6 Areas CFOs Should Support to Build Business Resilience

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Small business CFOs and their organizations continue to be challenged. In the best of times, small and medium-sized businesses (SMEs) work on tight budgets and often struggle to balance their cash flows. Now supply chain issues, inflationary pressures and talent spurred on by great resignation make gap times even more difficult.

But challenge and opportunity go hand in hand. As CFOs, we are known for our ability to analyze complex business problems, solve problems, think strategically and deliver results. By leveraging these capabilities and our “big picture” approach, we can support cross-functional partners in their decision making.

Being resilient means being able to bounce back quickly or adapt to difficulties or change. During the first wave of COVID-19, most organizations were resilient and quickly transitioned their teams to be fully remote. Since then, the ongoing pandemic and deteriorating economic conditions have taken their toll. Nonetheless, some SMEs have been able to survive and even thrive despite adverse conditions.

Although there is no standard formula, truly resilient companies exhibit visionary leadership, business focus, and people-centric cultures. And according to a new Institute of Management Accountants (IMA) report, Thriving Amid Change: A Guide to Small Business Resilience, these elements of flexibility are critical to the success of any organization.

Do you have a vision?

What are the vision and strategic goals of your company? Are they clear? And are they shared across the organization, from the CEO to the shop floor?

Having “grown up” in a large, publicly traded company, I experienced strategic planning and annual budgeting as part of an ongoing routine. At best, processes lead to breakthrough ideas on how to better meet consumer needs and run businesses more effectively, thereby creating economic value. Some ideas focus on a specific business area, e.g. B. the development of new products. Other ideas have been company-wide, defining ambitious sustainability goals, or creating a company-wide shared service center that includes finance, human resources, supply chain, and other services.

Although there is no standard formula, truly resilient companies exhibit visionary leadership, business focus, and people-centric cultures.

Now that I’m the CFO of a small company, I’ve found that many SMBs don’t have a clearly articulated vision, at least one that isn’t understood and shared by all organizations.

Whether strategic planning is an established process or a new endeavor, now is a good time to engage cross-functional partners in deeper reflection and business realignment. Facilitate a working session to better understand the company’s strengths and weaknesses, conduct research to better understand industry trends and market needs, and determine your overall objective.

business focus

In addition to providing visionary leadership, highly resilient companies need to rethink every aspect of their business, including these six key areas:

  1. Customer relationships. You need to know your customers to meet their needs and adapt to changing needs. But it’s gotten harder to build meaningful relationships based on trust (regardless of whether the deal affects you, your customers, or both) amid large layoffs. Consider prioritizing accounts and assign an account manager to each higher priority account.
  2. Product Offerings. Analyze business areas and specific products to determine profitability, identify what to boost and what to reduce. Use cost analysis and benchmarking to ensure products are priced fairly. And do your research to determine what the market is seeing relative to your current offering.
  3. supplier relationship. Have you been long-term with your current banking partner, liability insurance broker, employee benefits advisor, 401(k) plan administrator, outside CPA firm, or other service provider? If so, do they still value your company or do they take you for granted? Consider evaluating options and beginning a formal request-to-offer process for all key services.
  4. organizational structure. Is your organization “fit for purpose” based on its current vision and strategic plan? If you make a major change in strategy, you should consider reporting a new line of business directly to the CEO, which demonstrates the importance of the change.
  5. performance reporting. In order to make informed decisions about inventory, operating expenses, hiring, capital investments and other areas, management needs a clear view of financial performance. Even if your reporting is timely and accurate, are you providing the right insights and analytics to drive the business? For example, if you recently expanded globally, do you provide analysis by country or region? Or are you still setting the budget and presenting the results as an aggregated group?
  6. talent management. Identify deficiencies, provide appropriate training and hire new resources as needed. And use great resignation to reassess staffing. For example, perhaps there are advantages to outsourcing the IT helpdesk and related activities versus replacing a recently retired IT manager.

While it’s a cliché to say that people are our greatest resource, it’s also true. How would you describe your current culture? Is it human centered? How has that changed over the years, good or bad? Reconnect with employees, whether they’re back in the office, hybrid, or even completely remote. Providing a “family” environment can be a competitive advantage for smaller businesses. Also, foster a culture of learning and encourage your team to share new ideas, learn new skills, and gain new experiences while maintaining appropriate accountability.

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