Transitioning Controller Strategic Leader
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If your organization isn’t currently a strategic, high-performing one, you – as controller – can lead that transformation. In this webinar, you’ll learn: - Fundamental Techniques of High-Performance Organizations - Building a High-Performance Organization - Finding the Right Tools for Success
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Transitioning Controller Strategic Leader
- 1. 1WEBINAR Transitioning from Controller to Strategic Organizational Leader ksmconsulting.com© 2018 KSM Consulting, LLC Transitioning from Controller to Strategic Organizational Leader Steve Combs, Financial Services Practice Manager
- 2. 2WEBINAR Transitioning from Controller to Strategic Organizational Leader ksmconsulting.com© 2018 KSM Consulting, LLC Financial Services Practice Lead • Focuses on solving clients’ financial challenges as the leader of the financial services practice • Unique background including Fortune 50 corporate finance and small business entrepreneurship • Graduate of DePauw University (Undergrad) and Purdue University (Masters) • Favorite KSMC value: Collaboration and Teamwork • Fun fact: has visited all 30 Major League Baseball stadiums Steve Combs
- 3. 3WEBINAR Transitioning from Controller to Strategic Organizational Leader ksmconsulting.com© 2018 KSM Consulting, LLC Agenda WEBINAR 1. 2. 3. Fundamental Techniques of High-Performance Organizations Finding the Right Tools for Success Building a High-Performance Organization
- 4. 4WEBINAR Transitioning from Controller to Strategic Organizational Leader ksmconsulting.com© 2018 KSM Consulting, LLC© 2017 KSM Consulting© 2017 KSM Consulting Overview
- 5. 5WEBINAR Transitioning from Controller to Strategic Organizational Leader ksmconsulting.com© 2018 KSM Consulting, LLC More Sales? Or More Insight? A Scenario
- 6. 6WEBINAR Transitioning from Controller to Strategic Organizational Leader ksmconsulting.com© 2018 KSM Consulting, LLC In traditional financial accounting models, accounting is process-driven and governed by routines. Financial Accounting Management Accounting Traditional Financial Accounting A financial accounting paradigm shift must take place for an organization to reach its full potential and for you to be positioned as a strategic leader.
- 7. 7WEBINAR Transitioning from Controller to Strategic Organizational Leader ksmconsulting.com© 2018 KSM Consulting, LLC A High-Performance Organization When you combine the traditional process-driven management accounting focus with a “big picture” view, you’re positioned to make more strategic, innovative contributions to the overall organization, thereby laying the groundwork for a high- performance organization. Components of a High- Performance Organization: • Profitability • Compliance • Goal Driven • Innovative
- 8. 8WEBINAR Transitioning from Controller to Strategic Organizational Leader ksmconsulting.com© 2018 KSM Consulting, LLC© 2017 KSM Consulting© 2017 KSM Consulting Fundamentals of a High- Performance Organization
- 9. 9WEBINAR Transitioning from Controller to Strategic Organizational Leader ksmconsulting.com© 2018 KSM Consulting, LLC Fundamentals of a High-Performance Organization Lean Principles Continuous Improvement Variation Control / Six Sigma 6
- 10. 10WEBINAR Transitioning from Controller to Strategic Organizational Leader ksmconsulting.com© 2018 KSM Consulting, LLC Lean Principles Shop Floor Example • Do employees who are making the product have all the tools and resources they need to be productive? • Should one person or several people manage production from beginning to end? • On the office side, does an invoice need to go through multiple approval processes? Creating the most value for customers with the least amount of resources and/or waste. Lean Principles
- 11. 11WEBINAR Transitioning from Controller to Strategic Organizational Leader ksmconsulting.com© 2018 KSM Consulting, LLC Variation Control / Six Sigma • Every time a product is produced, does it come out exactly as the specs dictate? Does the product perform the way it is supposed to? • Can a 10-second process be trimmed down to 8 seconds? • Does your engineering team understand that reducing cycle time, reducing defects, and improving product consistency will lead to reduced costs? An effort to achieve stable and predictable process results by reducing process variation through precision and consistency. Variation Control6
