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Invest in Leadership Development

When you invest in leadership development, you are making an investment. It’s something that you pay good money for and expect a return on your investment. But what many leaders don’t realize is that leadership development should be strategic. We once had a coaching participant (CFO) who worked in a family company. Once the CEO retires, the CFO is set to become the CEO. Instead of going into the job blind or get coaching at the wrong time, this individual sought out coaching before he was set to take over the company. So, why invest in leadership development in the first place?

Invest in Leadership Development

Why Invest in Leadership Development

People will always be a good investment. Why? Because without people, you will not be able to accomplish all  of your goals for your company. There’s a phrase… The tone starts at the top or the fish rots from the head down. Whichever phrase you prefer, it hints at the same thing. Success (or failure) is a result of the leadership of a company. If you want a future for your company, then you need to focus on your leadership and management. You can accomplish this in 2 ways – 1) hire good leaders and 2) invest in leadership development for existing company leaders.

A legal entity should stand on its own no matter what changes are made at the top. There should always be a succession plan whereby management should be able to step up to executive roles. Without investing in your team, this will not happen.

The second option rides on the fact that you have already invested in a current employees with their compensation, benefits, etc. Now, it’s time to get them the coaching they need to further increase their value to your company.

 To learn more financial leadership skills, download the free 7 Habits of Highly Effective CFOs.

Reasons to Invest in Leadership Development

There are several reasons to invest in leadership development including improving profitability, retaining talent, and improving return on investment. Harvard’s research report on The State of Leadership Development discusses how leadership development addresses the “demands for change to address threats from global competition and technology-driven upstarts; the need to engage a multigenerational workforce with a range of work styles; and the imperative to cultivate a new generation of leaders who can meet these needs and thrive.” Simply put, companies need to address competition, culture, work styles, and generational differences to compete on a global scale.

Improve Profitability

If your leaders know how to improve profitability with the tools, resources, and second-hand experience from a leadership development program, then they will become evermore valuable to your firm. Leadership development will coach them how to make strategic decisions, how to lead effectively, and how to find opportunities. All of those benefits have the opportunity to improve profitability.

Retain Talent

In addition, companies cannot motivate all people by money. In fact, financial gain isn’t the only thing many employees negotiate. The next “gain” many negotiate for is mentorship, training, coaching, and further leadership development. That should tell you something. We all know the cost of turnover is high and can potentially make a dent in profitability. Your company’s goal should be to retain talent for as long as possible.

Improve Return on Investment

Many leadership development programs do not effectively communicate how they are going to improve return on investment. A good CFO or financial leader should be able to increase value 1-2% of sales in profits. For example, if a company has $1mm in sales, then a CFO should be able to increase profitability at least $10-20,000. And it goes up from there! If the investment is greater than 1-2% of sales, then I would advise you to find a different program. How much return can you expect from investing in your leaders? Financial leaders should always be looking at ways of adding value.

Financial Leadership Development

More specifically, your financial leadership needs to be further developed in their leadership skills. In our Financial Leadership Workshop, I enable my students to go beyond the role of CFO/CEO to become the central financial leader in the company. Furthermore, our curriculum empowers you to become both an influence and decision maker in your company.

Any financial leadership development program worth investing in should accomplish a couple things. It should make the shift from numbers cruncher to financial leader. It should also cover how technology changes the role. Obviously, it should address profits and cash flow. There are many other topics that I could list here, but you can read more about what you should be prepared to walk away from a coaching workshop here.

Finding the Right Financial Leadership Development Program

It all starts with who is coaching the program. For example, if a 26-year old with no financial executive experience began coaching financial leadership, then there would be no credibility or experience behind that program. In comparison, if the course is coached by a 28-year financial executive who is seasoned and experienced either in a niche market or a variety of markets, then the only thing you need to look for is the fit. Finding the right financial leadership development program begins with the curriculum. Does it coach on the topics you need to coached up on? If so, then you need to also evaluate the following:

  • Logistics (time, location, schedule, etc.)
  • Cost
  • Benefits
  • The Coach

Right now, registration is open for our Financial Leadership Workshop Gamma Series starting this October. Click here to learn more about our program and contact us to see if it’s the right fit for you.

