Wrong approach, predictable outcome

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It has been a while since something has bothered and perplexed me that much. Recently I have been involved in a lengthy recruiting process for an important and challenging role as a senior executive.

The role as such is a challenging and very interesting endeavor, it implies business restructuring, reorganization and a lot of work. So in one word the role is interesting but challenging and involves a lot of personal sacrifice.

The recruiting process

It started somewhere 8 months ago with an urgent request to meet because the project is kind of urgent and they want to have the person on-board asap. Been there had a nice pleasant discussion and left with the “we’ll get back to you asap”.

After ~ 6 months of still no feedback until suddenly, the project is urgent again. I went there again to have an interesting, nice meeting with one of the shareholders that seemed down-to-earth and straight to the point type of guy.

During this entire time the discussion was, we want to know you and to see how you can bring value to our business. Up to this point the discussion has been rather normal, they want to see if you fit their organization. Keep in mind we are talking about a TOP MANAGEMENT recruiting process. Their statement was we want the best possible executives for our business.

The do’s and the don’ts

When we’re talking about professional TOP MANAGEMENT recruiting you have to present and deliver the best possible business behavior, no lack of communication, no rescheduling, no being late during scheduled discussions, no nothing that can put you in a bad light.

The most important aspect is to communicate adequately with your potential candidates, the candidate does not have to ask you if the project is still alive and he is still a valid candidate in the selection process.

One more very important thing, please do not forget that the economy is not in it’s booming phase where recruiting is not an issue. The 21st century economy is transforming itself slightly into an gig-economy. Considering this please keep in mind the following:

  • good people are hard to find
  • good people are not cheap to get nor to employ
  • the salary is not the only discussion point, the total benefits package is
  • work-life balance is very important for top executives, especially for GenX executives (more details here )
source : https://www.thebalancecareers.com/common-characteristics-of-generation-x-professionals-2164682

The outcome

The recruiting process was heading towards its end with me agreeing to almost all conditions and requirements. Until this moment I was under the impression of a one-way discussion, with me not being really able to tell my demands and requirements.

I could reduce everything to one request , that could transform this process into and win-win and not into an win-loose. I requested some flexibility towards the entire process, that was strongly denied

My position was and still is that I don’t risk everything that I have today for something that might be and that I have no control whatsoever.

So after being shot down due to no flexibility from their side, my question is how urgent and how important is the recruiting process for this top executive role ?

It appears that even though we are in the 21st century physical workplace presence is more important than getting things done.

To wrap it up, the company has started a new lengthy recruiting process for the same TOP MANAGEMENT role, again very much time and resources wasted, formal is more important than getting things done.

To wrap this post up , this kind of an approach I have witnessed many times during my consulting missions.

Dear shareholders, equity funds, stakeholders

don’t just talk the talk, please do also walk the walk.

Research papers

The summary of my published research papers can be found at the links below: 

 

Research paper : Management Accounting as a Knowledge Based Organization Value Driver for the 21 st Century Business

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A published paper on management accounting and knowledge based organizations can be found here on ResearchGate.net

https://www.researchgate.net/publication/318792456_Management_Accounting_as_a_Knowledge_Based_Organization_Value_Driver_for_the_21_st_Century_Business

Abstract

The 21st century information and information technology revolution has made its mark on classical business functions like business support services. Management accounting, a still young business activity has transformed from reactive cost determination focus to proactive value creating and considerate resource business driver. Management accounting is on the way to asserting itself as a proactive business value driver for the modern 21st century business organizations. The present paper is presenting the arguments that support the transformation of management accounting from the “bean counter” score keeping role to value driver supported by knowledge, the prime commodity of the 21st century business environment. Management accounting is the business partner that delivers reliable and accurate data and information for the business decision process that is more and more influenced globalization, internationalization and accelerating and dynamic markets. Can modern companies afford to disregard the dormant value drivers from within their own business organization?

Research paper : Economic Value Added – A General Review of the Concept

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A published research paper on EVA

Full text can be found on ReseachGate.net here

https://www.researchgate.net/publication/318792542_Economic_Value_Added_-_A_General_Review_of_the_Concept

 

Abstract

Business organizations of the 21st century, a century driven by globalization, internationalization and speed, must compete on changing and evolving markets. One of the main goals of every business is to create value for its shareholders, value that is generated by the proper usage of existing resources. The notion that can be utilized to successfully illustrate the increase in economic value is the economic value added concept.. The Economic Value Added concept known also as EVA is an add on to value, value based management and economic value.. EVA is a method and a tool for quantification and measurement of the value created by a business organization

Research Papers 2016

Last year I have published some academic research papers. The links and the abstracts to the research papers can be found further below.

Value theory and value – based management 

published  also at

https://www.researchgate.net/publication/308795444_AN_EMPIRICAL_VIEW_ON_VALUE_THEORY_AND_VALUE-BASED_MANAGEMENT

Abstract 

The main economic purpose of a business organisation is to create value for its owner. The value concept is a complex notion that has developed alongside human history and reflects the concerns of human society through time. As a result of the value theory, the management of value has also emerged as an essential and accompanying activity. Value-based management emerged as a management philosophy rather than a management method. It consists of a change in mindset from managing resources or output quantities to value creation. The challenge is to identify or create the value flows and act upon these within the specific business organisation to have proper value management. Value creation and value management will define the business organisations in the economy of the 21 st century, which is governed by knowledge and information. The present paper focuses on the history and development of the value concept and the history and development of the management of value through value-based management.

