Over the past few months, we have discussed employment and work environment issues as the workplace continues to evolve. If you haven’t read already, catch up with AcceleratingCFO’s Joey Hodges’ latest articles here and here.
It may seem unusual for executives in the finance world to discuss HR issues; but, these topics are becoming more and more relevant to finance leadership. According to a recent Gartner study, workforce issues ranked #3 on the list of Top 10 strategic business priorities for the year. And as all qualified finance leaders know, any initiative deemed important by CEOs must be addressed by us CFOs. As a result, entrepreneurs and small business owners alike must figure out ways to motivate their employees and retain consultants with both monetary and non-monetary incentives.
So how do business leaders use strategic finance to get and keep the right employees in their seats?
- Finding Employees that Get It: When you are considering hiring a new person or promoting from within, it’s important to make sure that he or she understands your business model and is engaged in the success of your company. This involves identifying unique traits that indicate leadership skills and emotional intelligence of the staff member. Finding the right team members who work well, both independently and with teams, will yield great returns for your company. Choosing employees who are in it for the long haul, who understand the importance of optimizing activity and output, and who are focused on common goals will yield a more profitable company
- Measurable Individual and Company KPIs: Over the years, we have identified a major no-no for business owners: reluctance to be forthright with the company’s financial data. The most successful companies always have employees that understand the full view of the company’s financial picture and can comprehend how their role impacts the financial statements. And when key employees understand their role with the company AND have quantifiable goals and key performance indicators (KPIs) that they can work towards, interpreting performance is transparent and straightforward. Having individual goals that are in lock-step with the company’s business goals will ensure both individual and corporate success.
- Living in the Present and the Future: Business leaders should always have a short, medium and long-term plan for the company. As it relates to employee mix, it is important to understand current needs while also anticipating future needs. For example, a bookkeeper may be the right employee when the company is under 1 million dollars in revenue, but that will change when the company grows to a 50 million dollar company, i.e. a controller becomes necessary. Business leaders need to juggle the needs and skill sets for where they are today with the direction that they are headed tomorrow – and sometimes that might mean letting somebody go who won’t be able to grow professionally as your company matures.
Business leaders need CFOs more than ever because we do more than number crunching and metric measures. Chief Financial Officers understand the vision of the company, its employees, and more importantly, how the strategic finance function can help develop business goals and objectives.
Take-away: If you’re a company that is experiencing higher growth and are not sure if you have the right skill set in-house to support your financial goals and objectives, speak to Brian and Scott at email@example.com for a free assessment of your finance function.
Co-founders & Managing Partners