- 12. 12WEBINAR Transitioning from Controller to Strategic Organizational Leader ksmconsulting.com© 2018 KSM Consulting, LLC Continuous Improvement • Does the organization embrace and encourage an open culture of learning? • Are employees encouraged to “fail fast” with new ideas so they can hone and perfect their innovations? • Is the organization designed to provide and respond to continual feedback? • Are you helping the organization set goals that strike the balance between aggressive and achievable? Focus on improving products, services, and/or processes on an ongoing basis. Continuous Improvement
- 13. 13WEBINAR Transitioning from Controller to Strategic Organizational Leader ksmconsulting.com© 2018 KSM Consulting, LLC Summary Lean Principles Continuous Improvement Variation Control / Six Sigma 6
- 14. 14WEBINAR Transitioning from Controller to Strategic Organizational Leader ksmconsulting.com© 2018 KSM Consulting, LLC© 2017 KSM Consulting© 2017 KSM Consulting Building a High-Performance Organization
- 15. 15WEBINAR Transitioning from Controller to Strategic Organizational Leader ksmconsulting.com© 2018 KSM Consulting, LLC 15 ksmconsulting.com Taking the First Step Before you begin, your accounting environment must be in a steady state. At a minimum, your financials should be: • Accurate • Timely • Compliant Then, you are ready to begin building a high- performance organization. Accounting Process Assessment
- 16. 16WEBINAR Transitioning from Controller to Strategic Organizational Leader ksmconsulting.com© 2018 KSM Consulting, LLC A Well-Balanced Accounting Department Resources You Need: • Traditional CPAs who are experts in reporting and compliance • Strategic financial thinkers who are able to: • Analyze the numbers • Determine ways to become streamlined and profitable
- 17. 17WEBINAR Transitioning from Controller to Strategic Organizational Leader ksmconsulting.com© 2018 KSM Consulting, LLC Questions to Ask: • Why does your organization not currently have this in place? (Note: Often, traditional organizational roles require the accounting dept. to be focused on debits/credits instead of strategy.) • What is holding you back? Controller as Leader Establishing the controller as the leader in the organization can help educate and inform those moving from more traditional accounting roles into more strategic positions.
- 18. 18WEBINAR Transitioning from Controller to Strategic Organizational Leader ksmconsulting.com© 2018 KSM Consulting, LLC Organizations need to get the right people in the room so well-informed decisions can be made. Who are the right people? • The people who know the job best • The people who are performing functions day in and day out • The people on the “shop floor” or “front line” Cultural Transformation When the right people are asked the right questions, there’s when the transformation begins.
- 19. 19WEBINAR Transitioning from Controller to Strategic Organizational Leader ksmconsulting.com© 2018 KSM Consulting, LLC© 2017 KSM Consulting© 2017 KSM Consulting Find the Right Tools
- 20. 20WEBINAR Transitioning from Controller to Strategic Organizational Leader ksmconsulting.com© 2018 KSM Consulting, LLC Controllers are responsible for more than just finances. They also handle mountains of data. Supporting Tools: • Enterprise Resource Planning • Business Intelligence • Customer Relationship Management Systems Data With the Right Tools, Controllers: • Improve Productivity • Increase Efficiencies • Decrease Costs • Streamline Processes • Ensure Compliance
- 21. 21WEBINAR Transitioning from Controller to Strategic Organizational Leader ksmconsulting.com© 2018 KSM Consulting, LLC© 2017 KSM Consulting© 2017 KSM Consulting How can KSMC help? Technology
- 22. 22WEBINAR Transitioning from Controller to Strategic Organizational Leader ksmconsulting.com© 2018 KSM Consulting, LLC Do you have the skills, wherewithal, and resources to become a high-performing organization? Consider picking one thing and begin there. How can we help? • Assess where you are today • Ensure your financials are aligned with your organization’s strategic initiatives • Establish a strategic plan that helps you become an equal, strategic partner An Experienced Partner An Experienced Partner Will Ask: • What are you doing? • Why are you doing it? • How do you put new procedures into place?
