The key questions to ask - why? what? how?

Are you one of those people that asks a lot of questions – why are we doing this? What is this all about? And How are we going to deliver this? Simple words and questions but critical in all aspects of business. I have to admit it does annoy me when people ask too many questions, but it really is good engagement. It means they are engaged, they are listening and they want to understand the background.

Sometimes our communication gets so bogged down that it’s hard to follow – and it’s hard for people to come on the journey because they don’t understand the basics. As a leader being able to article the Why, What and How of a companies:

• Strategy

• Overall Plan

• Particular Change 

Is critical.

Right now as we run into the new financial year (for most companies) this comes more important. It’s a great opportunity to use these questions to speak to your team about the new financial year. To think about how to frame things up and get people onboard.

Why?

Definition of Why:
The cause, reason, or purpose for which know why you did it that is why you did it.

The power of the Why.

Employees are more focused than ever on the Why. Fundamentally why does this company exist? They are looking for value, purpose in why the company exists. Some companies have this and other companies this becomes a challenge. Do you understand your why? Does it resonate with the employees? Is it truthful and focused? Have you communicated it. It’s important that as a leader you understand the why and can articulate this to the team.

Simon Sinek famously talks about Starting with the Why in his famous books and ted talks. 

Start With Why shows that the leaders who’ve had the greatest influence in the world all think, act, and communicate the same way — and it’s the opposite of what everyone else does. Sinek calls this powerful idea The Golden Circle, and it provides a framework upon which organizations can be built, movements can be led, and people can be inspired. And it all starts with WHY.

Why?

Definition of Why:
Asking for information specifying something.

The cause, reason, or purpose for which know why you did it that is why you did it.What are we going to deliver this year? What are the initiatives, what are the funding and plan of what we will deliver over the next 12 months. Being clear on the plan and how it links to the Why. Making sure what we are doing is linked with the Why is critical. If the What is not aligned to the Why it becomes meaningless.

Research has shown that companies that have more than 5 priorities deliver less than 18% of their plans. Being clear on your priorities and the alignment to the Why is critical. There is no point having a Why and What if you can’t deliver the how.

How?

Definition of How:
In what way or manner; by what means.

Maybe this is the most important question and people miss this step. If you have a clear why and what – how are you going to deliver? How are you going to operate (values, operating rhythm), what is the plan to get you there? How are linking strategy to execution to ensure the why and what build a plan on the how. The how is normally missed and means that you are not delivering the outcomes you want to achieve.

Most companies are focused on providing a ‘why’ for their teams. Finding that ‘purpose’, that reason to associate with the brand that is not about filling pockets of shareholders. This is a hard one. More and more there is a challenge for employers to represent meaning in working for their company. Employees are demanding this and Employers and trying to align the Why story…but it’s a struggle. 

The ability to be able to communicate the

• Why

• What

• How

consistently, effectively and in an aligned manner is critical.

Key things to think about when communicating with your employees:

1. Being able to articulate the Why of your company?

2. Being able to articulate the What – are you trying to achieve?

3. Being able to articulate the How – are you going to do this?

Keeping communication simple and consistent is critical. Take the time to ensure you understand and you articulate this to your employees.

Life's a journey - what does this mean?

One piece of advice my dad gave me, was to remember that life is a journey. It’s hard when you are 20 years old to really know what this means?

As I get older, a ripe old age of 42 I really consider this concept of journey. It’s an interesting one, very personal and something that evolves.

The dictionary says that journey is – an act of travelling from one place to another. Where are we travelling too? What is this journey of life. Wow, very deep thing to think through.

I am not sure I have the degree to make an assessment on where we are heading, I can definitely focus on what this journey needs to look like, what is a successful journey. 

In business, when we start a program we normally start by designing the end-state view – what does success look like, where are we heading and what are the key design principles that need to be determined in relation to this. This sets the course, direction and gives people something to anchor too. It makes decisions easier and allows people to work towards a common goal. I suppose life is not that simple – what is the end state you are building and what are the design principles to make decisions around your journey? Maybe that is why people talk about what you want people to say at your funeral, that is quite depressing but maybe they are trying to design this end state view to build the guardrails for the journey. On the journey of life it’s probably not that easy.

