In a recent internet media interview I was asked this question: Times are changing; explain how you are taking a more proactive approach to encouraging strong business managers, CEOs and leaders to become even stronger performers?
This is how I responded to this pretty large question:
Being a bean counter in today’s fast moving business world is not good enough anymore. Financial management is no longer just about having good numbers, today that’s just the prerequisite to get into the game. Today a company must have a strong sense of its strategy and how to carry it out. That has significant financial implications, and it requires several changes in management thinking:
- A recent Inc. magazine survey revealed the estimate that perhaps 75% of privately owned companies will change ownership in the next 5 to 7 years. Those (predominantly owner operated) businesses should be looking at strategies today to make that exit as favorable as possible, because it will be different from the strategies of a going forward business. Many of these owners won’t think of this until it’s too late.
- Business finance reveals the real reasons a business will succeed or fail. If the numbers show that the strategy is weak, management has to change its strategy or the way it executes. Everything you do has financial implications, and you have to know what those are up front whenever possible. That’s the value of the strategy.
- CEOs and line managers must understand how financial strategies and tactics can help them or hurt them. They must have a working knowledge of finance in addition to whatever specific technical and people skills they bring to their job. Unlike business a generation ago, this is no longer an option.
- CFOs and to a lesser extent lower level financial managers as well, must understand the business strategy and be actively involved in its formulation and execution. Otherwise they are just bean counters and that is not acceptable in today’s aggressive environment.
