employee-centered Design Speaking of “users,” it might be best to stop using that term when we talk about usability and recognize your software’s end users for who they are: business consumers. Given how digital technologies have changed so many jobs, departments and entire industries, there has been a growing realization within the software community and beyond that the tools we use need to be not only easy, but enjoyable and compelling enough that we want to come back to them. This thinking is at the heart of what’s becoming known as employee-centered design, which was recently explored in a feature on CMSWire. While CFOs and other finance professionals are often measurement-focused, the author recommended not relying on numbers alone to gauge whether ease of use has been optimized. “You may not be able to fully quantify simplicity or usability. Yes, you can count “clicks and ticks” — the number of steps and the time it takes to complete business processes — but don’t discount the value of qualitative input,” the article said. “Your employees will ultimately be the ones using the software, so invite them to participate in vendor demos. Intuitively, they will quickly identify the software tools they would enjoy using.” CMS Wire Usability, in other words, is not just a matter of making your best guess when you choose a product. It’s about opening a conversation early on with every kind of user – or business consumer – who’ll engage with a new application, and keeping that dialogue going long the software is put into practice. This approach will almost certainly lead to quicker adoption, and higher praise for software than the fact that it’s merely “usable” — ease of use is what often makes the best tools essential.

This CFO Insights interview originally appeared in Forbes. Vena CFO Darrell Cox explores how leading finance teams are built on a combination of knowledge, technical, analytical…and story-telling skills By Jeff Thomson English and finance appear to exist on different planes, with one deeply rooted in language and the other, numbers. For CFO of Vena Solutions, Darrell Cox, however, the two couldn’t be more closely associated. In fact, according to Darrell, the most important thing a CFO can do is tell a story. This month I connected with him to learn more about his unique finance perspective, the importance of financial storytelling, and the company’s 2018 goals. Jeff Thomson: You call yourself the company’s Chief Storyteller. How have your studies in English helped shape your view of finance? In what ways do you tell stories? Darrell Cox: A company is like a character in a book, going through its own set of life-changing experiences. Part of my role is to pitch Vena’s story to potential new investors. The idea is to engage them in the story of our business’ development, showing its full potential and how they can play a role in realizing it. I also “write” regular narratives for current investors and managers, keeping them engaged in Vena objectives, how we are performing relative to those objectives and why. And if I tell the story right, I can have a major influence on what our central character, Vena, can become – from its investment potential to the company’s product roadmap. Thomson: What influenced your decision to pursue a career in finance? Does your educational background in English change the way you think of staffing your own finance team? Or do you draw from your prior finance experience when hiring? Cox: I am interested in the story behind the numbers and can do middle-school math, so a career in finance was natural for me. My appreciation of language and a great story is what distinguishes me in my finance leadership role and what I’m able to accomplish in it. A finance team is built on a combination of knowledge, technical, analytical and story-telling skills and experience. A key indicator of a great finance team lies in its ability to tell a complete and character-driven story about its business – present, past and future. It’s absolutely a team effort. Thomson: How can CFOs leverage their grasp of data and analytics to have a larger share of voice when it comes to strategic operational business decisions? Cox: CFOs need to look forward, towards the many possible outcomes for their business, in order to be most effective in their operational roles. This means looking beyond what happened over a quarter to investigate the story behind it and consider what it means for the future. It’s in this area where we as finance leaders can deliver true business insights. In other words, it means using the finance role to turn insights into foresight, conjure up different versions of the future and share potential scenarios for the business. Being able to do so maximizes the value CFOs are able to bring by telling these stories behind the numbers. Thomson: In your CFO’s Perspective piece, Integrated Planning & Corporate Performance Transformation, you discuss integrated planning for performance transformation to support better business decisions and drive action. In the past, this has fallen outside a CFO’s purview, but how do you take your skills as a CFO and maximize collaboration and reach true performance transformation? In doing so, how critical is it to facilitate these efforts by combining the financial and non-financial aspects of business? Cox: It’s very hard to win and hold someone’s attention in a conversation if you don’t have something interesting to say. For CFOs that means going beyond pure financial data. How else can you convince a business leader to drive change? A far more compelling narrative links data from various sources to deliver a story that commands attention. It’s not enough to say we spent more on sales than we budgeted. It’s more compelling to say instead that you combined sales, marketing financial and other data to prove you spent more overall, but that unit profitability is much better in one channel than another. Now you’re sharing a larger story that sparks a discussion on more efficient allocation of resources. It’s my aim to encourage this storytelling power among my fellow department heads to maximize their revenue and growth potential. Thomson: You have an extensive client list across multiple industries. Are there new and/or untapped markets you’re aiming to penetrate in 2018 and beyond? As CFO, how are you positioning the company for growth? Cox: Vena is well