To define success for your journey, you should consider the following:

• What makes you happy – do more 

• What are you good at – do more

• What is aligned to your strengths – do more 

• What develops you / stretches you, in the right direction – do more

• What allows you to associate with people that inspire and challenge you – do more

• What makes you miserable – do less

• What makes you uninspired – do less

• What makes you focus on counting down the week – do less 

• You know in your gut it’s not good for you – do less

So many more rules you could apply, but you get the drift. You need to determine what you are going to do in your journey, it’s like a choose your own adventure book… you remember you can pick which direction you took the characters on. The reality is life, is like a choose your own adventure, but there are also things that you can’t control that will land in your lap and how you respond.

When thinking about the journey, people reference sprint versus marathon and ensuring you don’t go to quick you burn yourself out and you enjoy the journey. Everyone has a different pace, but sometimes you do need to slow down – for your health, for your family, to slow down to speed up, so people can keep up.

What is your pace?

Enjoying the journey, as you get older you realise that you need to enjoy the journey – life’s short. Time speeds up and making the best of every time you have in life is so critical. This means spending time with people that inspire, challenge and encourage you. Caring about their opinions but not listening to others. Embracing yourself, imperfections and all and do what makes you happy. 

On the journey there will be great days, there will be speed humps and there will be an accident on the freeway that will stop you in your tracks. The hardest days are the ones that will demonstrate to yourself your tenacity, your passion and your ability to keep going. While you are in the moment, it will appear too much and once your through you will proud of your achievement.

Remember take time on the journey for a breather – to reflect what you have achieved, where you are and how you are going to continue on your journey. You continue to learn lessons, some the hard way that may change your journey, how you approach your journey or your destination. 

Regardless of what you see on social media, no one has a perfect life. So be kind to yourself, to others and don’t compare, just enjoy your journey and make sure you have some great people on the way you can share the journey with!

I know that on my journey I want to make a difference to people’s life for the better. I am passionate about helping businesses optimise and I hope that I can leave a legacy in working with businesses to drive success.

How to Master Delivery

The plan is built, you have the budget, why can’t you deliver? 

It’s the issue that is widely known, the easy part is building the plan and getting the money (well sometimes) but being able to deliver the plan is the hard thing. When the plan is unclear or money hard to get it’s a good excuse, when that’s done there are no excuses you need to be able to Execute. 

At Whiteark this is where we see our clients need help and this is our sweet spot, being able to help deliver a program of work. There are 4 key steps that need to be taken to ensure the plan is successfully executed.

Key four steps:

Step 1: A detailed plan is required.

The plan must be very detailed and provide information on the following:

• Tasks

• Timeframe

• Responsible Party

• How success will be measured

Building out the program is critical with the required detail to measure if things are offtrack and the flow on impacts. Understanding key dependencies is critical and managing them as well (in this case Technology Services).

Step 2: The right capability must be identified to execute the plan

This might be a mix of internal capability, partners and other consultants but being clear on roles & responsibilities and having the right capability to:

• Deliver the required outcome

• Do it at a speed that is sustainable 

• Deliver the right outcome

Allow coaching and training so the team left behind after the project are upskilled and can do it without external help

Step 3: Flexibility to pivot, change direction & work some of the program out along the way is critical.

The original plan won’t work perfectly, the program needs to allow an element of flexibility when things don’t go to plan, you identify something else along the way.

Step 4: Sponsorship.

Strong sponsorship on the program. Executive sponsorship that is willing to go into battle will be critical. Absolutely critical. There will be roadblocks, issues that prevent the program moving and you need someone to move these out of the way and be focused on seeing the program deliver.

What we know from experience is?

All four steps are required to ensure effective execution. Things don’t always go to plan, but having a clear plan to be able to pivot or make changes in the program is critical. 

But just start, the team will see change, will embrace the change and lean it but just start the program, piece of work and get delivering. It will give you credibility, and the naysayers will go quiet or change their tune.

