CFO Priorities in 2012

If you ask a CFO what his or her priorities are within the confines of the finance group, you’d hear an array of expected functional answers – forecasting accuracy, transactional performance, management reporting, return on cost of capital, regulatory compliance, etc. Robert Half recently asked the same question to a group of CFOs with a caveat – think of priorities of the organization as a whole, not just the finance department. The results below reveal how broad typical CFO’s mindset has become over the years, and it’s great to see the chief numbers person looking to leverage technology and / or processes to further push the efficient production frontier curve to the right.

  • 35% – implement new or upgrade existing IT systems for increase efficiency
  • 21% – develop and introduce new products and services
  • 14% – expand geographically, e.g. introduce new locations
  • 11% – pursue M&A opportunities

One of RJSL’s clients (where I am personally the CFO at), Peritius Consulting, has been translating strategy into success stories for over 20 years. Our C-level consultants with years of industry experience help companies avoid pitfalls of enterprise-wide implementations by ensuring that the plans are properly laid out; stakeholders are fully vetted and risks are managed from all possible angles. The result – highest possible return on investment on large-scale corporate initiatives. We invite you to contact us for additional information.

Role of the CFO in Mergers, Acquisitions and Integrations

What makes mergers, acquisitions, integration difficult?  Not every deal is done by the same rules, and no one strategy fits every company.  One thing is for sure — facilitating a transaction or liquidity event is as much art as science, and many industry professionals would argue that the CFO must play three essential roles in order for the deal to work:

1. Strategist – In addition to the CEO and other key executives, the CFO must wear the hat of a strategist during the process, and this goes beyond merely looking at the numbers and deciding whether or not multiples on the table makes sense.  Does the acquisition or divesture fit long-term corporate strategy and vision?  What are the pitfalls that everyone’s overlooking?  Companies without COOs often have CFOs who translate numbers into implementable action items, and this is a logical extension of such responsibility.

2. Synergist – Positive synergies do not just appear in thin air.  If it’s there, it must be fostered in order to reap the rewards.  Same with the negative synergy.  If not addressed or extinguished right away, like a wildfire, it will grow until the entire deal is consumed.  The CFO must manage the synergies, both positive and negative, and seek answers to the fundamental issues and questions at hand.  What are the drivers?  Do we have the right people with right incentives to accentuate the strengths while addressing the weaknesses?

3. Integrator – By this I mean wearing the hat of Chief Implementation Officer.  This is where a CFO’s project management skills (by nature, we are type A, detail-oriented professionals) come in handy, and he/she must roll up the sleeves and their hands dirty.  Run or participate in meetings – implement, monitor, assess and adjust, as my former boss used to tell me.  I’vesbeen brilliant deals fail to live up to their billing due to poor integration efforts.  CFOs must take charge.

Does this mean other executives are chopped liver in the process?  Absolutely not.  Everyone, from a junior analyst to the CEO, plays a critical role in the process of being proactive and identifying opportunities.  This is just one perspective from a key position.  One thing for sure (said I it twice on this post) – if the synergies are not achieved, CFOs are ultimately accountable and stand on the firing line for explanations, so they might as well dive in head first and take control.

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