positioned for growth. Our core markets are budgeting, planning, reporting and month-end close, and they remain largely untapped. An overwhelming majority of companies rely on Excel spreadsheets, or performance management solutions that try to – but fall very short of – replacing Excel with custom, hard to use software. A vital part of Vena’s story is the reality that companies almost always go back to using the tools they know and love, in this case Excel, especially when it comes to performing tasks that matter most: analysis, scenario planning, reporting and more. I remain excited about being the only company to bring all these data into one place, while embracing the familiarity and flexibility of Excel as the interface. Our new revenue performance management (RPM) product will help companies understand and act on their most important revenue drivers. As I’ve done manually with a mash-up of separate technologies in the past, RPM now let’s executives and finance departments draw insights from Salesforce.com, NetSuite, Google Analytics and other sources to deliver more predictable revenue forecasts and inform better business planning. This is the next chapter of Vena’s evolving story as a business.

If you want to evolve from corporate performance management to true performance transformation – where data-driven decisions help organizations make radical changes providing value internally and to their customers – you’ve got to get serious about integrated planning. For me, a great example came one holiday season when I was working for a phone company struggling to get the right devices into the right customers’ hands. This was the problem in a nutshell: We could have phones in a thousand retail outlets but if we didn’t have the right phones in the right locations at the right time, we would lose sales before Christmas – and after Christmas we’d have an ugly inventory write-off. Ideally, we would send a mix of phones to match the demand of individual stores, with the aim of selling out at midnight on Christmas Eve across the entire channel. Reality was that some phones would wind up stranded in the wrong retail location, while the same phones would be sold out in other stores despite strong overall demand in the days or even weeks before Christmas. We would often find out only when it was too late to do anything but book a write-off. How Can Finance Help Sell More Phones? Our finance department had already gone down the path of hiring our own IT person to build a data warehouse to collect financial and billing system information to analyze and forecast sales and revenue (a step we wouldn’t need to take today thanks to readily available technologies). We used that data warehouse to support a collaborative sales and inventory forecasting process, where our retail partners could enter store-level sales and inventory information electronically or send us PDFs that we would key in ourselves. We then used this information to assess inventory and predict requirements across the channel, and then courier devices between stores to proactively adjust inventory for anticipated demand. The result? A significantly lower inventory write-off, a happier retail distribution channel and more happy customers. We coupled a basic finance planning tool with our forecasting knowhow and turned that into a cross-functional, integrated planning process using non-financial data to drive better business decisions – and results. This is where corporate performance transformation really begins. Before we go any further, let’s step back for a minute to look at why finance is in a great position to lead this approach, and why there’s never been a better time to get started. Integrated Planning Comes of Age Integrated planning is “planning with everyone involved.” It’s department leaders, the senior executive team and more – a 100 per cent collaborative approach. On the data side, it means drawing on sources outside of the general ledger and beyond financial data (or what’s presumed to be financial data). Examples include inventory units, unit sales data, customer profiles, product usage and sales funnel data. Finance teams already track and analyze financial data to help make business decisions. It’s only natural that we should go one step further and present the financial numbers in context with non-financial data. It makes for a richer and more complete story. This kind of data can add real value supporting better business decisions and driving action. At Vena, we’ve worked with tons of CFOs who have demonstrated they’re all about supporting data-driven decisions and driving action through just such an approach. This means doing things that might have once seemed way outside the CFO’s purview — like the time I led a finance department that developed a database of marketing funnel metrics such as leads, conversion rates, lead development, win rates, and so on. It wasn’t about controlling spending and costs. It was about collaborating with the marketing team to allocate limited marketing dollars to the most cost-effective lead channels for maximum growth. Rather than just reporting on costs, we used the data to help marketing drive more revenue, and we used the same data to do our own forecasting of revenues, sales customer acquisition costs and cash flow. Technology has created an over-abundance of data. It’s opened up a great window and provided insights into our businesses that we never had access to before. The sheer quantity of data can seem overwhelming. There was a time when finance technologies struggled with correlating large amounts of data, and real business insights were difficult and expensive to uncover. Imagine slicing and dicing a year’s worth of Google Analytics data across thousands of keywords data using only sixty-five thousand rows. The most modern software-as-a-service (SaaS) platforms have eliminated such limitations and enabled us to uncover, learn and inform business decisions with our data and analysis. An integrated planning approach is imperative to maximize the effectiveness of this analysis and its benefits across an organization. It’s up to us as financial leaders to make it happen by getting the senior executive team on board and putting today’s technologies to work using a collaborative approach. Picking (and Acting Upon) the Right KPIs Performance transformation can be facilitated and enabled by maximizing