Making change, transforming and the building the new is hard. It’s harder than you think but it’s rewarding, fun and definitely worth the effort from an organisation to put the right leadership to deliver.

Get the delivery right is critical. Sometimes it’s hard to know where to start, but once you start you’ll get the momentum to keep going.

At Whiteark, we love helping companies execute their plans. Taking the strategy and what success looks like (goals) and building a roadmap and plan that can be delivered. We coach and help businesses set up their program with test and trial and an approach that works for them. Our goal is to ensure they can execute and that the capability in the organisation is developed to own the go-forward.

Are you measuring what matters?

If it’s not part of your KPIs it’s probably not worth measuring.

Most of us have heard the phrase ‘what measures gets done’. Sounds simple right? But when it comes to measuring what matters, it gets a bit tricker. 

There are many organisations that aren’t clear on what they should be measuring. An easy way to address this is by using my KPI scorecard – see the breakdown below.

1/ Alignment to Strategy

Ensure the metrics being measured align with your organisation’s strategy. For example, if you’re measuring organic traffic to your website but your strategy is all about driving leads via performance advertising, then this should be your first focus. 

Every KPI should have a measurable lead indicator. Sure, you can measure outside of this, but put your KPI measurements first and ensure they are adequately resourced before looking at anything else. 

2/ Set Targets

For each of the key metrics, set targets that are a stretch by achievable. These targets should align to a financial year; end of year target and monthly profile to deliver the end of year metric. 

Look at your baseline for last fin year and then consider the environment you’re operating in now and what kind of % increase you think can realistically be achieved. Talk to the relevant experts in the business and ask them to help form a plausible growth scenario. 

3/ Regular Measurement

When selecting what data outputs you’ll be measuring, get picky. There should be no more than 20 key metrics that a business reviews and measures each week. For metrics that aren’t performing; a detailed plan should be prepared for the next month to get the metric back on track.

4/ Refresh Your Metrics

Sticking to the same strategy all year isn’t always realistic. The beauty of measuring strategic outcomes each month allows for real time business decisions. This informed angle, means you can confidently pivot when necessary. If this is the case, update your metrics to align with these changes. And don’t forget to clearly document these changes and communicate them to the wider team. Especially those who are managing measurement.

TOP TIP
It’s important to note; while financial metrics are critical, non-financial metrics are also key drivers, working to align the overall vision and values of the organisation.

Stop Your Reporting

Once you’ve sorted your KPI scorecard, it’s time to take a step back. Most organisations have so much reporting that it doesn’t get reviewed or given the attention needed to make it valuable. This is a common problem and can also make the task of analysing data end up in the ‘too hard basket’.

So stop. Now that you have a clear idea of what you should be focussing on, everything else is just clutter. Put in place one weekly dashboard of the top 20 metrics that align to the business objectives. Provide performance and commentary for how each of the metrics are tracking. If you have a clear view on these, you’re much better off than measuring more but not reporting accurately. 

Need a Starting Point?

Whiteark can help. We have a network of experts with practical experience implementing metrics measurements that matter to organisations. Whether it’s advice or hands-on assistance, the Whiteark team are your go-to for valuable data analysis. Contact whiteark@whiteark.com.au or 1300 240 047 to discuss.

Happy End of Financial Year.

Happy end of Financial Year

– the clock strikes midnight on the 30th June…..Yipppppeeeeee.

I’m an accountant at heart, so 30th June is more exciting than New Years Eve. Why?

It’s a great opportunity to reflect. What have I achieved this year. What am I most proud of. What is my biggest learning. Who has supported me this year – make sure you say thank-you. I always encourage my teams to update their CV every year – what have they learnt, where have they developed it’s a good way to remember all your achievements as well.

It’s also a new beginning in some respects:

• New budget

• New goals / objectives

• New priorities

• New Funding 

• New Tax Year

There is an element in companies, where people need to wait until 1 July, until they can spend the money on the next project, phase or project or new recruitment. It’s kinda silly but you see how it happens as the funding aligns with the new financial year.