In the meantime, I also wanted to gift you our 7 Habits of Highly Effective CFOs. This whitepaper is by far our most popular whitepaper and is just a snippet of what to expect in our Financial Leadership Workshop.

Invest in Leadership Development

Strategic CFO Lab Member Extra

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Invest in Leadership Development

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Budgeting 101: Creating Successful Budgets

We often discuss budgeting in our firm, and I often write about budgeting because it is such an important topic in any company. As a consulting firm, we deal with this issue at almost every client. Let’s rehash some basics… Why is budgeting important? As properly stated by Ron Real (the author of 13 ½ Strategies for Winning the Budget Wars), “To achieve success in anything, you need two ingredients: a target to aim for, and a way to measure your progress towards it” (more from Ron Real below). Before we go into creating successful budgets, let’s address the common problems with budgets.

Successful BudgetsCommon Problems with Budgets

We deal with clients all the time that either do not have a budgeting system in place, or they have the wrong budget system. The following are some of the most common problems we see with budgets at some companies:

  • Lack of accountability
  • Employees ignore the budget, don’t follow it, or find ways around it
  • Only applies to some groups/managers and not to others
  • Results in fights or power plays, or managers play games
  • Budget process takes too long and consumes too much of people’s time
  • Budget is wrong from the beginning
  • Established goals are either easy to reach or unachievable
  • Filed away when completed – lack of follow up
  • Built on faulty or unrealistic assumptions or not everyone agrees on the assumptions or principles
  • Budget performance and financial feedback is slow or nonexistent
Ready to start creating successful budgets? Become a SCFO Lab member and start the Budgeting 101 Execution Plan where we go in depth into common problems with budgeting, budgeting rules, and budgeting principles. Learn more about the SCFO Lab here.

Successful Budgets

Successful budgets are possible, but the TONE STARTS AT THE TOP. If the leadership or Board does not take the budget process seriously and does not hold others accountable, then you will have a problem with the budgeting process. You can build a budget and a budget process that is well conceived, creates a visionary plan, and shares resources. The budget process is very much a team effort, but it often needs to be taught to others in the organization.

The tone starts at the top, and your CEO needs an advisor they can trust. Click here to download our free How to be a Wingman Guide to start setting that tone.

4 Budgeting Rules

Successful budgets are created by following rules and principles developed over my 28-year career. You can find all these rules and principles in the Budgeting 101 Execution Plan inside the SCFO Lab. Let’s look at 4 budgeting rules that help create successful budgets.

Rule #1: Decision Making Tool

The budget is a tool for decision making. It is not a disconnected document that has little to do with the company’s actual business. Start by reframing your and your CEO’s perspective on the purpose of a budget in a business.

RULE #2: Management Tool

Budgeting is a very important management tool for achieving lasting success. Just like the CFO is the wingman to the CEO, the budget is the wingman to all management.

RULE #3: The Plan

A budget is establishing the discipline to set up a plan and then adhering to the plan. In fact, 94% of all ineffective budgets are the direct result of weaknesses in the organization’s corporate structure. Some of these weaknesses include the following:

  • Inadequate leadership
  • Poor communication
  • Conflicting goals
  • LACK OF ACCOUNTABILITY

Hint: Be disciplined and follow the plan!

RULE #4: Problems Exist

Issues that lead to a poor quality budget process mean that these problems already exist within the organization ALL THE TIME! If your company is experiencing budget problems, then it’s time to look at what the problem really is. Issues that are probably already part of the corporate culture, but many times ignored, include the lack of:

  • Vision
  • Accountability
  • Communication

“Without a yardstick, there is no measurement.  And, without measurement, there is no control”
– Pravin Shah

There are many other rules to budgeting and basic principles, but we can not cover all of these in this one blog; however, we do cover this topic at length in our Financial Leadership Workshop (Day 4) and our SCFO Lab’s Budgeting 101 Execution Plan.

