I did not write the CFO Bible. My opinion is not significant…except for the fact that I have been a CFO, and have trained and witnessed more than a thousand CFOs at this point in my career. What should be important to you and your respective hospices is how competent you are as a CFO.
As I have stated many times, the power and influence of the CFO position is immense. A CFO can have the personality of a cardboard box and, if armed with convincing data, will sway the opinion away from even the most charismatic presenter. The CFO has, or is presumed to have, important knowledge, that we all know on a very deep level, is directly correlated to an organization’s survival. The CFO usually knows if the organization has enough nuts squirreled away for different scenarios.
If you are in this influential position or have this title, it is important that you are or become a Top CFO. Average number crunchers and Captain Crunch are a dime a dozen (ok, maybe a bit more). But extraordinary CFOs DO NOT do the same things as average or ordinary CFOs. They do things that outliers do. They are and always will be the minority and live in the upper extremities of the bell curve. Top CFOs are inspirational, approach problems differently, are more than the numbers and they are devastatingly effective at getting results in short periods of time. In fact, they think differently and therefore do things differently. They are courageous enough to recognize what works as well as what doesn’t, discarding what doesn’t work while adopting what does.
Please do not kill me over my commentary. I am just trying to move organizations forward. However, many times, CFOs are the blockers of innovation and hold CEOs hostage as the fear of disruption or some financial unknown keeps them from moving forward towards their vision (an essential component of a CEO’s primary job). As a group, CFOs are slow to change and get stuck in mindsets that keep them from being as effective as they could be. Now, I am quite certain that this ideological stiffness may be characteristic of humans in general rather than isolated to the CFO species. (what is the singular of species???) But since this article is targeted toward a particular audience, it is fitting.
I would like to point out a few points that one can use to assess the CFO position. I want to destroy mindsets and habits that perpetuate mediocrity and conformity. I am a bit dismayed that some CFOs or leaders attend the CFO Program and return to their respective organizations only to keep doing the same things. This is their prerogative. No doubt, I did not get through and I need to improve my teaching always. But the intent is more right than wrong. It takes courage (guts) to go against tradition and stop doing what is the status quo. I think that it is also fun and liberating to “choose to become an outlier” in the accounting field…and the world will compensate you extraordinarily well (monetarily and psychically) for being outstanding at your trade.
Here are some stock practices that we think extraordinary CFOs do (or don’t do!). Obviously there are many other things that could be included in this list. But I would say that if these are being done (or not done), you’re quite the CFO!
- The CFO works deliberately to understand and implement the CEOs vision.
- The CFO should be perceived as a person of complete integrity, energy and capability. When the CFO enters the room, the atmosphere should be positively charged and lift others! The “CF-No” image is not present.
- F9 is used for financial and statistical reporting. F9 is the most powerful financial report writer in the world that allows the creation of any GL related report within the structure of the Chart of Accounts. This gets a hospice away from “spreadsheet” accounting and saves tons of truly wasted time.
- Unit or Memo Accounts are used to automatically apply operational statistics to financial amounts (as well as for easy monthly benchmarking). Normally these statistics, at minimum, are Patient-Days, Visits by Discipline and Visit-Hours by Discipline. Visit-Hours by Discipline are essential for obtaining a whole spectrum of cost views to be a Managed Care Organization.
- The CFO “gets” benchmarking and realizes that such perspective moves leaders from the ranks of amateurs to the ranks of professionals. If a hospice does not know where it stands in relation to others, it is NOT a professional organization as it is not conscious of what is possible or even where it excels. Ignorance here costs hospices millions!
- Traditional budgets and the budget process are eliminated. Instead, NPR%s are used to manage the organization and tie every area to core operations. The joke of traditional budgets is accepted and the process only takes minutes thus allowing CFOs and leaders time to focus on on-going operations so that innovations can be incorporated rapidly.
- The CFO helps lead the hospice to become a true Managed Care Organization, becoming an expert at knowing and understanding all of the important views of cost.
- The CFO is an incredibly effective teacher. A CFO will never be top-rung until he or she can see the future and convince/influence others regarding the ideas of balancing purpose and financial realities. Like other top leaders, the CFO must learn methods of top teachers such as being interesting, making the subject meaningful and helping students be confident in what they have been taught.
- The CFO helps to create and continually refine the organization’s proprietary Model. The CFO works with clinical leaders and staff to establish a sustainable system of care that creates a high-quality, predictable experience for everyone.
- The CFO never recommends a RIF or layoff but rather understands that a vastly better financial result can be accomplished by increasing standards and holding people accountable.
- Creative compensation systems are not feared, but rather are used to create a fast, productive and happy culture.
Again, these are just a few points. There are many others for sure. But recognizing that each of these points benefits a CFO personally as well as the organization is a true motivator. As a CFO, can you imagine redeeming MONTHS of your life back by simply not doing a budget anymore? Or freeing time from being a high-priced data-entry clerk? And what about learning valuable life-skills (teaching and courage) that will help you be a better parent and an even more valuable person? Breaking mindsets and stopping traditional activities takes courage. I’ll leave you with one last thing to think about:
To continue to do traditional budgets is madness!!!
~ Your objective friend, Andrew