The new financial year, gives you a chance as a leader to reset with your team – to set them up on clear priorities, with clear goals and provide a chance for a reset, if things haven’t gone to plan in the old FY. Starting the year with clear priorities and goals is critical and defining what success is for the year for the company, department, team and individual. 

Getting some momentum at the beginning of the Financial Year is critical, for people to see the pace has changed, that energises the team and resets the expectation on how the team is going to operate. Finding some quick wins at the beginning of the financial year for the team is a good focus as a leader.

Measuring what matters, makes sense. Many companies don’t do this well. Starting a new financial year allows you to reset the priorities of the company and ensuring that you are measuring lead and lag indicators – not to many metrics but the right ones. Having regular reporting with these metrics is critical and ensures changes can be made as required / and quickly to change the course of the outcomes

So why I love the end of financial year:

• It’s a chance to reflect on the old year

• It’s a chance to reset the ways you are doing things for the new year to make it bigger and better

• It’s a change to set your team and organisation up for success

Are you ready for the new FY, the budget is approved:

• Have you defined your success metrics

• Have defined your reporting 

• Have you defined how you are going to operate

• Have you engaged your team on this journey

Happy Financial Year – from the Whiteark team.

How should we think about Complexity? Is it complicated?

Article written by Mark Easdown

Business Planning, Mental Models, Ways of Thinking & Working

“A complicated system is the sum of its parts. You can solve problems by breaking things down and solving them separately. In a complex system, the properties of the whole are the result of interaction between the parts and the linkages and the constraints. In fact, in a complex system how things connect is more important than what they are. So, the properties of that emergent pattern can never be decomposed to the original parts.” David Snowden

“The problem is complexity (in financial markets) …we cannot prepare for every thread of causality through every interaction; in the speed of the event we find there is no time to make adjustments.” Richard Bookstaber

“Nature likes to over-insure itself. Layers of redundancy are the central risk management property of natural systems.” Nassim Taleb

In the mid 1980s, a school of thought emerged around “Complexity” and “Complex Adaptive Systems” with the formation of the Sante Fe Institute, formed in part by former members of Los Alamos National Laboratory. The institute drew from multi-disciplinary domains and insights of : economics, neural networks, physics, artificial intelligence, chaos theory, cybernetics, biology, ecology and archaeology. Theories on Complexity and Complex Adaptive systems sought to develop common frameworks and understandings of physical and social systems that was an alternate to more linear and reductionist modes of thinking. Members sought to better understand spontaneous, self-organising dynamics and found examples in the;

• Natural World - Brains, Immune Systems, Ecologies, Cells, Developing Embryos and Ant colonies

• Human World – Political parties, Scientific communities and in the economy

Why bother?

Just say you and your team are facing a complicated problem, then you may break down the problem into component parts, build an expert team internally or partner with external consultants, you may take a data driven or fact-based approach, you may identify best practices create a strategic plan and solve the problem incrementally. However, is that all? Is there a one size fits all solution to problem solving?

What if your problem could be categorised with traits such as;

• Levels of uncertainty, ambiguity, unpredictability, dynamic interfaces - many diverse and independent parts that were interrelated, interdependent and linked through many interconnections into a network

• The properties of the whole cannot be predicted from the behaviours of the component parts, in fact the network of many components may be gathering information learning and acting in parallel in an environment produced by these interactions – the system co-evolves within its environment

• There may be significant political, social or external influences

“Wise executives tailor their approach to fit the complexity of the circumstances they face.” David Snowden & Mary Boone

Where in the real world might it be useful to have sound thinking about complexity and solving problems? 

In Project Management

Programs of work and problems to solve come in a variety of forms, at the simpler end of spectrum process re-engineering and best practices serve us well to achieve desired outcomes. Yet increasingly, our problems to solve are complicated, we need to analyse things to figure out what to do and cause and effect are distanced. Complex projects are harder still, they display behaviours such as self-organising, emergent properties, non-linear and phase transition behaviours. We need a different mindset, structure and strategy to wrestle with these problems.

In Financial Markets

These are complex adaptive systems, tightly coupled with unexpected feedback loops, with investors of different investment styles & horizons, the sum of the parts will not explain the whole in a linear manner, there are infrequent extreme price moves, not normally distributed.