collaboration opportunities and combining financial and non-financial data. The challenge is figuring out what data to analyze, and how. This will vary a lot based on what kind of business you’re in and what’s important to you. For a grocery merchant, the business drivers might be inventory movement and the impact of perishable goods — your entire process could be thrown off by a bad bunch of lettuce. In a mining company, basic financials can tell you how much the company has spent digging a hole, but if there isn’t any gold in that hole, what is it really worth? Your goal as a transformative finance leader is to identify your most important business levers, how to measure and use them to inform impactful business decisions on a timely basis. “Your goal as a transformative finance leader is to identify your most important business levers…and use them to inform impactful business decisions.” It’s also about aligning with the organization’s core objectives. For startups, profitability may not be as important as growth. For Fortune 500 firms who need to return dividends to their shareholders, growth may not be as important as profit. They may share the same metrics, but their KPIs might each have a completely different level of value. In my current role at Vena, we’re obsessed with coupling financial and non-financial data that comprise our customer unit economics. Our financial statements tell us how much we are spending on sales and marketing. But it’s our unit economics that tell us if we should spend more or less…and tell our investors that they’ve backed the right company. Looking at unit economics can help turn a bad story into a good one. For example, if we overspent on marketing relative to budget, on its own this might not look so good. But shown in the context of how many leads that marketing spend generated, we might be doing better than plan on a unit basis (and that’s a good thing). Leading Your Organization to Performance Transformation Another and arguably the most significant challenge in implementing integrated planning is building collaboration. Teamwork and successful collaboration requires trust and patience. This is especially hard for finance organizations that historically have not been expected to look forward, support real-time business decisions or really collaborate at all. Many times finance is viewed primarily as a critic, a barrier, a group that is focused entirely on minimizing risk and spend. Some still see finance as a group whose best work gets printed once a month and filed-away in binders never to be seen again. It can take time to transform the perception of finance into one of being an enabler, a group that is encouraging and proactively seeks to drive positive results. The group that sifts through data like tea leaves looking for insights and making forward looking predictions. When it’s done well, integrated planning can greatly assist in making this perception transformation a reality. “You will know you’re on the right track when you start to get called on more often for your input into strategic business decisions.” My advice is to start slowly with a few small wins and remember to: •    Add value – don’t try to impose or direct adoption •    Be positive and be patient – it’s an iterative process •    Don’t start aiming for perfection – aim for something good You will know you are on the right track when you start to get called on more often for your input into strategic business decisions – when your integrated planning approach gets the buy-in it needs to succeed. Cultivating this buy-in requires time, nurturing, meaningful collaboration and continuous refinement, which is why it needs to involve people from multiple departments and data from multiple sources. And don’t forget that more iterations lead to more accuracy, which leads to more confidence in plans and planning capability. In my earlier example of building a database of marketing funnel metrics, I knew I was successful when marketing was sitting in the finance department every other day fooling around with their data at our desks. At that point we also saw the accuracy of our own sales and revenue forecasting greatly improved. The Corporate Performance Transformation Payoff Like most CFOs, I’m results-oriented, and being transformative involves being alert to all the direct and indirect results that indicate you and your team are on the right path. In my earlier marketing example, we knew we were on track when we saw finance helping its colleagues in marketing make better decisions to reduce customer acquisition costs (CAC). That meant the company could do more with the same amount of money, and made sure it spent its marketing dollars in the right place – from pay-per-click advertising to public relations. Integrated planning doesn’t mean finance taking over the marketing function, but recognizing that all of us should share the same goal of driving organizational success. Going from integrated planning to performance transformation is about finding the story in the numbers through analysis. Telling that story includes the descriptive – where you’ve been as a company – and the diagnostic — where you are and why. Making that story transformative happens when you start to get predictive – where you’re going, the levers that control company direction, and how to adjust those levers to get the company to where it needs to be. Performance transformation can drive a major culture shift in an organization. With strong collaboration and a powerful combination of financial and non-financial data, finance can lead performance transformation by informing and driving results that could be an order of magnitude greater than keeping to a straight line or within a repeating pattern. Put another way, you can continue to report sales and marketing spend relative to budget. You can aim to cut sales and marketing spend. Or…you could double your sales. What gets me excited is maximizing my contribution through data and analysis. I don’t want to be the guy cutting down trees and printing financial statements that go straight into well-ordered black binders. I want my numbers to live out loud, to tell an impactful story, one that motivates and drives performance transformation across my organization. As the CFO, I firmly believe I’m in the best position to do this. And I’m thrilled to see more and more of my peers striving to do the same.