Understanding how budgets really should work is critical. I recently had an executive tell me that he did NOT believe in budgeting because it just meant that people now had the authority to spend everything allocated to them at the end of the year. Unfortunately, this executive was thinking of budgeting like the government thinks about a budget. You have $1,000 for the year, so you must spend it by year end. That is NOT a corporate business budget or budget process. That is a very flawed interpretation of budgeting.

If I could use just one word that describes why it is important to have a good budget process, it would be “accountability”.  A budget will force your team to be held accountable. But, if that theme of accountability does not start with the Tone at the Top, then you are guaranteed to have a flawed budget process.

If you are ready to take your financial leadership development to the next level, then look no further than the Financial Leadership Workshop. Registration for the Gamma Series of the Financial Leadership Workshop is now open. Learn more about the program and how you can get started in October 2018.

Suggestions to Create a Successful Budget

Other quick suggestions to create a successful budget include the following:

  1. Set goals and objectives that push for growth and efficiency, but keep those goals and objectives realistic. There is nothing more demoralizing than to have a unachievable goal.
  2. Start your budget planning process early. For a calendar with year end at December, start no later than August of the current year.
  3. Measure your actual results every month versus budget, and hold people accountable.

Adhering the these budgeting rules and reframing budgeting to your CEO and leadership team is just one example of how you as the financial leader can act as a wingman. If you want to step up and be the trusted advisor your CEO needs, click here to download the How to be a Wingman Guide.

Successful budgets

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Successful budgets

 

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What Your Banker Wants You To Know

What Your Banker Wants You To Know

In small or large businesses, we often end up dealing with banks and bankers beyond the checking account. When you have debt with your bank (your lender), the relationship takes on another dynamic. The typical loan agreement for traditional debt includes loan amount, terms, collateral provided, the covenants you must live by, and the dos and don’ts allowed. When things are going well, the relationship with your banker seems to always go well.  It is in difficult times that things get tough. Let’s look at what your banker wants you to know.

Growth is good, but it requires more capital to sustain. Learn about the 25 Ways to Improve Cash Flow (in addition to acquiring capital from the bank).

What Your Banker Wants You To Know

Your banks wants to know the bad new sooner than later. Furthermore, your banker does not want surprises. If you are having issues with your business, then discuss these early on with your banker. If your getting close to the limitations of your covenants, then let your banker know. In addition, if you see a change coming in your industry, then let your banker know early on. Be sure to give your banker the good news also. If you are planning on changes to Sr. Management, then mention these to your banker.

The banking world changes based on the economy, regulations, and markets. We remember 2008 when new credit at banking institutions basically shut down. Before that, it was fairly easy to get credit. And loan requirements were not as cumbersome – which is not always good. But the crisis caused a change in behavior at banks – some of it self implemented and some implemented by regulators.

In today’s market, money is still relatively cheap. There is an abundance of liquidity in the markets. So banks do want to loan money, but you must meet some basic guidelines.

What Your Banker Wants You To KnowWhat Commercial Banks Want

In order to loan you money, commercial banks basically want just a few things:

  1. They want to have collateral that secures their loan
  2. They want to know you have the cash flow to payback their loan
  3. They want to understand your business and they want to know what the funds will be used for
  4. They want to understand how much they will make $ on their loan to you

Different Types of Lenders

There are different types of lenders, including the following:

The cost of that capital goes from cheapest to most expensive lender on the list above. The structure of the debt also goes from easiest to most complex structure in the list above. Some want collateral (security), and some do not.

Looking for more capital? There may be cash lying around your business. Learn the 25 Ways to Improve Cash Flow today.

Keep your eye on your Debt Covenants

Most likely, if you have commercial debt, then you may have some debt covenants stated in your loan agreement. Covenants are the requirements you as the Borrower must maintain to be in good standing with your loan agreement.