In Nature

Complex collective behaviours are displayed when individual ants forage for food and lay down a pheromone trail on the way out from the colony and if successful finding food lay down even more on way back to the colony. Other ants follow this stronger pheromone trail to the food adding their pheromone. So, the pheromone trail becomes the whole colonies best path to food, it is an ant colony optimisation algorithm. Interestingly, this insight has helped form the basis of swarm intelligence and a wide array of solutions across routing and scheduling problems and bayesian networks.

 The twenty-first century will be the "century of complexity"  Stephen Hawking

COMPLEX PROGRAMS

“Strategy in complex systems must resemble strategy in board games. You develop a small and useful tree of options that is continuously revised based on the arrangement of the pieces and the actions of the opponent. It is critical to keep the number of options open. It is important to develop a theory of what kinds of options you want to have open” - John H Holland

In complex situations "cause and effect are only coherent in retrospect and do not repeat" - Sarah Sheard

Complex problems to solve are unique and they challenge some of the traditional approaches to program and risk management thinking, which may emphasise a need to identify risks in order to control them or completely plan and control programs of work. Examples of complex programs may include: computer systems and networks, buildings, bridges, planes, ships and automobiles.

Let’s take a look at what makes complex programs unique; 

• Sophisticated structures with many component parts interacting with each other, giving a degree of uncertainty whereby you may not know what you don’t know until it occurs

• Unknowable interdependencies across domains, a need for agility and structures that favour the decentralised and local to the centralised approach.

• There may be interfaces with complementary projects which present challenges in scheduling of these interconnected systems, teams and resources

• The environment may have a political realm where new government decisions or public policy arises

So, what is a desirable mindset for complex programs?

• A Forward focus, a willingness to proactively manage project development and critical issues through agility, collaboration and adaptability. You may need nuanced responses and local innovation.

• Analysis of likely origins of complexity and thinking through dependencies, seek critical junctions, vulnerabilities & countermeasures. Contingency planning around time, buffering on sequencing, budget and people skills 

• Dynamic reporting and monitoring, a willingness to pick up early warning signs and take corrective actions

• Communications will be dynamic, real time & high visibility (as small changes can have oversized consequences amplified by scale of some projects)

• Program planning may have both a single view and multiple integrated project schedules

Cynefin is a framework to deal with predictable and unpredictable worlds (David Snowden)

In 1999, David Snowden described a framework and problem-solving tool which helps to adjust management style to fit circumstances, and has relevance across product development, marketing, organisational design and BCP/DR and crisis management. The framework had 5 domains;

• OBVIOUS. Options are clear, steps to success are known, variables well known, cause-effect relationships are apparent, you are able to assess the situation, follow a procedure, categorise its type and base your response on best practice (processes & procedures) and feasible to achieve best possible result. Examples: Product mass production, cooking with a recipe, known scientific issues, known legal issues. 

• COMPLICATED. Solutions not obvious to everyone but most variables involved are well known, cause-effect relationships are apparent, you may assess a situation, build a diverse team or utilise experts to deliver the best response. The best that can be achieved is a good result, maybe not the best result. Examples: Existing product enhancements, coaching a team, adopting new approaches, hiring process.

• COMPLEX. The context is often unpredictable, many factors uncertain, many variables may intervene, data may be incomplete, it may not be possible to determine right options, make predictions or find cause-effect relationships, there may be multiple methods to address issues. Exploring what has a proven record in past situations, small tests or business experiments, simple guidelines, brainstorming, innovation and creativity may drive solutions. Examples: weather predictions, stock markets, poker, epidemic controls.

• CHAOTIC. The situation is where nobody knows what to expect, anything can happen, it is impossible to make predictions. You may have to act towards the urgent and important, then check and evaluate result before responding to that result and acting again. Examples: Innovate new products, anything which predicts people’s preferences or behaviours, crisis event and crisis management, warfare

• DISORDER. The situation is not known, you need to firstly move to a known domain & gather more information.