You’d be hard pressed to find a CFO today who doesn’t consider themselves strategic but – as with most things – that’s a relative term. The amount of time CFOs actually spend on strategic initiatives spans a wide spectrum. At one end of the spectrum are what we call traditional or operational CFOs who see their role primarily as getting the numbers right and reported in a timely manner. At the other end are modern or strategic CFOs, who spend their time informing business-wide, strategic decisions, on equal footing with their colleagues in the C-suite. More than just a qualifier of a finance leader’s role, how strategic a CFO is has implications on the success of their departments, and even their organizations as a whole. In my experience, companies with modern, strategic CFOs tend to: •    Look at CFOs and their finance departments as true partners in the business •    Make smarter, faster, business decisions based on trusted, accurate data I don’t have a Buzzfeed-style quiz to help you tell whether you’re one or the other, but I have identified six key traits that I’ve found nearly universal among the strategic CFOs with whom I’ve worked. Consider these attributes and grade yourself. Then, do whatever you need to do to develop your strategic capabilities – and to make sure everyone else sees it. 1.    You Champion Innovation Jeffery Thomson, CEO & President of the Institute of Management Accountants (IMA), finds himself frequently speaking about the role of CFOs and how the accounting function in general needs to evolve. Just recently, for instance, he was interviewed for an article that appeared on Al Arabiya Network, a news source in the Middle East. He suggested that the next generation of finance leaders are taking their operational know-how and using it to advance breakthrough thinking across the organization. According to an IMA study on the subject, 70% of its members are now being asked to support innovation. “The CFO team role over time, at varying rates of maturity around the world, has been evolving from value steward, protecting and safeguarding assets, focusing on hindsight and insight, to (include) value creation, sitting at the strategy table to help conceive and implement new ways to generate sustainable growth, (to) focus on insight and foresight,” he said. “As it relates to innovation, CFO teams increasingly serve in an oversight role including funding approval, but also up front in funding the innovation through experimentation and prototyping.” Strategic CFOs don’t just think about how the corporation performed, but how performance could change based on radical new approaches to everything they do. It doesn’t mean you have to start working in a lab, but you should be one of the senior leaders contributing to innovators’ successes. 2.    You’re Comfortable Spreading Your Wings Every year consulting firm Ernst & Young publishes a report called “DNA of the CFO” which uses survey data to offer a more granular look at how finance leaders’ roles are changing. This year’s research, which was highlighted by the South China Morning Post, shows the best-in-class CFOs are eager to spread their wings. For example, 64% of CFOs surveyed have worked in multiple industry sectors, more than half have done so internationally, and 43% have had roles in departments other than finance. This obviously helps in taking more than an operational look at what a company is capable of doing. “Finance leaders will increasingly be characterized by more right-brain attributes – such as empathy, innovation and imagination – that will help them inspire and generate loyalty,” the article said. “Communication styles will also need to change to become highly adaptive. Digital channels and formats – from tweets to blogs and beyond – will be important elements of the CFO’s communication toolkit to reach internal and external stakeholders effectively.” Strategic CFOs are inherently people-oriented — and use whatever channel necessary to communicate effectively. 3.    Data Drives Your Decisions There aren’t many CFOs who sing the praises of using their gut instinct, but the best of them know that they need to bring more of the analytics at their disposal to other key decision-makers in the company. A post on RealBusiness.com summed it up well, suggesting that harnessing information is one of the hallmarks of next-generation financial leaders. “CFOs are turning to modern financial technology to create a culture of analytics. Big data has enormous potential to give companies real-time critical information – and the best finance leaders have been quick to embrace that potential,” the article said. “Inaccurate data can be a huge blow to a CFO’s credibility. The top finance chiefs fully understand this, and they make sure to stay consistently up-to-date with accurate business performance data, leveraging modern processes and technology to ensure accuracy.” Earlier this year, research from Grant Thornton showed 70% of CFOs believe they’ll increase their use of analytics this year. Strategic CFOs stay on the cutting edge of data-driven thinking – otherwise they know they might get cut. 4.    