Product Description

On the heels of a decade of scandals and the new pressures brought on by the Sarbanes-Oxley Act, corporations expect far more from their CFOs than simply managing the numbers.

They expect decision-making support and performance insights that can improve bottom-line results. Unfortunately, the complexity and detail inherent in CFOs’ jobs keep them shackled to budgeting and transaction-processing systems that leave little time for value-adding activities.

Grounded in extensive research, Reinventing the CFO outlines seven critical roles—from streamlining redundant processes to regulating risk to identifying a few key measures—that CFOs must take on in order to successfully transform the finance operation.

Product Details

• Amazon Sales Rank: #131583 in Books
• Published on: 2006-03-01
• Original language: English
• Number of items: 1
• Binding: Hardcover
• 258 pages

About the Author
Jeffrey Hope is research director of the Beyond Budgeting Roundtable, a not-for-profit collaborative that designs new performance management processes. He is a chartered accountant and a co-author of Beyond Budgeting, Transforming the Bottom Line, and Competing in the Third Wave. He is a former venture capitalist and founder of several businesses. He lives in West Yorkshire, England.

Customer Reviews

How to redefine a role "that is fast becoming obsolete"

I agree with Jeremy Hope that those who are -- or who aspire to become -- a CFO need to understand that, as Hope explains, "too many CFOs...remain prisoners of dysfiunctional systems and mental models that were developed for a role that is fast becoming obsolete." That is to say, the position of CFO must be reinvented. However, presumably Hope agrees with my own opinion that that will not happen unless and until governing boards and CEOs insist that CFOs be centrally involved as part of the senior-management team running the given business. The same is also true of CIOs and heads of HR. Today, CFOs face a number of extrernal pressures. For example, new success drivers such as strategic planning, resource allocation, and performance measuring systems as well as a new regulatory environment and more demaning shareholders. With regard to internal pressures, they include too much detail and complexity, inadequate forecasting capability, too little understanding of how to reduce costs, and a lack of risk management expertise.

In this volume, Hope addresses with rigor and eleoquence a number of key issues that the CFO and her or his finance team must accommodate to transform the finance operation. He suggests that the CFO be viewed in several different roles:

As a "freedom fighter" who liberates both finance and business managers from "huge amounts of detail and the proliferaion of complex systems that increase their workload and deny them time for reflection and analysis"

As "analyst and adviser"who, by breaking free from detail and complexity, "creates time for finance to provide the information that managers need to make effective decisions"

As "architect of adaptive management"who enables managers to be liberated by releasing them from "the chains of the detailed annual planning cycle" by replacing targets and budgets with "effective steering mechanisms, including continuous planning reviews and rolling forecasts, that enable managers to sense and respond more rapoidly to unpredictable events and to changing markets and customers"

As "warrior against waste"who with her or his finance team is able to focus on "huge swathes of costs that have remained unchallenged for years."

As "master of measurement" who brings measurement back under control and provides clear guidance about its meaning to managers at every level who, with rare exception, only need six or seven measures

As "regulator of risk" who provides an effective framework for good governance and risk management "by using multiple levers of control that support corporate governance controls, internal controls, strategic controls, and feedback controls"

In the final chapter, Hope focuses on the CFO as "champion of change." He cites a number of exemplary CFOs have transformed their finance operations, examining how they started, what vision of goals they set for themselves, how they got buy-in from key people, and how they implemented the changes. His case examples include American Express, Tomkins, and the World Bank.

Hope devotes a separate chapter to each of these "roles," explaining how the reinvention of the CFO inolves a multi-dimensional process of increased involvement in management at the highest level. To repeat, this will not happen unless and until the governning board and CEO insist upon and wholly support, then sustain that process.

In this context, I am reminded of what Robert Kaplan and David Norton characterize as "the strategy-focused organization," one which is guided and informed by five core initiatives: translating strategy to operational terms, aligning the organization to the strategy, viewing strategy as everyone's job, making strategy a continual process, and mobilizing change through executive leadership. The first four principles focus on the Balanced Scorecard tool, framework, and supporting resources; the importance of the fifth principle is self-evident. "With a Balanced Scorecard that tells the story of the strategy, " Kaplan and Norton suggest, "we now have a reliable foundation for the design of a management system to create Strategy-Focused Organizations."

Hedre's a key question: When embarked on the reinvention process, how to gain the support of key people? In response, Hope stresses the importance of involving operating people in the change process, avoiding more complexity, showing some "early wins" (i.e. picking "low-hanging fruit"), and being patient while maintaining momentum. He makes a convincing case that financial managers really can "transform their roles and add greater value" but only if they are allowed to do so. Moreover, they must be actively involved in a process, a "journey," shared with others. Only then can everyone on the senior-management team, working effectively together, establish and then strengthen "a more adaptive, lean, and ethical organization."

That is a journey all senior-level executives in a given organization must complete together, with the active involvement and solid support of governing board members. Hope explains not only why that is imperative but also how to do it effectively, to the substantial benefit of all stakeholders.

Well-done!

Well-written proposal for a new role of the CFO
Jeremy Hope's well-written and well-documented proposals deserve careful reading by every financial executive. It is no news that the job of the Chief Financial Officer is changing. However, he points out, few CFOs understand or accept the steps they should take to prepare themselves for the demands of a new role. Hope explains what they need to do clearly and concisely, mincing no words about the troubled state of the CFO profession today. We recommend this book to CFOs and other financial professionals who want to become strategic partners in their organizations.