Oftentimes, the bank and banker find out something is wrong when you turn in your financials and/or bank compliance certificate. They find that one of the covenants is out of whack. You may have a debt/EBITDA covenant ratio as part of your covenants. This is a common requirement. Do not wait for you to “bust your covenants” before you reach out to your banker. Monitor your covenants closely. If you see drivers in your business that may create a problem with your covenants, then reach out to your banker.

Renegotiate Covenants

Believe it or not, I have been in situations where the loan agreement is already a few years old. The company has become much more financially healthy, and I went back to renegotiate certain covenants to ease the reporting burden. The bank was very open to modifying some covenants. Usually, you have to be in good standing and have a good historical track record to modify or request to modify covenants. But do not be shy. Simply ask. The worst that can happen is your banker says, “no”.

Most bankers in today’s market do really care about the relationship, even at the biggest banks. Your banker does want to see you succeed. If you are living through troublesome times, then your banker does want to see you get financially healthy. But you need to communicate with your banker. The worst thing you could do is hide something from your banker or try to sweep something “under the rug”. That will eventually come, out and you will have burned a bridge with your banker. After you hide something, or if you do not disclose something, your banker will always carry that doubt in the back of his mind. And they may not be there for you when you really need to negotiate that debt covenant.

Are there other areas in your company that you can focus on to improve cash flow (outside of bank loans)? We have put together the 25 Ways to Improve Cash Flow whitepaper to make a big impact today on your cash flow.

What Your Banker Wants You To Know
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What Your Banker Wants You To Know

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5 Ways to Reduce Costs When Hiring

Hiring is one of the many costs that are often overlooked in a company. Whether a company notices or not, hiring costs can be high. Unfortunately, there is no way to completely avoid them because you need people to run your business. However, there are some things you can do to minimize these costs without affecting the candidate quality.

5 Ways to Reduce Costs When Hiring

Here are 5 ways to reduce costs when hiring.

Screen Candidates

Start from the beginning of the hiring process and screen the candidates. The more ways you funnel out your candidates, the less unnecessary time you will spend on unqualified ones. Start by sorting the resumes between the immediate throw-aways and the potential candidates. Then, call those candidates that you want to learn more about. You can screen candidates in various methods including the following:

  • Having a very clear and detailed job posting that specifically asks for qualified workers and waves off unqualified ones
  • Preparing proper interview questions that can notify right away whether the candidate is suited for the position or not (location, certifications, personality, reason for leaving previous job)

The screening call should only take you a few minutes for each candidate. In addition, you should be able to quickly identify who you want to interview and who you do not want to see again.

Going through this process will provide you with a short list of quality applicants, thus saving your company time and money.

You can also provide an assessment test that puts the candidate in an actual job situation.

Don’t want to screen candidates? Let us to the work for you! Short|LYST completes the hiring process up until the actual hiring of the candidate. Learn more about Short|LYST here.

Utilize Job Boards

Whether you have a job board on your website or have an account with a job board like Indeed, utilize those job boards. If you do not get a lot of traffic to your website or have a huge email list, then use a board like Indeed or Monster.com. However, if your website is already optimized, then use it!

Social Media

In addition, social media is at the palm of your hand. Various recruiters are now using social media to find candidates, whether it is through Facebook’s new job posting feature or LinkedIn’s job board.  Not only can you use these platforms to post and promote company announcements, but you can also use them to communicate directly with potential candidates.

Ask Employees to Refer Qualified Candidates

Instead of wasting so much time collecting various applicants from different sources, ask some of your trusted employees if they know anyone that could be suitable for the open position. In fact in a 2015 SilkRoad study, employee referrals produced more hires than any other source studied. Referred candidates are usually of higher quality and are more likely to feel connected to company culture once hired.

Use Short|LYST

The last way to reduce costs when hiring is to use Short|LYST. What is Short|LYST? This platform is revolutionizing the hiring process. First, the candidates apply to one company (The Strategic CFO). We take care of the entire hiring process up until making the decision to hire. Then employers search Short|LYST for their perfect candidate. These candidates have been screened interviewed, vetted, and recommended for hire. Learn more about Short|LYST here.