You Marry Strategy With Agility There’s nothing more painful than a long brainstorming process followed by a detailed plan that winds up gathering dust somewhere in the office. Traditional CFOs made sure operations ran smoothly, but strategic CFOs are increasingly focused on ensuring plans are executed with urgency. Of course, it’s not easy to make changes, even in some of the smallest organizations. That’s why CFO Innovation Asia recently offered an in-depth look at how to develop a more agile approach to the way they work. Here’s one of the behaviors the author identified as having a major impact on how quickly things can move: “(The CFO) provides management information on a self-service basis using business intelligence systems, including dashboards with drill-through interrogation. This enables the financial planning and analysis role to extend its remit to consider a wider range of data, including new forms of big data, and provide the analysis and insight needed to improve the business’ performance.” The report the article is based on actually shows agile finance leaders are far more likely than others to have fully implemented cloud-based corporate performance management solutions (51% vs 17%). Strategic CFOs don’t just know their KPIs inside-out. They also make sure the rest of the organization has access to those KPIs, and can integrate new ones into the overall outlook of the company as they emerge. 5.    You Think Long-Term But Work in Short Cycles Saurabh Gupta, vice-president of professional services firm Genpact, believes organizations aren’t going to be satisfied with finance departments whose operations move at the same pace they always have. He told Bankless Times that ‘cycle time,’ as CFOs and their teams have traditionally known it, is quickly becoming irrelevant. “It used to take companies days to close the books on a transaction, but with technological advances the time frame has shrunk to hours. With advancements in robotics, artificial intelligence, the blockchain and distributed ledgers, that whole conversation (about the amount of time to close transactions) will become irrelevant,” Mr. Gupta told the magazine. “Companies are looking at how to create value from these tasks too, and not considering them simple functions anymore.” In fact, consulting firm McKinsey showed survey data that said four in 10 CFOs are trying to spend most of their time on strategy, which means less time on easily automated tasks such as closing the month-end books. Strategic CFOs take the notion of continuous improvement to a new level by capitalizing on the near-term opportunities to transform their team in ways that will matter for years to come. 6.    You’re Already Developing Your Successor Teamwork is important in any area of a company, but in finance the notion of what the team does is getting greater scrutiny, and with good reason. An analyst from research firm AQPC actually wrote a post that argues in great detail that transaction processing may not be the best place to focus the people at your disposal. “Many organizations are spending a lot of money on highly trained accounting labor. But they’re barely scratching the surface of what they could achieve with that brainpower,” she says, citing research that showed top-performing companies spend only 30% of their time on transaction processing. “The key to escaping the transaction rut is to get really, really good at transaction processing, so you can do it in a fraction of the time. And the only way to get there is through process management and standardization to best practices.” This is just one good example of where CFOs can take what they know about the way things have always been done and begin to retool them in such a way that they provide a bigger or more direct impact on the overall organization. What’s more, such an approach equips your team with the skills, tools and mindset to become modern CFOs of the future. Whether you’re a strategic or operational CFO entails a number of factors – how you spend your time or manage your team, for example – but ultimately it boils down to your thinking. Compared with traditional, operational CFOs, you’re a modern, strategic finance leader if you think in data-driven terms about: •    How finance can drive company-wide strategy and innovation •    Your role spanning functions, departments, regions and more •    Finance operating at the intersection of strategy and agility •    Long-term strategy (while working in increasingly shorter cycles) •    Grooming your successor(s) today Strategic CFOs, in other words, haven’t forgotten and must never forget about how to be good at operations. They’re just getting really good at almost everything else.

