Organizational restructuring may be necessary for a business to stay competitive, especially in the face of rising inflation and the threat of recession. Chief Financial Officers help businesses understand the financial implications of operational decisions, and more specifically, which operational decisions are required to improve their overall financial position.
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To be a successful CFO, you need the right team, and sometimes, that entails restructuring the team of qualified individuals you already have to ensure they’re in the right positions to help the business succeed. In the blog below, we’ll walk you through 4 of the core ways a strong CFO can realign their team to support a business that is recession-proof.
Identify and realign with your overall strategic business objectives
In today’s business landscape, the role of the CFO is constantly evolving. One of the most important tasks for any CFO is to identify and realign with the organization’s strategic business objectives. This can be a challenge, as businesses are constantly changing and growing.
However, to be successful, it is essential to effectively restructure the team’s operations if they do not align with the organization’s business objectives. By aligning the team with the organization’s business objectives, the CFO can ensure that the team is putting its resources in the right places and making decisions that will help the business achieve its goals.
In short, if a CFO wants to be effective in their role, they need to identify and realign their team (if necessary) with the organization’s business objectives.
Identify where your organization is spending most of its time and resources
CFOs identify where the organization is spending most of its time and resources. As the person responsible for an organization’s financial health, the Chief Financial Officer (CFO) must constantly be on the lookout for ways to improve efficiency and cut costs. One way to do this is to identify where the organization is spending most of its time and resources.
By understanding where the business is using its resources most efficiently, the CFO can make strategic decisions about where to allocate resources to achieve the greatest impact. In many cases, restructuring the team’s operations can be an effective way to improve efficiency and save money.
The 80/20 rule, also known as the Pareto Principle, is a management strategy that states that 80% of outcomes can be traced back to 20% of causes. This simple concept can be applied in a variety of ways, but it is often used by CFOs to identify areas where small changes can lead to big results.
For example, let’s say a company is hoping to increase profits by 10%. The 80/20 rule would suggest that 80% of that increase will come from 20% of the company’s activities. Therefore, the CFO may choose to focus on those activities and make small improvements that can have a big impact on overall profitability.
While the 80/20 rule is not an exact science, it is a valuable tool for decision-makers who are looking to maximize results with limited resources. By identifying the areas where they can have the biggest impact, CFOs can ensure that their efforts are focused on the right places and that their company is getting the most bang for its buck.
For example, if most resources are being spent on administrative tasks, it may be beneficial to hire additional staff or outsource these activities. Alternatively, if most of the organization’s time is being spent on development and marketing, it may be necessary to reallocate resources accordingly. However, it is important to note that every business is different, and what works for one organization may not work for another. As such, it is essential for CFOs to tailor their approach to each individual business to achieve the best results.
Build a culture that supports your new way of working
CFOs build a culture that supports their new way of working. In doing so, they let go of processes that no longer serve their business’ strategic goals.
CFOs today are under immense pressure to not only control costs but also to drive growth and profitability. To meet these conflicting demands, CFOs need to radically rethink their role within the organization. They need to become leaders who can inspire and motivate their teams to achieve results.
One of the best ways to do this is to build a culture that supports their new way of working. This means letting go of outdated processes and procedures that no longer serve the business’ strategic goals. It also means creating an environment where employees are encouraged to take risks, experiment, and innovate. By building such a culture, CFOs can set their organizations up for success in the years ahead.
Build in measures of success to know if you’re staying on track
CFOs need to build in measures of success to know if they are staying on track in business operations. It is their responsibility to create goals and objectives for the company, and part of this is knowing how to measure success. Without these measures, it would be difficult to justify spending or adjusting business practices.
CFOs need to have a clear understanding of what metrics will be used to determine whether the company is on track. This includes financial measures, such as profitability and cash flow, as well as non-financial measures, such as customer satisfaction and employee retention. By taking the time to identify and track these key indicators, CFOs can ensure that they are making the best decisions for their company and achieving long-term success.
The decision to restructure should never be taken lightly, but in the face of inflation and an impending recession, it’s important to prioritize strategic goals. As we dive deeper into uncertain economic times, preparedness is paramount and the key to long term success is staying closely aligned with your strategic business goals.