Featured in the Houston Business Journal, Feb 1, 2019
Written by Adam Dimmick – Audit Department Chair and CPA at Briggs & Veselka
The stigma that follows accountants often is not synonymous with creativity. However, in an ever-changing world, the need for outside-the-box thinkers, creativity, and innovation may be what your organization needs to reach the next level of success.
Historically, the role of an effective CFO has been defined as a backward-looking historian, analyzing trends, providing commentary on fluctuations and oddities, and assisting business owners with financial and regulatory compliance. But with the advent of new technology, data analytics, real-time reporting, and (dare I say) blockchain, the day-to-day activities for most CFOs may be impacted by innovation.
However, those companies that embrace the opportunity to implement the “right” kind of creativity may find that the production and thought leadership from the accounting function – with regard to reporting, analysis, and helpful future business insight – yield operational excellence, improve risk management, and create an opportunity to develop human capital.
In a study by the Conference Board, operational excellence is one of the six key areas of utmost importance cited by middle market company owners and leaders. The creative CFO can impact operational excellence in creating, managing, and reporting on operational key performance indicators (KPIs). While execution will be achieved with operations and infrastructure (sales, production, accounting, human resources, and marketing) teams, a strong CFO should be the thought leader.
The best advice is to start small, to involve the teams in the concept and in the process development, and to expect adoption to be lumpy. An excellent tool for this process can be found in Jim Canfield and Kraig Kramers’ book, CEO Tools 2.0, which includes templates and dissertation for evolving an organization to a metric-based operation. This process will not be completely linear, so creativity and patience may be the rules of the day.
Another aspect of operating an efficient organization is anticipating, preventing, and managing risk. For several years, most companies were concerned in managing safety risks for employees. While safety should remain imperative, the environment today has evolved; companies today face operational risks, financial risks, reputational risk, and, most recently, cyber risk.
Laggerts in developing a robust risk management approach become sitting ducks for hackers. Risk management is not for the faint-hearted, or for strictly linear thinkers, which is another reason why creativity in CFOs is critical. At Briggs & Veselka, we have encouraged our clients to evaluate the controls and run penetration testing on themselves to find weak links and potential areas of risk.
Creative CFOs often times can find risk remediation strategies that are creative and important in helping the company anticipate potential threats in the future.
Developing human capital
The diversity in today’s workforce can be characterized by different levels of experience, generations, and even aptitudes to utilize technology. Open dialogue can spark creativity with regard to programs and data manipulation tools that can help CFOs leverage and make informative decisions about trends, projections, and future growth opportunities.
We are finding that more companies in today’s global economy are capitalizing on finding professionals with diverse backgrounds to help achieve strategic goals. The CFO can help business owners and decision-makers creatively find ways to integrate skill sets and past experiences.
At the root of effective human capital management, I believe, is a strong, unique, and codified set of values that are centered on the company’s mission and vision. Oftentimes, transparency, reiteration of the strategic plan, and the opportunity to cross-utilize leaders within different departments will help a company with retention and recruitment and allow for the diverse contributions of everyone to help drive profitability and growth.
A good resource on the topic is a recent book by Bethany Andell and Jackie Dryden from Houston’s Savage Brands interestingly (and creatively) named, Get Your Head Out of Your Bottom Line. In it, they explore the value of a purpose-driven company, which allows organizations to tap into the individual strengths for the greater good of the company and the community.
This “people first” way of thinking, combined with improved processes and procedures, can make for a more successful company for the leadership that has the moxie and vision to make it happen.
The pace of change is blinding for many companies, and it is expected to escalate even more with the adoption of artificial intelligence, robotics, regulation, and global economics. While lineal and logical skills were important in the past, creative thinking, even in the CFO function, will be increasingly valued and valuable to remain profitable, successful, and scalable.
Adam J. Dimmick is the audit department chair and leads Briggs & Veselka’s construction and industrial service practice. He has served in leadership roles for the Texas Society of CPAs, its Houston Chapter, and several other professional associations and non-profit organizations.
This article was featured on the Houston Business Journal on Feb 1, 2019