CFOs and their teams may feel like they’re getting pulled in all directions, but the right leadership will ensure they keep moving forward. When the precedent-setting ransomware attack infected computer systems around the world in early 2017, experts were quick to point the finger at a group of anonymous hackers who were likely behind it — almost as quickly as they used the incident to criticize finance departments. “Cyber Attack Highlights the Lack of Tech Skills in Finance Departments,” the headline in the Wall Street Journal declared, quoting sources from consulting firms and industry associations about the need for CFOs and their teams to ensure security risks are properly mitigated. This included Sean Joyce, a principal at PricewaterhouseCoopers LLP’s advisory practice. “The complexity of fast-changing information technology is one reason internal auditors are not fully familiar handling cyber security issues…Most of them have learnt on the job,” Mr. Joyce added. It might not seem fair, at first, to try and turn finance professionals into scapegoats for something normally more in the purview of CIOs and IT departments. Finance departments have been traditionally more focused on managing the hard costs of corporate assets and reporting back on the results of the organization’s performance from one quarter to the next. Do they really have to become cybercrime fighters too? On the other hand, the fact that finance departments are considered at all in the midst of a global hacking incident shows just what kind potential influence they can wield as organizations become more dependent on digital technologies and the data that underpins how they’re used. CFOs might need to know the specifics of ransomware threats, but they can play a huge role in ensuring audit controls encompass a much broader set of risks. Rather than focusing granularly on cybersecurity, however, let’s look at some of the more immediate ways the finance function’s role can be repositioned across the enterprise. 1. Take an Honest Self-Assessment of Who’s Listening to Finance Today CFOs know they and their teams constantly need to provide more value, but that starts with getting people’s attention. According to Paul McDonald, senior executive director with staffing firm Robert Half, inertia can be a bigger obstacle to elevating the finance teams’ role than many people would imagine. “If you’ve been doing something for 20 years the same way, and this goes for any finance or accounting function, or IT — if your company’s large enough, there may be so many reports, and so many iterations of customization, that people don’t read them,” he recently said in an interview with FEI Daily. “Do you have time to read those reports? How are you measuring your business? What are the key metrics? Do the regulators need certain reports? These are the must-haves. Identify them and see if there’s a vendor or tool that can help you meet that.” In other words, what data makes management and executives sit up and take notice, and how does that compare with other parts of the organization? Who’s providing the valuable insights to the organization as a whole, and who’s listening to yours? CFO.com reported that 90% of CFOs feel they should be doing more with financial data. That’s a great starting point for realizing what information you need to bring forward in the future. 2. Build Your Network We tend to think of “networking” as something we do at a cocktail party, an industry event or on social media. The relationships you’ve already developed inside a company, however, can be even more important in terms of changing the scope of what you can accomplish. If finance is seen as an isolated silo within the business, its influence will obviously be limited. The Association of Finance Professionals (AFP) chatted with Anne-Marie Rice soon after she took on a role as the director of its EMEA region. She said the transition from historical accounting practices to a more dynamic FP&A function is dependent on making allies in the right areas. “The business partnership element is hugely important,” said Rice. “As chief executive of a couple of businesses, I’ve seen that kind of transition from finance folks sitting in the corner of the room…actually wanting to collaborate with and build relationships with heads of departments, members of the board and various business partners, because actually finance has changed incredibly, particularly since the financial crisis.” Fortunately, an E&Y survey showed that 70% of CFOs say their relationship with other parts of the business has become more collaborative in the past three years. 3. Say ‘No’ to the Right Things It may seem counter-intuitive at first, but having a bigger voice at the table may involve acting as the voice of dissent. This is key difference between, for instance, the future of the finance function and how the IT department has evolved. Whereas CIOs have been making more efforts to transcend their reputation as the “no people” to enabling business transformation, finance departments need to ensure they help organizations avoid costly mistakes. According to a story on Financial Director, two-thirds of CFOs admit their company has taken credit risks in order to rush through revenue-generating activity. More than half say they rush the compliance process to push through deals with new customers or suppliers. “A ‘growth at all costs’ culture, which can sit at odds with finance leaders’ own appraisal of its dangers, speaks volumes about the position of finance leaders today,” the article said. “Pulled in too many directions at once, finance leaders are finding themselves forced to make decisions in the dark – putting in jeopardy not only their reputation, but that of their organization.” It’s not always going to be easy to stop certain plans once they’re motion, but that’s precisely why organizations need regular reality checks from their CFOs and finance teams. Finance departments are in a unique position to advise when to take the right risks at the right time, based on the information at their disposal. Even if it’s not what companies want to hear, they’re likely to listen to arguments backed up by data that only finance has at its disposal. 