Most finance chiefs are familiar with the phrase a recent article by McKinsey refers to as, “the CFO conundrum.” Put simply, it often seems like there aren’t enough hours in the day to both run a buttoned-up finance department and be the CEO’s strategic thought partner.
McKinsey partners Ankur Agrawal and Matthew Maloney, associate partner Meagan Hill, and senior expert Abhishek Shirali offer several pointers for CFOs looking to unlock some time.
“How,” the authors write, “in the face of the enormous complexity of pressing and even competing demands, can they establish the credibility to have other senior leaders view them as the de facto ‘deputy CEO’? If only they had more time, they could be that kind of CFO.”
Here are five time-saving strategies for CFOs:
1. Crystallize your strategy — and identify where technology can be an enabler
Consider how much the small details you attend to actually matter to executing company strategy. With respect to those that do matter, consider what systems could be “radically improved [or] thoroughly automated.”
The best CFOs ask “elemental questions” about core strategic issues, such as identifying new sources of growth and realizing the highest risk-adjusted returns for company capital, the authors say. They also “understand key pain points, analyze and align their organization’s incentive structure, and assess current capabilities, particularly IT systems and tools.”
2. Focus on big moves
“One of the most consequential ways to get rid of little things is to focus on what’s big,” the authors write. McKinsey research has found that leaders get better results — on the top and bottom lines alike — when they focus on the “whole” something rather than the sum of its parts. “Incrementalism demands a lot of effort, but it won’t unlock major change.”
Hallmarks of “big moves” could include results like a company improving to the top, say, 30% of its industry in gross margins, SG&A productivity, or labor productivity.
3. Radically simplify
McKinsey notes that even at smaller companies, finance departments may have hundreds of reports for employees to fill out. Often, the information is duplicative — or worse, not connected to strategy.
“Duplication also extends to an employee’s responsibilities and roles,” the authors write. “The same task, with some variation, can be the responsibility of multiple people.” Effective CFOs save time by mapping out roles and responsibilities and keeping their teams focused on creating value.
4. Keep up the tempo
Finance can be hectic and intense at times. The best CFOs save time by building tools, reports, and calendars that enable agile change.
“This starts with the basics of performance management, including standardized templates, clear action items, and targeted outcomes that are regularly updated to track progress,” McKinsey says. “CFOs and their teams should have a standardized playbook outlining key questions to evaluate actual and forecasted results.”
5. Overcome cultural inertia
Some of the biggest “time sinks” are human biases, including risk avoidance and loss aversion. CFOs should be clear about priorities, “rather than getting sidetracked by glamour projects or, even worse, relegating the strategic plan to being just one more item on their to-do list.”
Further, McKinsey advises, CFOs should not waste time trying to achieve consensus. “The most effective leaders frame strategy around major choice … and relentlessly prioritize.