COMPLEXITY IN FINANCIAL MARKETS

“In the last few years the concept of self-organising systems – of complex systems in which randomness and chaos seem spontaneously to evolve into unexpected order – has become an increasingly influential idea that links together researchers in many fields, from artificial intelligence to chemistry, from evolution to geology. For whatever reason, however, this movement has so far largely passed economic theory by. It is time to see how the new ideas can usefully be applied to that immensely complex, but indisputably self-organising system we call the economy” - Paul Krugman 1996

“By one estimate, 90% of international transactions were accounted for by trade before 1970, and only 10% by capital flows. Today, despite a vast increase in global trade, that ratio has been reversed, with 90% of transactions accounted for by financial flows not directly related to trade in goods and services.” - Didier Sornette 2003

“Fundamental analysis seeks to establish how underlying values are reflected in stock prices, whereas the theory of reflexivity shows how stock prices can influence underlying values. One provides a static picture, the other a dynamic one.” - George Soros

Financial markets have all the basic components of complex adaptive systems, namely:

• Investors have differing investment strategies and horizons from trading at the speed of light to long term cyclical horizons. They take external information and combine it with their own strategic intent and these compete in financial markets => this is adaptive decision making

• Financial markets is the aggregation of large-scale collective decision making and actions => these are developing, complex and emergent

• Financial markets exist in a non-equilibrium state , are non linear, they experience non-frequent extreme price moves with the aggregate behaviour more complex than would be predicted by the sum of the individual parts.

• Financial Markets are subject to feedback loops, where the result of one iteration becomes an input of next iteration

So, how has the emerging knowledge of complexity and financial markets framed regulators thinking?

The global financial crisis highlighted the complexity, leverage, inter-connected and tightly coupled of financial markets. In response we have seen;

• Efforts to reduce interconnectedness (intra-day local trading halts, regional collateral exchanges)

• Enhanced capital rules (increased contingency buffers and incentives for some activities to be managed by non-bank sector & efforts to reduce concentration of risks)

• Enhanced liquidity rules (increase quantum and quality of contingency buffers)

• Speed, agility and quantum of central bank and treasury initiatives to address market panics and crisis

• A re-think of the rule-making complexity and mental models applied to finance;

“Modern finance is complex, perhaps too complex. Regulation of modern finance is complex, almost certainly too complex. That configuration spells trouble. As you do not fight fire with fire, you do not fight complexity with complexity. Because complexity generates uncertainty, not risk, it requires a regulatory response grounded in simplicity, not complexity. Delivering that would require an about-turn from the regulatory community from the path followed for the better part of the past 50 years. If a once-in-a-lifetime crisis is not able to deliver that change, it is not clear what will.” - Andrew Haldane Bank of England Speech 2012 “ The Dog and the Frisbee” [https://www.bis.org/review/r120905a.pdf ]

COMPLEXITY IN NATURE 

In her TED Talk, Deborah Gordon: The emergent genius of ant colonies: highlights an example of a complex adapative system with no central control or management in an ant colony: [ https://www.youtube.com/watch?v=ukS4UjCauUs]

So, what is the strategy of the ant colony to constantly adapt to its complex environment? As per Deborah Gordon studies;

• The ant colony allocates simple roles

  • At any given time 25% are patrolling, foraging and doing maintenance, 25% are inside with queen ant doing maintenance and looking after larvae, and finally 50% appear to be contingency and in reserve, able to surge as required to collect more food, patrol or more maintenance.

  • Communications are not centralised, they are dynamic, simple and local rules to adapt to emergent environment

  • The process is noisy, messy, imperfect and requires individual dynamic communications

Ant colonies can learn at the individual level by trial and error over many generations but this can nurture collective memory and problem-solving skills. The local instructing the central.

“So, the key to unlocking the efficiency of a leaderless system will rely on, among other things: clear role definition, flexible task allocation, a sense of responsibility toward the group, and shared understanding and response to communication patterns. Organizations would need to make an incredible investment in their employees, and vice versa.” Amanda Silver – Organising complexity – How Ant colonies self-manage. [https://medium.com/swlh/organizing-complexity-how-ant-colonies-self-manage-50455358f3cd]

How we should think about complex domains is still evolving, a multi-disciplinary lens across research and practice has been adding to this knowledge pool for decades. It is a vital enquiry for humankind, especially as our challenges become more complex to solve and our climate is as a complex adaptive system.