4. Coach Your Company to be Data-Driven Chief Learning Officer is a magazine aimed at HR and others responsible for helping to manage people and processes. One recent article explored the topic with a focus on whether CFOs are a potential friend or a foe. Although the final answer was “friend,” there was a recognition that growing pains are taking place on both sides of the table: “For more than 100 years, CFOs have been using ROI for capital expenditures. Now the CEO would like to see the same approach for noncapital expenditures, such as learning and talent development. Some CFOs are uncomfortable with this responsibility. One told us, “They already hate us because of the budget process, now they are going to hate us even more when they perceive us as measuring their performance.” It’s not going to be enough for CFOs to develop a better rapport with the CIO or the heads of sales and marketing. Repositioning how finance is perceived will also involve helping all parts of the organization work in a more metrics-driven manner, in as supportive and nurturing a way as possible. Many people see the CFO as only one step away from CEO, so the tone conveyed by finance to even the most junior levels really matters. That may be why a study from Deloitte showed that 69% of CFOs who describe themselves as “performance leaders” practice mentoring and coaching. 5. Assemble the Right Tools and Talent A more analytics-oriented finance department will be a more influential finance department. That shift in mindset won’t make much of a difference, though, if you don’t also have some great technology that can take analytics well beyond what CFOs and their teams have always been able to offer in their regular budgeting, planning and reporting. It may also mean hiring a lot differently than in the past. A technology industry association called CompTIA released a survey of its members which noted that the “traditional IT buyer” is rapidly changing — as are those who are using the tools in specific business departments: “21% of chief financial officers said they have dedicated technology roles in their department, including data scientists, business analysts and software developers,” CompTIA said. “More than half have created hybrid positions that are partly technical- and partly business-focused.” It may take time before we can really determine what the long-term picture of future finance departments will look like, but there are tools today to begin the process. Those tools, along with taking some of the other steps outlined above, are your best bet to making finance something that isn’t merely seen as a cost of doing business, but a partner in the business where some of the biggest value is created.

Finance leaders at companies large and small are seeing the strategic management of information as a way to boost collaboration and innovation.  Ruth Porat is well aware she has occasionally been called “Ruth Vader” behind her back. In fact, the CFO of Google laughed off the rumors during a recent appearance at a technology industry conference. After all, keeping costs under control is one of the things those in her role have always been expected to do — being a little ruthless about it could be considered a sign she’s particularly good at her job. On the other hand, that’s not why CNBC recently said Porat was “the perfect fit at Google.” “The most valuable thing you can have as a leader is clear data,” Porat said, later adding that, while cost management is always important, “We’re not just focused on expenses, but on what makes us great, [which is] innovation.” Easy for her to say, right? Google is obviously one of the most innovative and data-driven companies in Silicon Valley, where pouring money into high-risk but potentially breakthrough projects is the norm. What if Porat were working in a less dynamic kind of organization — a firm on Wall Street, for example? The truth is that Porat came to Google from Morgan Stanley. She’s not an anomaly among her peers but a shining example of how highly experienced financial leaders are seeing new opportunities in the data at their disposal, and new ways to provide value as CFO. Note that Porat doesn’t suggest she is directly doing the innovating at Google. Instead, she’s creating the conditions in which innovation is possible. That sounds a lot like the approach of George Kapitelli, executive director for finance and logistics at the Royal Melbourne Hospital and North-Western Mental Health. In an article about the evolution of CFOs on a publication called In The Black, Kapitelli echoed Porat in talking about the value of clear data, but went on to describe what it meant in fostering a more collaborative culture: “My main priority has always been making sure you have a sustainable, successful organization from a finance perspective – and that can be very different from the sales director, the engineering director or the head of research, for example, because their priorities are different . . . What’s really important is transparency and trust – giving people accurate financial insights into where the business is heading – then you’re relying on the emotional intelligence of the group to be able to take that information and use it appropriately.” It’s funny how some of the best CFOs seem to say the same things: Clear data lets you bring costs in line. But it also lets you create better relationships with the team, which in turn leads to innovation.