Hope is the author of a number of articles and books on performance management and associated leadership issues. He is co-author with Robin Fraser of an article entitled “Who Needs Budgets?” in the Harvard Business Review, February 2003. He is co-author with Robin Fraser of Beyond Budgeting and co-author (with his brother Tony Hope) of two earlier books, Transforming the Bottom Line and Competing in the Third Wave. His various books have been translated into many languages and won coveted awards in the USA. His most recently published book is Reinventing the CFO.
As Hope explains, “too many CFOs...remain prisoners of dysfunctional systems and mental models that were developed for a role that is fast becoming obsolete.” That is to say, the position of CFO must be reinvented. However, that will not happen unless and until governing boards and CEOs insist that CFOs be centrally involved as part of the senior-management team running the given business. The same is also true of CIOs and heads of HR. Today, CFOs face a number of external pressures. For example, new success drivers such as strategic planning, resource allocation, and performance measuring systems as well as a new regulatory environment and more demanding shareholders. With regard to internal pressures, they include too much detail and complexity, inadequate forecasting capability, too little understanding of how to reduce costs, and a lack of risk management expertise.
Throughout this volume, Hope addresses with rigor and eloquence a number of key issues that the CFO and his or her finance team must accommodate to transform the finance operation. He suggests that the CFO be viewed in several different roles: As a “freedom fighter” who liberates both finance and business managers from “huge amounts of detail and the proliferation of complex systems that increase their workload and deny them time for reflection and analysis”; as “analyst and adviser” who, by breaking free from detail and complexity, “creates time for finance to provide the information that managers need to make effective decisions”; as “architect of adaptive management” who enables managers to be liberated by releasing them from “the chains of the detailed annual planning cycle” by replacing targets and budgets with “effective steering mechanisms, including continuous planning reviews and rolling forecasts, that enable managers to sense and respond more rapidly to unpredictable events and to changing markets and customers”; as “warrior against waste” who with her or his finance team is able to focus on “huge swathes of costs that have remained unchallenged for years”; as “master of measurement” who brings measurement back under control and provides clear guidance about its meaning to managers at every level who, with rare exception, only need six or seven measures ; and as “regulator of risk” who provides an effective framework for good governance and risk management “by using multiple levers of control that support corporate governance controls, internal controls, strategic controls, and feedback controls.”
A separate chapter is devoted to each of these “roles,” as Hope explains how the reinvention of the CFO involves a multi-dimensional process of increased involvement in management at the highest level. To repeat, this will not happen unless and until the governing board and CEO insist upon and support, then sustain that process. Here’s a key question: when embarked on the reinvention process, how to gain the support of key people? In response, Hope stresses the importance of involving operating people in the change process, avoiding more complexity, showing some “early wins” (i.e. picking “low-hanging fruit”), and being patient while maintaining momentum. He makes a convincing case that financial managers really can “transform their roles and add greater value” but only if they are allowed to do so. Moreover, they must be actively involved in a process, a “journey,” shared with other C-level executives. Only then can everyone on the senior-management team, working effectively together, establish and then strengthen “a more adaptive, lean, and ethical organization.” Their interdependence may seem obvious but is seldom recognized.
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