‘“he climate is a common good, belonging to all and meant for all. At the global level, it is a complex system linked to many of the essential conditions for human life.”- Pope Francis 2015

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LOOKING TO CURATE YOUR BUSINESS STRATEGY? REACH OUT.

Whiteark is not your average consulting firm, we have first-hand experience in delivering transformation programs for private equity and other organisations with a focus on people just as much as financial outcomes.

We understand that execution is the hardest part, and so we roll our sleeves up and work with you to ensure we can deliver the required outcomes for the business. Our co-founders have a combined experience of over 50 years’ working as Executives in organisations delivering outcomes for shareholders. Reach out for a no obligation conversation on how we can help you. Contact us on whiteark@whiteark.com.au

Article written by Mark Easdown

The life of a CFO – how to thrive

The CFO role is not an easy one - there is a real struggle between short term financial objectives and long-term strategic outcomes. Both are very important but need to be balanced.

Getting your priorities right will ensure you thrive and not just survive which ultimately is the goal for every organisation. 

While there is a lot to do, I have narrowed down 5 key priorities that any CFO can apply to their role.

The key 5 priorities of a CFO

1.         Financial Governance

Focused on financial governance through month-end, balance sheet reviews and working capital management. This eliminates any surprises during an audit. Building a robust process for accurate and timely reporting and forecasting so that good decisions can be made in a timely manner. This creates confidence with regulators and auditors.

2.         Optimise the financial position

A CFO is expected to proactively manage and optimise the financial outcome. This requires good forecasting ability, business partnering and the ability to make good commercial decisions.

Work through strategic and operational strategies to optimise the financial position of the company by:

o   Actively focusing on working capital management

o   Actively managing investments including cashflow timing

o   Actively managing government rebates, tax benefits and obligations

o   Actively managing strategies to deliver financial outcomes both short term and long term

3.         Alignment to strategy

The CFO must work closely with the strategy department to ensure alignment between long term strategies, priorities and the 3-5 year business plan and associated financials. This clear linkage is critical to ensure it all hangs together and will give confidence to the board. The CFO must work through the linkage to ensure key metrics are measured and tracked to ensure lead indicators for managing the success/delivery of the strategy. 

4.         Holding the business to account

As the CFO it's your job to hold the leadership team and the organisation to account on expenditure, investment, key metrics and achievement of the plan. You must do regular call out of results and ensure you hold the business to account.

5.         Building an exceptional team

The quality of the finance team is paramount and ensures the business has the commercial support for decision making. The role of the team to provide insights and business partnering is critical to ensure the Executives and others in organisations have the support to make good commercial decisions.

The CFO role is not easy, but it is enjoyable and rewarding helping the organisation navigate through strategy and financials and measuring success while having the confidence of the regulators and auditors. There is always a lot to do - so focusing on your top 4-5 priorities.

“Measurement is the first step that leads to control and eventually to improvement. If you can’t measure something, you can’t understand it. If you can’t understand it, you can’t control it. If you can’t control it, you can’t improve it.”

— H. James Harrington

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At Whiteark we have hands on practical experience to help CFOs navigate and set their company up for success, whatever is the challenge. Please reach out for a no obligation conversation.

Whiteark is not your average consulting firm, we have first-hand experience in delivering transformation programs for private equity and other organisations with a focus on people just as much as financial outcomes.

We understand that execution is the hardest part, and so we roll our sleeves up and work with you to ensure we can deliver the required outcomes for the business. Our co-founders have a combined experience of over 50 years’ working as Executives in organisations delivering outcomes for shareholders. Reach out for a no obligation conversation on how we can help you. Contact us on whiteark@whiteark.com.au

Return on investment

Return on investment is an overused phrase but an underused concept in business.

What return are you going to make for that investment? What is the payback period and how confident are you on the return?