Reduce Costs When Hiring

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What Should Your Month End Reports Contain?

what should your month end reports containBack in the day, month end reports consisted of a income statement, balance sheet, and maybe a cash flow statement. These are the three statements that made up your financial statements for month end reporting. As technology advanced and people got smarter about tracking trends, analysis, and operations today, the month end report includes much more. In this week’s blog, I answer the question, what should your month end reports contain?.

We should not think of the month end report as just your financial statements. Just as the role of the accounting department and the role of the CFO continues to evolve, so should the month end report. The month end report should be a management report that captures key data that will be used to make decisions and drive the business. It should include much more than just your financial statements.

In today’s world, the CFO does so much more that count beans. They add real value to the company. Learn about the 5 Ways a CFO Adds Value.

What Should Your Month End Reports Contain?

The month end report should include the financial statements. But they should also include operational data, metrics, and dashboards that are both usable and meaningful. Remember, whatever data is provided should be used to make decisions.

In general, for a manufacturing facility your month end report might include the following:

I would argue that the above list is the bare minimum for month end reporting. Depending on your organization, you may have many other indicators that must be tracked at month end.

Having the right indicators will help you make better decisions and add real value to the firm. Access our 5 Ways a CFO Adds Value whitepaper to learn add value in 5 simple steps.

what should your month end reports contain“Analysis Paralysis”

Be careful though… Providing meaningful useful information at month end does not mean overkill with useless data. Time and time again I see businesses adopt dashboards and metrics, but they go to the other extreme and enter into analysis paralysis. What should your month end reports contain? Not so much that there is an overload of information that cannot be used effectively or at all.

Example of Analysis Paralysis

Allow me to give you an example… If you manufacture valves, your revenue is $10 million per month, and your related EBITDA per month is $1.5 million, then does it really make sense to track an expense line item that is $500? I would argue no. It costs you more time and money to track that item individually. If you do track it, then having that data will not lead to big decisions that are meaningful. All expenses and revenue line items are important, but that does not mean you need to track and analyze every penny. If you are a huge company and have a very expensive system that does all this automatically, then good for you.

There is a famous quote that I have used before, “a small leak sinks great ships.” I truly believe that. We do not want to have a small expense item that over time is a problem. But this blog is intended for your standard monthly close reporting and assumes you have your business in order so that you capture and put a stop to those small leaks.

Efficiency

The month end report should not be a binder 4 inches thick. The ideal financial report at month end should be one that the executive team can review in one hour and get a good feel for where the company is and where it is going. This will vary from company to company. In general, the report should be detailed enough to capture the most important items to make decisions, but condense enough so the management team does not spend a full day reading a large binder. Again, this will vary company to company. Some CEOs want the large binder, and that’s fine. Follow your CEO’s request.

The CFO and the accounting department are responsible for gathering this data working hand in hand with the operations. That is why I preach that a good CFO is actually someone that has a very good understanding of the operation. The Controller should also be someone that understands the operation. Furthermore, the CFO and the Controller should understand both the operation and the operating metrics. The CFO must full understand and interpret the operating dashboards and metrics before this information is passed on to the CEO.

When a CFO has a good understanding of the entire business, they are able to be more effective in their role. Learn about the 5 Ways a CFO Adds Value to take your role to the next level.

In Summary

In summary, your month end report should capture more than just your financial statements. It should also capture the following:

  • Capture key operational data
  • Capture information that is useable to make meaningful decisions
  • Key metrics and dashboards for your business and industry
  • Keep it short and sweet so the executive team can review this report in an hour or less
  • Careful not to overanalyze

If you want to add more value to your company, creating a great month end report is a good start. Learn 5 other ways to add value as a CFO with our 5 Ways a CFO Adds Value whitepaper.

What Should Your Month End Reports Contain

Strategic CFO Lab Member Extra

Access your Strategic Pricing Model Execution Plan in SCFO Lab. The step-by-step plan to set your prices to maximize profits.