 

 

Outsourcing CFO activities as a competitive advantage 

published  also at

https://www.researchgate.net/publication/312173400_OUTSOURCING_CFO_ACTIVITIES_AS_A_COMPETITIVE_ADVANTAGE

Abstract

Traditionally companies focus on their core competencies when talking about efficiency and increase in performance. To achieve a certain aid of performance and make resources and knowledge available companies turn to outsourcing in traditional form and to strategic knowledge outsourcing. Can the support services / non–core activities be a successful driver of innovation through outsourcing? This paper is trying to show that the outsourcing of non-core activities can be a driver and alternative towards innovation and competitive advantage that can make a difference in the today’s complex globalised markets

 

 

 

Empirical approach to knowledge, knowledge economy and knowledge based organisations ( page 209 )

published also at

https://www.researchgate.net/publication/312173621_EMPIRICAL_APPROACH_TO_KNOWLEDGE_KNOWLEDGE_ECONOMY_AND_KNOWLEDGE_BASED_ORGANIZATIONS

Abstract

Since the very early stages of human development knowledge, knowledge management have made a difference in who is prevailing and who is not. Driven by the information technology revolution of the 20st century knowledge and especially knowledge management within the establishing knowledge society and knowledge based economies have kicked off a major transformation of classical economical concepts. Economists started to rethink and transform the classical resource based economic theory towards information and knowledge based economy. The 21st century is dominated by the most effervescent transformations of human society. Information and information management through information technology has changed the way business organizations are developing and act and react to the globalized market and competition. The key to success is rapid assimilation and management of information and development through proper usage of accumulated knowledge that is leveraged by increased amounts of new information. There is a decisive transition from the classical economy of the 20st century based on resources towards the next level of economic evolution, towards knowledge based economy. In a knowledge based economy the main commodity is information and knowledge, the classical economy is only a subsequent result of the proper management of knowledge. The key defining concepts of the 21st century are information and knowledge that have had a major impact on business organizations all over the world. Business organizations have to redefine their strategies and their values in order to assure their competitive advantage in the increasing fast moving global market place

Why you should or not consider to outsource your CFO ….part 2

Recently I was talking about the idea that businesses need to reinvent themselves and to be very
creative in order to assure their success.

Because of the scarceness of  resources for business ( you never have enough of what you need ) why not go for the outsourcing option.

The outsourcing of topics like Customer Care , Call, Centres, IT , Tech Support, etc  is a very common and widely accepted topic.

What about the outsourcing of your CFO function ?

I am using the term CFO for a senior finance professional or executive

To get a clear answer about this potential , partial or complete outsourcing of your CFO function you must first clarify the following essential aspects:

  1. Do you know what a CFO is doing ? What is the role of the CFO in an business ?
  2. Do you as a business owner realize that your business has grown and that you need a something or somebody to help you more with your business numbers ?
  3. Are you ready to empower and trust somebody to take care about a part of your business ? 
  4. Do you want to move on further with your business ?
  5. Do you want professional help and support for your business support services ?

If the answer to all of the above is YES then definitely you are ready for the outsourcing of some of your support services.

1-st step before going further with this outsourcing is to ask yourself what do you want for your business and what do you expect from an outsourced CFO .

1.1 What do you want for your business ? 

Well this is pretty obvious you might say , you want to develop your business .
This is all fine and fair , the only thing is that you might want to grow in a way that you are certain that you can count on the healthy growth of your business.
This kind of a growth is not easy to manage
…you are right when you say growth is growth ergo it is OK.

Well not really , you must grow in a consistent way and not too fast. The growth rate of your business must be in sync with the rate that your organization can adjust and accommodate the growth.

Consistent growth means that you have to have a pretty good ideea about your business on at least mid term if not long term.  From the CFO perspective this would mean that you have a strategy that will grant you some predictability and easier planning.

1.2  What can you expect from an outsourced CFO

For sure you can not expect , OK small correction , you should not expect that you got rid of your problem, the healthy growth of your business.  It is still you business and you are still in charge and fully liable about what your doing.

This outsourced CFO function can give you as a business owner the breathing space to focus on the actual business development like promoting sales, developing your product and/or services, hire/fire your staff, etc . Don’t worry you still have a lot of things to do ….

From your outsourced CFO you should have at least this benefits :

  1. consistent and clear image of your business results (OK, partially this can be received also from your accountant ) 
  2. “translation” of your financial statements in business terms , not accounts, balanced / unbalanced accounts , formal things , tax statements ( some accountants provide to their customers some of the “translation” but not the complete view ) 
  3. based on  the financial statements the CFO should be able to project / adjust / validate your defined strategy 
  4. you should get a clear and concise cost monitoring system setup 
  5. benefit from your CFO’s experience …that should be at least 10 years in various organizations and business models
In this post will not address the topics who needs CFO services , why CFO services, what services can you actually get  because these have been discussed in previous posts.
My view on CFO services can be found also here . 
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