Say a company can only afford to spend $20 million on investment each year how does it decide what to invest in?

Key criteria

•    Is the investment aligned to strategy?

•    What are the benefits of the investment?

•    What is the payback period for the investment?

•    What metrics will the investment improve?

•    Are there ongoing financial benefits of the investment?

I am a big believer in working out where your investment will give you the biggest return. If measured correctly, more money can be invested if there is a clear ratio of investment versus return on investment. 

Making good investment decisions will be critical to the success of any organisation especially during the current environment so take the time to consider:  

•    How much money you can invest?

•    What's your criteria for investment?

•    How are you going to track benefits?

•    How and who will you hold to account?

Somehow when people get project money, they forget it's cash out the door - it’s real money, it's costing the company. While there are financial reporting, tax and other benefits of consideration when investing, don't forget you are outlaying cash. Spend what you need to deliver the outcome / return on investment.

Post Covid-19, companies need to be very focused on where they spend their money and payback period. If the pay period is longer than 3 years, leaders will need to consider if it's a good investment.

How do you think about return on investment in your company? Does it need a review? Is your payback period more than 3 years? Maybe you need to reconsider.

“The biggest room in the world is the room for improvement.”

— Helmut Schmidt

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Do you need to assess the ROI in your business and make some changes? Let us help.

Whiteark is not your average consulting firm, we have first-hand experience in delivering transformation programs for private equity and other organisations with a focus on people just as much as financial outcomes.

We understand that execution is the hardest part, and so we roll our sleeves up and work with you to ensure we can deliver the required outcomes for the business. Our co-founders have a combined experience of over 50 years’ working as Executives in organisations delivering outcomes for shareholders. Reach out for a no obligation conversation on how we can help you. Contact us on whiteark@whiteark.com.au

Obsessed about business optimisation

Optimisation is an overused word that can mean a lot of things, so let me explain... can a business perform better than they currently are? Can they improve customer experience, their pricing strategy and financial outcomes to drive a better return? In most cases the answer is yes!

I'm that person at the cafe that worries about how the owners are affording to pay all their staff (overstaffed), that nail place that isn't charging enough to make ends meet, the tradie that doesn't make me pay when the service is done but a month later, the discounts in the department stores, the amount of stock on the shelves and the cashflow management of companies.

The COVID period has shown us that companies need to be:

• More efficient

• More commercial

• Focus in on cashflow more

• Get the pricing right

• Focus in on customer experience

Small, medium and large businesses all have areas that they can improve. Research shows that business optimisation can improve the financial performance of your company by 21%+.  

Business owners and leaders need to focus on business optimisation. What are the 4-5 things that will move the dial for your business?

Cashflow optimisation - maximising your working capital through tactical and strategic levers. Are you putting enough focus on this?

Pricing rationalisation - are you charging enough for your product and service and how you do compare to your competitors? 

Strategic sourcing - are you strategic around how you manage your vendors to drive cost improvements and working capital outcomes? 

Process optimisation - improve process efficiency and effectiveness by reducing complexity in the process. 

Property management - lease costs cost approximately $10-12k per person per year. With the new ways of working and companies adapting to remote working, review your lease arrangements and assess whether your company really needs all that space. Can you sublet the space or hand it back to the landlord? Many companies are considering other options in relation to rental space. Are you?

One way to really reset the cost base of a business is the zero-based budget. Read our recent Whiteark article that explains why, how, and when you should use this technique. With a focus on what money is spent on and the return on investment including dollars and time to recover cost outlays, you can significantly change your cost base.

“If I had one hour to save the world, I would spend fifty-five minutes defining the problem and only five minutes finding the solution.”

— Albert Einstein

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Do you need to create a business optimisation plan? Let us help.

At Whiteark we have professionals that have practical, hands on experience on how to optimise business. Understanding every business is different and there is no one size fits all but we would be very happy to have a no obligation conversation around your business optimisation plan. Our co-founders have a combined experience of over 50 years’ working as Executives in organisations delivering outcomes for shareholders. Reach out for a no obligation conversation on how we can help you. Contact us on whiteark@whiteark.com.au