I recently read a post from Human Capital Group telling about new statistics saying that 60% of CEO’ s in Denmark is feeling alone when defining company long-term strategies reviewing the environment in top positions. Another interesting conclusion is that most of these are very happy about their job because of the relation to the board chairman. I am wondering a few questions:
Does CEO’s not want Finance to be part of the long-term strategizing?
It can easily be read as a fact that the CEO’s are very independent people that mostly likes to work alone and get their own agenda on running their company but I believe myself that the many CEO’s who enjoy their role and defining long-term strategies on their own are only doing this because they do not really see the proactiveness from their Finance Business Partners that is actually required. If the finance function were to succeed in actually being a true Business Partner they would be able to add more complimentary information to the discussions on long-term strategy as finance would be able to understand the combination of all areas of the business a lot better. In the more traditional company structure this has been the task of the CEO’s but much information is hidden as the intelligence is simply not good enough. I do believe that most CEO’s would really appreciate any input as they see the additional value this will bring to the table.
Should Finance Business Partners take stronger part in defining long-term strategies?
Personally, I strongly feel that is the duty of a CFO to be able to come up with own suggestions on how the long-term strategy should be. By doing this, you enable a really beneficial dialogue with the CEO on strategic values and highlight the differences on opinion (or agreements, of course) which will better support the business finding a strategy that will create common grounds further down in the organization and thereby create better results.
What can we do as Finance Business Partners to influence the long-term strategy?
To enable the finance function to be more proactive, you should ensure the that the information that reaches the top of the hierarchy is also value adding in terms of understanding the true business. I would suggest to look at strategizing to get to know the business better by investing in training programmes on “True Reporting”. How many organizations intelligence data do you think gets corrupted by middle leaders that are trying to save face because they are afraid of the consequences if things are not as expected? My guess is “many”, and one manager doing this leads to the next also doing it. I believe that a great amount of value will come from creating an openminded organization mindset. Another great place to start would be defining the framework of collaboration between the company functions. Many people say: “Finance should be closer to the Business”. I say: “Finance needs to be part of the Business” as it works both ways in collaboration. Not only collecting data and information and understand the business but also create the environment where the remaining parts of the business understands the finance perspectives and is supported in the way they can also perform at their best.