Click here to access your Execution Plan. Not a Lab Member?

Click here to learn more about SCFO Labs

What Should Your Month End Reports Contain

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The Pain of Hiring | How We Are Altering the Hiring Process

When a company decides it is time to hire someone, it can be an exhausting process. From job postings to interviews, a lot of time and money goes into a company’s hiring process. While hiring can be a burden, it is crucial for a company’s development and success. Let’s dig into the pain of hiring.

The Pain of Hiring

Here are some of the potential downsides that come with the hiring process.

Cost

Hiring provides you with new struggles and worries that might really affect your wallet. First, you must pay for the job posting if you sponsor a job ad. Depending on who your target market and outreach is, this costs a hefty buck. No one’s time is free. After that you or your employees have to spend time interviewing them, you have accumulated a lot of paid time focusing on that position. Now, once you have screened your candidates, there are various routine procedures that can add on to the cost, such as assessment tests, drug tests, and background checks.

Time

Not only does the hiring process impact your financials, it also takes a lot of your time. Countless number of hours go into finding the perfect candidate. From the interviews to the training, time keeps ticking. That is valuable time that you could have been spent elsewhere improving the company, making sales, or retaining customers. Time is money!

Hiring the Wrong Person

Even after spending a lot of your company’s time and money, you still run the risk of hiring the wrong person for the job. If you hire the wrong person, then not only do you have to go through the hiring process all over again, but it can also cost the company in a variety of ways. From decreasing company productivity to impacting customer relationships, hiring the wrong person can have large negative effect. In addition, terminating the new hire can also be a difficult task that is avoidable if you screen, interview, and vet properly.

Learn what to look for when hiring with our 5 Guiding Principles to Recruiting a Star-Quality Team.

How We Are Altering the Hiring Process

Here at The Strategic CFO, we have developed our own unique version of hiring that can save you countless amounts of time and money. Instead of screening hundreds of candidates, interviewing dozens more, and risking not even finding the right candidate, Short|LYST does that all for you. Our team of experienced HR and financial executives take the financial and time burden off from the employers. All the employer has to do is pick and choose which recommended candidate they want to take forward. Learn more about Short|LYST here.

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The Sacred Cow: Lack of Succession Planning

We have all heard the term, “The Sacred Cow”. Here is how I apply it to the business world… I am in my 28th year of working as a professional after graduating from college. I have been privileged to work in large private companies, small private companies, and large publicly traded companies. In addition, I have made the transition from accounting/finance to operations. I have also consulted for companies in a variety of industries, size, and complexity in the last 6 years.

Sacred Cow

The Sacred Cow

After all these years and great experiences, I still see companies that have “Sacred Cows”. That is that employee who has been in the company 20 years and knows everything and everyone. He has outlived reductions in force, down turns in the economy, is still there after 2 new ownership changes. It’s that guy no one can touch because he is a “Sacred Cow”.

Unfortunately, these Sacred Cows are oftentimes not always that good. They come with some baggage. I have seen many of these Sacred Cows. Oftentimes, they are bullies. They are the ones that are often insubordinate. Although they are the ones that get stuff done, it is done at the cost of moral – always threatening the company that on their next temper tantrum they are “quitting”. Usually, they are overpaid.

Perpetual Life of the Business

A business is created within the confines of a legal entity mostly for continuity of perpetual life. That is one of the main characteristics of a Corporation. Therefore, the business continues no matter who is CEO, CFO, or COO or if there any changes in shareholders. But the business will continue because it “has a life of its own”.  As a matter of fact, that is also how you add value to the business. If that is the case, then how do companies allow Sacred Cows to exist? I see it over and over again. Owners of companies say something like…

“If we terminate him, then how are is going to run the operation?”

“But he is our key sales person and he knows all the clients personally.”

“No one else knows what he knows.”

If your business faces any of these situations, then it is your own fault.  No business should be built around a single or two key people. Some exceptions to this rule are small startups or pre-revenue entrepreneurial companies.

