newCFO » COO http://newcfo.com CFO 2.0 for a 2.0 business world Tue, 26 Aug 2008 21:39:50 +0000 http://wordpress.org/?v=2.9.2 en hourly 1 Memo to the CEO: Fire your CFO! And your COO, CMO and CTO/CIO as well http://newcfo.com/cfo/memo-to-the-ceo-fire-your-cfo-and-your-coo-cmo-and-ctocio-as-well.html http://newcfo.com/cfo/memo-to-the-ceo-fire-your-cfo-and-your-coo-cmo-and-ctocio-as-well.html#comments Sat, 02 Sep 2006 13:07:03 +0000 lorenzo http://newcfo.com/?p=72 Is your company valuing activities over results? BOTH is not a valid answer.

If your actions reward activities, you’ve got a problem, too many people spinning too many wheels, while you are going nowhere.

I don’t mean to pick on cab drivers but . . . If you take a cab during a slow day, in a city that you don’t now, and you ask to be taken to the airport, will you be given the tourist ride of the city and surroundings, and will you be driven expressly to the airport? The cab driver’s interest is in having the meter running for as long as possible. What if you change the rules of the game, before getting into the cab you ask: how much will it cost to get to the Airport? Somewhere between 40 and 50 dollars. What if you offer the cab driver 60 dollars to get you to the airport in as little time as possible, safely and respecting all the traffic regulations?
Now the cab driver has a vested interest of earning that $ 60 in as little time as possible.

What if you selected an handful of mini CEOs to delegate to:

  • CEO of Finance (formerly known as CFO)
  • CEO of Operations (formerly known as COO)
  • CEO of Revenue (formerly known as Chief of Sales/Marketing/Advertising/Branding)
  • CEO of Information (formerly known as CTO/CIO)

Make sure you do NOT assign ONE person the STRATEGY function, it is too Strategic to be left to the CSO or CEO of Strategy, and do NOT have a CTO or a CEO of Technology, Technology is a mean, Information is the end game.

Why call them CEOs? Because within the Vision of the company, each mini-CEO has a mission to accomplish. Make it clear to quantify what the goals of the mission are; make sure to give them resources (time, money, people & infrastructure), and demand a plan in return. Call it the game plan, or action plan, but please, don’t call it business plan, too boring. Measure progress against the game plan on a weekly basis (executive committee is not optional and it’s not a waste of time) and demand to be informed of major issues on a timely basis. Be available to help with your influence and resources, and to shield them if necessary. Then step back, try to NOT overstep their mandate, don’t give in to the temptation to overrule their day-to-day decisions to play “nice CEO”, let it flow. It’s the end results that count, not the individual actions. Of course you always have the option to fire their sorry derriere if there’s no performance! We are talking about mini-CEOs here, there’s no time for corrective measures, training, development, it’s show time, it’s where the rubber meets the road.

]]> http://newcfo.com/cfo/memo-to-the-ceo-fire-your-cfo-and-your-coo-cmo-and-ctocio-as-well.html/feed 0 The high cost of complexity http://newcfo.com/cfo/the-high-cost-of-complexity.html http://newcfo.com/cfo/the-high-cost-of-complexity.html#comments Fri, 01 Sep 2006 21:37:00 +0000 lorenzo http://newcfo.com/?p=69

Sure if you take something simple and you complicate it, it will make you look smarter in certain circles: it’s called bureaucracy & red tape. But . . . is there a cost associated with complexity? You bet your P&L that there is, it’s hidden away in such items as: training, development, temp staffing, overtime. If you really simplify and streamline, you will find that you’ll need less people on staff, therefore less furniture, therefore less office space. You will have a WOW! moment.

How to check the cost of complexity: outsource your operations. I am not talking about hiring contract workers or consultants in lieu of employees, I am talking about finding an outfit that will take over your operation on a pay-for-action basis, where the bulk of the cost is directly related to the number of tasks to be performed.

If you work with someone who has been in the business for a long time, they are masters at algorithmizing your business. Algorithmize: I just made this word up, signifying breaking down your operations in step-by-step procedures. If your operations are loosely based on principles, but relying on one-offs solutions on a continuous basis, with so many exceptions and “what ifs” that the related documentation fills heavy tomes, and the flow charts resembles more a Jackson Pollock painting than a Mondrian.

Start with your business model. Can you explain it to your mom by using only a marker and ONE cocktail napkin? Two is OK, but if you need three and your mom doesn’t get it, you are in trouble. What about your hierarchy? Do you have more chiefs than you have workers? Can the people in Customer Service explain to you in 30 seconds or less what it is that they do? It’s hard to let go of (bad) habits, it’s easy to make exceptions for the sake of “flexibility”.

Leadership decisions are the hardest to make, and the hardest decisions are the ones that will allow your company to reap the greatest benefits.

Make sure you have the vision to discern simplicity from stupidity, and that you have the change in you, that you believe in it, that the change is a natural extension of you, not an item to check off in your to-do list. Authenticity is one of the pillars of change.

Simplicity is a simple way to attain a competitive advantage.

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