Entrepreneur Magazine wrote an article outlining the 4 primary roles of a CFO:
- Book: The primary role is to ensure that the books are in order.
- Share: Sharing data with Management for forecasts, guidance and top level decision making.
- Comply: SEC filings, tax returns, SOX, HIPAA and PCI are several examples of compliance requirements.
- Assist: Helping internal customers (i.e. employees) in making decisions based on the financial metrics of the company’s performance.
So how is it even possible that a person entrusted with the corporate finances who can be excelling at the 4 fundamental aspects of their job can actually be negatively impacting the profitability of the company?
In a word, acceptance; or the tolerance of an existing counter-culture, to be a bit more specific. Just as dogs smell fear, employees smell retribution, trouble and performance improvement plans. So if the mood emanating from the C-suite is harsh, punitive or negative, employees will be fearful of any discovery that could be viewed negatively, even if said discovery would very positively impact the company’s bottom line. So they will hide things, they will lie, they will fight and undermine and resist and shield and shelter… they will do all that they have to do while acting in self-preservation mode INSTEAD OF ACTING IN THE MODE OF WHAT IS BEST FOR THE COMPANY.
Many times the biggest PROFIT-ENHANCING ideas have much more to do with fostering a better workplace atmosphere than they do with Receivables, Wall Street guidance, or ROI models. If you can cultivate a culture change that results in a more proactive environment, where outside help is accepted, and where employees are appreciated not only for the sacrifices they make but also for their cost-cutting and efficiency-enhancing ideas, then the benefits will far outpace any that would result from a new-fangled inventory management metric or cost allocation solution.