According to Peter F. Drucker, the measure of the executive is the ability to “get the right things done”.
To be effective means you are able to deliver on expectations. So what are the right things a CFO should be doing? A CFO is expected to advise the management and board on financial issues, interpret economic indices and translate it to opportunities for the organisation, liaise with external bodies on behalf of the organisation e.g. government, banks, regulators and other stakeholders, represent the company in matters of finance, put in place a robust system of accounting, provide leadership for a team of professionals responsible for managing the organisation’s financial data, effectively manage the resources of the organisation. The list can go on and on based on the peculiarities of organisations.
But all these and the many more you can think of can be simplified with a robust financial system. To be effective then, a CFO must invest some time to build a financial system that is able to support the delivery of the expectations in a timely and orderly manner.
In my understanding, a financial system comprises of the following:
- Structure. This is the grouping of similar job functions into sub-unit. This clearly spells out who is responsible for what. Employees’ strengths are better harnessed this way. Also the CFO will have the luxury of time to attend to more executive demands as against being lost in the day to day operations
- Process. This is the way things are done for optimal benefit. Where procedural guidelines exist for each task, minimum level of quality is set, which in turn guarantees delivery of expected outcome with minimal downside variation.
- Infrastructure. The assets required to effectively carry out financial/accounting operations can be summed up in the word infrastructure. This includes the tools, software, files and cabinets etc that make for smooth and hitch free operations
- Personnel. These are the people that compliment and complete the other three components. The right set of skills can be used to drive the right set of results.
The ability of a CFO in effectively installing these four components will determine the degree of his/her success. Success here is simply meeting expectations.
Doing things right may yield immediate result and applaud, but as an executive, more is expected. It is expected that you invest in doing the right things which is capable of producing returns for the organisation on a long term.
The benefits of you as a CFO investing in a robust financial system are enormous. Few of them are mentioned below.
- You become dispensable. Not that you will lose your job but in your absence management’s expectations are still being met. To illustrate this, a coach who has done a good job can be more relaxed during a match and may even take a walk if he so desire. Attempt at giving direction while the match is going on may not do much good as this may cause confusion among the team.
- Surprises are minimized. Because you have take time upfront to determine where things belong, what may go wrong and who does what. This way, deadlines are met easily and there is unity of purpose in the unit.
- Increased productivity because staff energies are better harmonized and channeled more effectively.
- Creativity is enhanced because tasks are well defined and articulated. Each staff takes ownership of functions and can explore new initiatives or come up with better ideas for greater results.
- A good system will ensure that quality financial information is available for management decision making.
- Healthy work environment is the result of a combination of well defined roles, well communicated responsibilities, less friction, less overlap, more predictability and standardization, less stress due to inability to meet deadlines, sense of job security etc.
Now that everyone is clamoring for a safer environment, I believe a safer workplace will be a leap in the right direction.
Abiodun Mamora is CFO of the Filmo Group