- 23. 23WEBINAR Transitioning from Controller to Strategic Organizational Leader ksmconsulting.com© 2018 KSM Consulting, LLC© 2017 KSM Consulting© 2017 KSM Consulting Summary
- 24. 24WEBINAR Transitioning from Controller to Strategic Organizational Leader ksmconsulting.com© 2018 KSM Consulting, LLC 24 Summary The Big Takeaways 1 Establish a stable accounting environment 2 Develop a focus on the needs of the business 3 Align people, process, and technology
- 25. 25WEBINAR Transitioning from Controller to Strategic Organizational Leader ksmconsulting.com© 2018 KSM Consulting, LLC 25 Feel free to submit questions in the chat box on your screen. Webinar: Moving from Controller to Strategic Organizational Leader Questions?
- 26. 26WEBINAR Transitioning from Controller to Strategic Organizational Leader ksmconsulting.com© 2018 KSM Consulting, LLC Thank you for attending! Monitor your inbox for a recording of the webinar as well as our white paper, “Moving from Traditional Controller to Strategic Organizational Leader.” Steve Combs Financial Services Practice Manager P: 317.452.1716 E: scombs@ksmconsulting.com www.ksmconsulting.com
Editor's Notes
- Speaker: Steph Keep to less than 3 minutes
- Outline (2 minutes on what we are going to cover today…) Characteristics of a High Performance Fundamental Techniques of High Performance Organizations Building High Performance Organizations (how that leads to becoming a strategic leader) Finding the Right Tools for Success
- The month is closing, financial statements are being finalized, and controllers are preparing to present their metrics to their CEOs. We spend much of our time with closely held business, where the bottom line translates to income to the ownership. So when a C-Suite leader examines a financial statement, the first line he or she notices is typically the bottom line: Did the company make money or not? And if the answer is not, because many entrepreneurs are sales-oreiented, the go-to solution is often to create more revenue. But having a deep understanding a profit and loss statement – and being educated and empowered to read between the lines – is a far more complex undertaking. A controller who truly understands all the intricacies of the business understands that the solution may very well lie somewhere else. Is the cost structure imbalanced, meaning is it a margin issue or a spend issue? Is the pricing wrong? Can the process be tightened to increase productivity? Next-generation controllers know the answer isn’t always a sales problem – often, the solution exists somewhere more unexpected. And they know how to find – and fix – it. We classify organizations that can find answers to those deeper questions, as strategic and high-performing organizations. If your organization isn’t currently a strategic, high-performing one, you – as controller – can lead that transformation.
- Full disclosure here, I am not a CPA. I was raised up through the financial analysis world which has provided me a bias towards leaning to understanding the business needs and not necessarily, what I call, the compliance needs. In the traditional financial accounting model, accounting is process-driven and governed by routines and standards. Output is measured and reported, but the factors that drive results aren’t necessarily measured or understood. The emphasis is on consistency and accuracy. While financial accounting is important to the point where it shouldn’t and can’t be ignored, accounting has to become more relevant to the organization. Need bridge between financial (standards) but translating that data into something more useful for the organization. Our experience has been that organizations that think of their accounting department as SOLELY compliance and backward looking, lack an overall appreciation of accounting and how, with a slightly different perspective, accounting can provide the organization a strategic advantage in the marketplace. By adopting a more strategic approach – one that switches the perspective from financial accounting to a broader management accounting view – you are able to identify variations in the process where changes can be made. A number of tools can help organizations understand their critical success factors and how they’re measured. When this understanding happens in real-time, immediate changes – and immediate impact – can be made. When you know what’s normal, what the variations are, why those variations exist, and how to adjust them for maximum performance, that’s when you go from being financial reporter to strategic partner.
- In accounting it is assumed you are going to manage accuracy, timeliness, and compliance but what pushes you to be a high performance org. is when controller can be an integral part of the management staff and pushing the overall organization into bigger and better things.
- So, let’s talk about what we see as some fundamentals of high-performance organizations.
