The document outlines The Disciplined Management Process presented by Steve Cook of vcfo. It describes a cyclical management process that includes strategic planning, tactical planning, performance monitoring, forecasting, risk assessment, and contingency planning. The goal is to have no surprises and turn numbers into actionable issues through a process of vision, execution, and communication. Key responsibilities of a CFO are also listed, including designing and overseeing the management process to create stakeholder value.

1. The Disciplined Management Process
Presented by Steve Cook

2. About vcfo
• vcfo provides an integrated
suite of finance, HR,
technology and recruiting
support through our team of
consulting professionals
• Our goal is to improve
operational performance and
optimize productivity
Learn more: www.vcfo.com

3. Introductions
Mike Wilfley, COO, EVP
• Oversees operations in all markets
– Austin, Dallas, Denver, Houston
and Seattle
• Former Consulting CFO with more
than 25 years of experience
• Extensive experience in building
strong teams designed to execute
complex strategic and operational
plans in various industries
3

4. Introductions
Steven A. Cook,
Managing Director
• Based in Dallas, Steve oversees
operations and business
development for the North Texas
Region
• An active CPA, Steve’s background
spans nearly 40 years in financial
and consulting industries
• More than 18 years experience as a
president and CEO of finance and IT
consulting firms and over 35 years
as a practicing CFO, predominantly
with large, publicly traded
companies
4

5. What we might accomplish today?
Management
• Business Ownership/General Management
• Departmental/Project/Career
• Life (finances, kids, marriage, etc.)
• Divide your notepad into three columns
So What … “I know all that already”
• Vision
• Execution
• Communication (Catch phrases)
5

6. The Management Process
6
Shareholder
&
Stakeholder
Value

7. The Management Process – Shareholder Value
• The business/project/process should not be an end itself – it
should be a means to an end. Why are you working so hard
and taking so much risk?
• Possible alternatives: going public, going private, giving to
kids, retiring, building a legacy/culture, working forever
• Impact on strategic plan
• Examples
7

8. The Management Process – Strategic Plan
8
STRATEGIC
PLAN
(3 YR.
HORIZON)
Shareholder
&
Stakeholder
Value

9. The Management Process – Strategic Plan
Where do we want the business/department/project to be in 3 to
5 years out (or, at the end)?
Notice how I use more than just financial terms:
• A Strategic Plan is much more than a financial document
• The “pro forma” is at the end, not at the front
9

10. The Management Process – Strategic Plan Sample A
10
Page
Executive Summary ………………………………………………… 2
Product Overview ………………………………………………….. 3
Industry/Market Overview ……………………………………… 5
Capabilities ………………………………………………………….. 9
Operating and Growth Tactics ………………………………….. 10
Key Operating Assumptions …………………………………….. 13
Financial History and Projections (summary) ……………… 14
Exhibits
1. Management Credentials …………………………………….. 15
2. Detailed Financial History and Projections …………...…. Unnumbered
3. Marketing Materials ……………………………………………… Attached
Table of Contents

11. The Management Process – Strategic Plan Sample B
11
Table of Contents
Executive Summary …………………………………… 3
The Enterprise …………………………………………. 5
History
Management
Philosophy
Products and Services
Assets
The Market & Industry ……………………………… 10
Segment 1
Segment 2
Competition
Targeted Opportunities for Growth ……………… 12
Key Operating Assumptions ……………………….. 12
Use of Funds …………………………………………… 12
Key Risks ……………………………………………….. 13
Financial History & Projections (summary) …… 13
Exhibits
Marketing Materials
Financial History & Projections (detailed)

12. 12
The Management Process – Tactical Plan
STRATEGIC
PLAN
(3 YR.
HORIZON)
TACTICAL PLAN
(1 YR
HORIZON)
Shareholder
&
Stakeholder
Value

