This week Business Officers that manage our HigherEd institutions from around the world meet at their National Conference in National Harbor, MD (bit.ly/97cxOs). This happens to be the 50th year for NACUBO and although the economy of late has forced relatively difficult changes in this sector, there is a Buzz in the air.
Unfortunately I could not make it to this years conference but I have had the privilege over the last few years to attend and talk with many leading CFO’s in the sector about their challenges, priorities and strategic initiatives. Most are acutely aware of the macro factors that influence their ability to execute over the mid to long term and have adjusted or continue to adjust to the “new normal”.
In my previous blog (bit.ly/wfwQ7e) I asked the question ‘Why doesn’t Finance care?’ the context was related to investment in Strategic Procurement but that didn’t really matter… the question stands for anything that requires a Business Officer to make a decision or not to make a decision. Why should they care?
I think to answer this question we first need to understand who Finance Officers are… what makes them tick:
Finance officers are trained to manage risk and potential exposure. They are generally tasked with aligning the books with strategy. All organizations have constraints. Most have cash concerns – as with the case of the HigherEd sector. Low risk initiatives that reduce costs and improve efficiencies are most certainly on the radar. Of course increasing “cash in” from revenue and investment/endowments are always front of mind but more and more, organizations are realizing that “cash out” can also be managed to achieve the same result.
Achieving a culture for strategic procurement of goods and services is a good example of an area that can directly align with an overall strategy of cost reduction. Constraints such as quality metrics, delivery performance and flexibility all play into decision criteria so this is not something that can be achieved in isolation. It requires cross-organizational alignment and leadership from the top in order to get the business processes and visibility to a point where procurement can become strategic.
Years ago I worked on a project initially intended to improve the efficiencies of a factory within a large organization. There were many areas of potential improvement within business processes, technology and up-skilling of people. However, we realized that there was a larger shift occurring in the market that the company was serving. There was actually no longer a need for the factory. Improving the efficiencies of this factory would not have aligned strategically and therefore would have been pointless.
Strategic Change sits above any one factory, department or group. In order to align strategically, cost center functions need to be recognized as as important as the revenue generating functions of organizations. This concept is mainstream in project based and manufacturing organizations and more recently in larger indirect expenditure environments such as within the Public Sector.
To get attention from Finance Officers you must first speak their language. Do your research on your organizations strategy and how your function is currently aligned. Determine where it is not. Figure out which components that are transactional or low(er) impact vs. areas that are high impact. Assess how well each is managed. As a manager your time is scarce. You need to pick the right battles and make the largest impact for your organization. Document your thinking in a well constructed business case.
Dont’ be afraid to present a picture to your Finance Officers that may not be what they want to hear. As long as your research is sound and fact-based, addresses opportunities that are manageable and conservative then you will get attention. You might find that they will not just care about Strategic Change but that they will lead it.
Disclosure: I am the founder of an online procurement company. My thoughts in this blog are my own personal views and intended to promote positive discussion. Please comment if you would like to challenge or expand on what I have said.