- So what does a high-performance organization look like? And what kinds of questions should you be asking? We don’t address these techniques in much detail, but we do see them used in all types of businesses. If you’re organization is using one or more of them, then there is definitely a role for the accountants in the room to be active participants. If your organization is not using these techniques, there is an opportunity for you, as leader of the organization, to drive the introduction of one or more of these techinques into the organization. In a high-performance organization, operational changes – the kind that traditional accounting isn’t normally involved with – must take place. A transformational controller understands that asking more strategic questions and getting operational expertise involved in the decision-making process is the key to creating change. A high-performance organization creates competitive, sustainable advantages by effectively using resource capacity, maximizing revenue, and controlling expenses through the use of these three tools: lean principles, variation control / six sigma, and continuous improvement.
- Questions to pose: Have you considered your own accounting operations as an opportunity to do more with the same or less staff? Have you challenged your operations management team to increase their productivity in order to reduce costs?
- One of the more sophisticated of the techniques and one found more often in higher volume operations and manufacturing. In Six Sigma methodology, data comparisons allow leaders to detect variations that may indicate a problem or the need for a process change. Typically, this is a feat of engineering.
- Often involved establishing KPIs and driving change via targeting aggressive goals.
- As I mentioned, we didn’t cover these techniques in much detail, but they are all an opportunity for you as a leader, to drive positive change into your organization; and transform you and your teams into strategic partners in the business and not just the backward looking accountants that are only around to keep everyone from breaking the rules.
- In accounting it is assumed you are going to manage accuracy, timeliness, and compliance but what pushes you to be a high performance org. is when controller can be an integral part of the management staff and pushing the overall organization into bigger and better things.
- In more organizations than not, the second type of resource is not as abundant as the first. You have to have the traditional skillset in terms of compliance but what pushes orgs to the next level is the strategic side of it. I like to the idea of a mixture of even non-accounting backgrounds filling the second type of role and interacting with the CPA-types. Both skillsets benefit from learning from each other.
- Use slide as a prompt to talk about when it doesn’t happen. Example: LHP Software – over a period of 3-4 years took their eyes off the ball and didn’t emphasize the importance of accounting, systems, and it forced them into a crisis which make them make an investment in people in technology. Stresses the importance of keeping ahead of the curve. Changed reporting structure so that the controller/accounting manager reported to COO and in essence was removed from the decision-making table.
- Notice that I’m not just talking about the accounting department here. This is a shift at the corporate level
- Controllers numbers are related to everything in the business – from what’s in the sales funnel to how employee recruiting looks. And the only way to get to and fully understand the data is with the right integrated tools. Integrated technologies provide the metrics that help identify process and performance variables. As a result, controllers and their teams can make real-time, strategic adjustments to ensure maximum performance and output. And measurable, provable numbers give credibility to all involved. Smaller client, customer builder, primarily manual order processing – via paper forms and clipboards. No system for customer follow up; manual invoicing process managed by accounting. Found a software solution that incorporated from Estimate to Order to Delivery to Invoice. The controller took the lead role in implementing the solution and is seen as the overall “owner” of the system and also the data within the system.
- This is hard. Figuring out where to start is hard. Typically start with the Assessment I mentioned earlier. Example: Process Assessment with Indy Hebrew Congregation Aligning Budget with Strategy Project with Carmel Dads Club
- We’ve talked about 3 things today: techniques used by high-performing organizations, ideas on how to build a high-performing organization, and finding the right tools to move your organization to a higher performing level. I have couple of key takeaways for you: Stable Accounting (you do need to have / be in a stable state before you can start to think about this) Before you begin, you need to have an accounting environment – you are already producing accurate financials, they need to be timely, they need to be in compliance; you need to have that steady state before you can start move to the next level. Develop A Focus on the Business Needs: deep understanding of the orgs goals and strategies. Controller is the one who links those things to the financials. Linking strategic plans to budgets. Developing KPIs. Has to be an emphasis on People, Process, Technology. (all three legs of the stool)
- Speaker: Steph Prepared Questions: I’m already doing many of the things you’ve suggested, but how can I get my organization to buy into the value? Establish financial review meetings Provide a specific analysis that hasn’t been done before Redesign a process in your department and share the outcome with the team How do I know if I’m in a stable-state in my accounting organization? Measure yourself in two ways 1) accuracy (manual JE), and 2) timeliness
- Speaker: Steph