13. 13
The Management Process - Tactical Plan
• What do we want to accomplish over the next twelve months
that will move us correctly down our 3 – 5 year path?
• Again, more than a financial document. The financial piece is
known as “the budget,” but it, again, should be at the back, not
the front
• Every key “assumption” in the budget constitutes a
“management lever” – representing something that
management can “tweak”
• Therefore, for every key management lever, there should be a
specific tactical plan to accomplish the desired result
• Budget should go to cash flow statement … all managers
should know how to read a cash flow statement (versus a
traditional P&L)
• Tactical Plan should also address incentive compensation plans
– specifically what behavior do you want to incentivize and
how

14. 14
The Management Process – Performance Monitoring
STRATEGIC
PLAN
(3 YR.
HORIZON)
TACTICAL PLAN
(1 YR
HORIZON)
PERFORMANCE
MONITORING
(MONTHLY/
QUARTERLY)

15. 15
The Management Process – Performance Monitoring
• Again, operational not just financial
• For every management lever (or assumption) deemed to be
important, some form of a performance management report
should be developed
• Cash Flow – Incentive Compensation
• Narrative – Executive Summary – top ten points

16. 16
The Management Process – Forecasting
STRATEGIC
PLAN
(3 YR.
HORIZON)
TACTICAL PLAN
(1 YR
HORIZON)
PERFORMANCE
MONITORING
(MONTHLY/
QUARTERLY)
FORECASTING
(QUARTERLY)
Shareholder
&
Stakeholder
Value

17. 17
The Management Process – Forecasting
• Never change the budget
… but don’t put your head in the sand
• Cash Flow – Incentive Compensation

18. 18
The Management Process – Risk Assessment
STRATEGIC
PLAN
(3 YR.
HORIZON)
TACTICAL PLAN
(1 YR
HORIZON)
PERFORMANCE
MONITORING
(MONTHLY/
QUARTERLY)
FORECASTING
(QUARTERLY)
RISK /
OPPORTUNITY
ASSESSMENT
(QUARTERLY)
Shareholder
&
Stakeholder
Value

19. 19
The Management Process – Risk Assessment
• “What you want to hear” forecast … “Sandbag” forecast?
Either one is bad and may result in bad decisions
• Tendency is to respond that forecast is “down the middle”
• Only way to arrive at answer is to assess risks and
opportunities
• Assess range of possible results – worst case, best case –
compare to target

20. 20
The Management Process – Contingency Plan
STRATEGIC
PLAN
(3 YR.
HORIZON)
TACTICAL PLAN
(1 YR
HORIZON)
PERFORMANCE
MONITORING
(MONTHLY/
QUARTERLY)
FORECASTING
(QUARTERLY)
RISK /
OPPORTUNITY
ASSESSMENT
(QUARTERLY)
CONTINGENCY
PLAN
(QUARTERLY)
Shareholder
&
Stakeholder
Value

21. 21
The Management Process – Contingency Plan
• For every risk - how to minimize possibility and/or impact
• For every opportunity - how to maximize possibility and/or
impact
• Assign names/responsible parties to each task
• Feedback into next tactical plan

22. 22
• If you apply the process diligently (i.e. in a “disciplined”
manner), it’s almost impossible to be surprised by an operating
issue
• And, that’s the goal of a CFO (or any manager) – no surprises
• The goal is action.
If you go through a planning process, or put a bunch of numbers on a
report, but you never take an action, why did you waste the time?
• The job of a good CFO is to “turn the numbers into issues”
• Management has to make the ultimate decisions
• The CFO helps in focusing on the issues
• Vision/Execution/Communication
The Management Process – the Bottom Line

23. 23
CFO Key Responsibilities
Key Responsibilities of a CFO:
• Disciplined Management Process – Design and Supervision
• Stakeholder Value
• Strategic Planning (& multi-year projections)
• Tactical Planning (& budgeting)
• Performance Monitoring (including financial reporting)
• Forecasting
• Risk – Opportunity Assessment
• Contingency Planning
• Bank Relationships, Treasury, Cash & Debt Management
• Internal Controls
• Valuation Monitoring & Exit Planning

24. 24
Contact us
Mike Wilfley
COO, EVP
mwilfley@vcfo.com
512-450-6556
Steven A. Cook
Managing Director
scook@vcfo.com
214-545-3600
Want to learn more about how vcfo can help?
Contact:
www.vcfo.com

25. Thank you.
25