The Finance Function: 12 Ways to Drive Strategy and Value Creation

Ready to drive strategy and create value? 

Finance function – regardless of the size of your business – you should hone in on both strategy and value creation in order to leverage a competitive advantage and provide you with peace of mind. 

How do you support the finance function, make strategic decisions and create value?

Understand your Business Drivers

In such uncertain economic and ever-changing regulatory conditions leaders have to take the connections between drivers into account as they create the basis for your strategic business decisions. 

Firstly you need to get super clear on what is driving your business:

  • How does your business make money?
  • What is your business model? 
  • What are the returns on invested capital?
  • What is your business’ competitive advantage?
  • What is your cash position, cash flow and liquidity?
  • What is your difference between profit and cash flow?
  • What is your asset holdings – tangible (eg. building and equipment) and intangible (eg. patents)? 
  • What are your growth strategies? 
  • How are your people – employees, customers and other stakeholders – feeling?

Not only is it crucial to understand these drivers but, you need to assess these on a regular basis as they do change over time. 

Improve your Business Drivers

Once you have defined the business drivers you can initiate conversations amongst your team on how to improve them. 

  • What are sources of growth? 
  • Where can we find operational improvement? 
  • What changes can we/should we make to the business model?
  • And, what gains can we expect from these improvements, at what cost, and in what timeframe?

Understand Existing Information

For valuable insight, review historical financial data, talk to your sales team about issues such as future competitive pressures or lost customers, and gain some external perspective by talking to customers, investors or professional service providers. 

Fill the Information Gaps

Should there be insufficient information available to make sound strategic decisions these gaps should be filled through exercises such as requesting additional management reports, commissioning one-off analytical projects and undertaking market research.

Understand the Leadership Agenda

Before making critical business decisions, spend time with your leadership team – owners, board, senior managers – to get a clearer understanding of their goals, aversion to risk, plans, strengths and weaknesses. 

Find your Voice

You’ll need to collaborate with management yet think like a shareholder. While challenging, this does offer a unique position to be able to explain the numbers, justify the business’ strategic options, and build credibility in decision-making. 

Streamline your Finance Function

High-performance finance function provides accurate data and analysis through streamlining processes and provides time for strategic projects – think sensible use of information technology, up-skilling finance staff, simplifying your organisational structure, limiting manual processing, measuring against solid benchmarks, and using insightful reports. 

Have the Conversations

Ensure that business performance is at the centre of management conversations – use dashboards, performance targets, business meeting cadence, planning processes. Use persistence to keep business performance the primary focus of discussions.   

Be a Mentor and a Mentee

While it’s important to share your skills and experience by mentoring others, you shouldn’t be afraid to ask for advice. Being mentored, either formally or informally is an important part of good decision-making. 

Listen, then Act

Even if there is pressure to act quickly, take a longer-term view and move only with complete and accurate information. This is when you need to balance a sense of urgency with prudent risk management. 

Get your Priorities Straight

Avoid clutter, focus on strategy. Select three or four important change initiatives and focus on those, consistently. Focus on big picture themes and the long-term. Don’t get caught up in micro-actions or tasks. Be prepared to repeat your message over and over – internally and externally. 

Stress the big picture themes and what can be achieved in the long term. Don’t get caught in the detail of many micro-actions or tasks.  

Build Credibility and Move Forward

Remember that credibility is built on strategic thinking – don’t be too focused on compliance and control that you miss chances to help the business grow, don’t be so focused on tightening margins and cutting costs that you miss those all important strategic opportunities. Examine all the ways of building and accelerating value creation. Use finance as a tool to drive business strategy and value creation. 

Even if your job title isn’t specifically ‘CFO’ or your business doesn’t have a dedicated CFO, building strategic finance function and creating value is critical and time should be allocated to this practice, perhaps in collaboration with an expert external adviser.

Beyond Advisors offers professional advice for businesses of all shapes and sizes. For any help or assistance on finance function, driving strategy and creating value you can get in touch with our helpful team and open your doors to success. 

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