The business relies on the leadership to point out the Sacred Cows and destroy the potential of them holding your company hostage. Know what your CEO wants and needs help with with our How to be a Wingman guide. This whitepaper walks you through the relationship between CEO and CFO.

Examples of a Sacred Cow

I have an example that I lived through in my career. (More stories available upon request).

Petrochemical Company – The Lead Supervisor

There is a petrochemical company that had been around over 20 years and was very successful at different levels. The operators worked on three different shifts with each shift having their own supervisor. But the “Lead Supervisor” – the one that all operators and supervisors reported to – was a gentlemen that had been in that position many years. He had a personal relationship with the President and his wife. He was also the one that made hiring decisions out in the plant and control room. Most subordinates feared him. And management played his game because he “knew where every valve was”.

This guy was the Sacred Cow, but he was nothing more than a prima donna bully. There were many other HR issues, but you get the picture.

Since I am one that believes that no company should depend heavily on one person and the company should never be held hostage, I terminated this Sacred Cow the day I was promoted to President of the organization. I terminated him for being insubordinate and for holding the company hostage with demands of more pay or he would quit. I also terminated him for being a cancer in the organization.

Shock waves throughout the organization, rumors of failure spread, and we are going down in everyone’s mind. In reality, we did not skip a beat. It has been 10 years, and I hear the company is doing great.

As the financial leader, it was my duty to protect the health of my company, support the leadership team, and protect the shareholders. Learn more about how you can become the wingman to your CEO with our How to be a Wingman guide.

Client – Fear of Sacred Cow

I recently saw a large client with a similar issue. Now, we are dealing with a management team that fears the Sacred Cow. It is the fault of prior management for allowing this to happen. As the acting financial leader of the company, I am putting up mechanisms to prevent the development of future Sacred Cows.

Lack of Succession Planning

What the Sacred Cow comes down to is a lack of succession planning. There is no plan in place to continue operations without that person (or the position).

Avoid the sacred cow by guiding your CEO in the direction of the company. Access our How to be a Wingman guide here.

Avoid the Sacred Cow (Lack of Succession Planning)

So how do you avoid these pitfalls? There are three things to focus on as well as steps to avoid the sacred cow.

Sales Person That Has All the Key Customers

One example of a Sacred Cow in your business is the sales person that has all the key customers. First, insist that you attend some key customer meetings. You have every right to ask for detailed documentation of the key customers, relationships, meetings, and the pipeline of business. Finally, develop a relationship with those key customers. Do not let one person hold all the cards.

Key Person in Field Runs the Operation

Another example of a Sacred Cow is the key person in the field that runs the operation. Make sure you have a number 2 person that is just as good; they just don’t have the title… Yet. In addition, every key person in management should drive a succession plan. In order to have that happen, the company should have a succession plan in place for its leaders from the CEO on down. Someone can have direct reports under the Sacred Cow in operations. Furthermore, this does not mean that the Sacred Cow controls everything. Have the subordinates that run key areas document their day-to-day functions. Finally, develop a relationship with those key subordinates. Talk to them about training and potentially moving into bigger roles in the future.

The Sacred CFO Cow

The last example is the Sacred CFO Cow. Have a strong Controller that reports to the CFO. Have the CFO document key functions. In addition, the CEO should know those key contacts – legal, banker, insurance, etc. Develop a strong team underneath the CFO to prevent the CFO from becoming the Sacred CFO Cow.  It never hurts to continue networking and meet professionals that you may want to hire one day.

Do Not Allow Sacred Cows to Form

The objective is to not allow Sacred Cows to be born in the first place. We know that they take control and abuse it. But if you do have Sacred Cows in your organization, then you need to deal with it. Build out the number 2 and number 3 person. Every company should also build a succession plan for key employees. And most importantly, do not allow your company to be held hostage by anyone! Be the trusted advisor your CEO needs and access the How to be a Wingman guide.

Sacred Cow

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Sacred Cow

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