CEO

When your business needs a CFO ?

When do I know that I need a CFO? asked a client CEO. Tt's not that difficult I said. Here are a few words and if you feel any or few of these words are your inner voice, then writing is on wall :

1. My business has great potential and is growing, but at times am not 100% confident about my business decisions, not knowing the financial impact of these decisions

2. There’s always a confusion on which direction of growth should I take? And what would be the financial outcomes?

3. I never get to see my financial dashboard ON TIME or in a manner that tells me which Product, Service, Geography or Department is making how much money.

4. I'm never able to plan my Cash Flow Cycle in ways that gives me peace of mind

5. I miss most business opportunities since am unable to raise funds at the right time

6. Growth is fine but it always comes at the cost of increase in working capital and finally my profit takes a hit

7. My Accounts & Finance team always struggle to do financial closure in time

8. I have a good team and they are close to me, now how do I put them into Performance matrix? People Performance at the top always remains a challenge.   

Now you will say that these are the concerns of every Entrepreneur. Yes, you are right. So here comes another set of questions – whether your business can afford one? At what size of business one should get the CFO ? 

When it’s a question of affordability that’s where Shared CFO firms helps you to deliver value at a lesser cost since most Small & Medium size business won't be at a stage where you need a full time CFO. You need a CFO for few hours or days a month to help you with key critical business decisions and manage your financial risks. Shared CFO brings this value at a significantly lesser cost. Regarding Size – there’s no fix definition at what size a CFO is justified, as they say – earlier the better and hiring the first CFO will always be an Investment decision for any Entrepreneur.

The only flip side is once you hire and realize the benefit of the CFO you are most likely to curse yourself for taking this decision so late. Jokes apart, if business growth with financial fitness is your priority, don’t blink. 

Organisational Performance in Gangnam Style

Saturday night not that I am a frequent club hopper but for a change went to one of the popular disc hangout. Reached at 10.45 pm and that’s early by Mumbai standards. Being among the first 10 patrons to witness the place in full lights before it went dim. Vibes were good with smart cheeks welcoming guests, light aroma in air, 4 DJs playing some warm up music and getting ready, big screens well placed, bartenders' counters greatly organized, tempting as usual DJ, tables well placed everywhere but with no chairs which I was just wondering……in no time the place was packed, music getting louder, spot lights beaming with perfection, beer, vodka, wines, red bulls flowing freely, every one letting their hair down and dancing to the great music.

As the night progressed DJs were playing their best ever and some fundu innovative mixers, some popular numbers. Bartenders doing their own bottle jugglery, fire stunts while they serve every single drink with such a joy and passion that it was a treat to watch, Spot light focusing on those cool dancers beaming to big screen making sure every one was getting in on high even those who were on red bulls & H2O seemed to be equally performing at their peak as if there was no tomorrow. And my goodness, then came that magical moment when DJ played that number “Gangnam Style”. Dance floor was on fire with every single person on the floor at their peak performance and it just didn’t matter whether floor was jam packed, not much space to move, no one cared about anything around them but were completely engrossed in their own act. By the time clock hit 1.30 am people were just not ready to hang up their boots asking for more….it was great Saturday night treat!

Next morning, it just got me into thinking how everything was beautifully orchestrated to enable this peak performance happen? How did that make sure that every one was at their best and at their peak in those 3 hours?

In most of my meetings with client CEOs almost everyone's concern is organizational performance and how do we make their team a great performing team. Most of the times we search answer in clarity in Job descriptions, setting performance expectations, clear communications, precise review mechanisms, etc..etc.. Yes all this is great. Keep it up! But where is the design to make this peak performance happen ? Where is that orchestra to enable people's best in them? What are the leaders doing to make this peak performance happen?

In most organizational Leaders expect people to come on or before dot time putting so much stress on people. Even they get delayed by few minutes here and there, they get served with those machine teas and coffees which no one likes (and most people would have given up their habit of having tea), they don’t even think of serving cold drinks, ice teas, coolers or chaas (butter milk) in summers, they conduct long hour meetings with no food or refreshments, they almost starve people. They want people to wear ties and suits when the folks are sweating in a hot country like India. Health, hygiene, clean rest rooms have no importance forget talking about aromas, diffusers, nicely painted walls, decors, lighting, seating arrangements, soothing music, etc which have not occupied their wallet of mind at all. Is there an engagement program where team is having enough fun? Is internal language encouraging enough like music to their ears? Does appreciation happen like spotlight beaming the performers? Can leaders play a role of cheer-leaders while their team performs? 

Now, without this orchestration in such a suffocating environment we expect peak performance from team just because we gave them a clearly defined single sided Job Description and communicated in exact language what is expected from them  with no commitments on providence from organisation side.

Leaders are designers and enablers of peak performance in the organization; they are the ones who should orchestrate everything within the organization to make it a rocking place. They are the ones who should invest in good People practices. Organizational performance is not a one-way delivery, it's more a cause and effect relationship. Let your finance team not fool you in seeing this as a cost, but as a great investment which could yield in multiples.

If you aren’t convinced, how about hitting a disc next sat night with me?