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Where Should CFOs Spend Most of Their Time?
This is a good question, not only for a CFO but for the CEO (Chief Teaching Officer) and all Managers and staff!
Here are my ideas:
- People Development – Why? Because all quality and profits will come from people. Your staff needs to be given the knowledge/skills as well as learn how to actually utilize this education to impact the world. Why would you expect from people any other result than what you have taught or not taught? People can’t give what they don’t have… So how well is your CFO teaching? How well is the CEO (the real CFO) teaching? The evidence is in your numbers!
- Compensation Systems – What is the #1 cost of a Hospice? Payroll/People right! 60-65% of a Hospice’s total costs are payroll, not including the practices associated with those people you pay, which constitutes the remaining 40-45%! So really, 100% of our costs link to people! Then why wouldn’t you have your best financial brain working on this continually? This takes work. It takes an understanding of human behavior. It takes courage to face the fact that “people behave the way they are paid in all circumstances” and then to create compensation structures (financial as well as non-financial) to help inspire, motivate and retain Talented people so that turnover is 10% or less! Your compensation system is a critical part of your teaching system as people learn from how they are paid. They must link cause and effect as frequently as practical (annually is a joke). Compensation is how you VASTLY increase Accountability structurally. 100% of the Hospices that operate in the 90th percentile employ creative and non-traditional compensation systems. So with this in mind, I think this might be an indication of a good direction…
- Analysis & Contemplation Work – This is a hard grind and takes some time… It often comes on your own leisure, but a great deal of the fuel you will need for the advancement of the organization will come from a CFO’s contemplation of the allocation of resources. And I will share this… most of the insights will NOT come from the analysis of data! It will come from “intangible” things like “atmosphere” and understanding the “essence” of things. Furthermore, this “analysis work” is not just based on internal data and observation. An equal amount of your contemplation, if not more, should be focused on external sources. Why? Because you already know what you know! Your organization is doing what it knows to do based on the horsepower that is already in the stall! With Humility, one understands that there are teachers in the form of other world-class organizations and individuals that have already solved or have improved upon the very practices that you are working on! Ego seeks to be “special” or unique. The truly Integrous will forgo the benefits of an ego payoff for higher ideals.
- Reporting – This should take all of an hour, even for a 40 location Hospice, including the reports that go to the Board of Directors. The BOD should be using basically the same reports as Management, which would naturally include your Hospice benchmarked against all other Hospices. This is critical so that a BOD (as well as each Manager) has professional perspective and is not making decisions blindly.
This type of value-added thinking is what is needed for ALL positions in an organization. I write about the CFO (as well as the CEO role) simply because I have done both in multiple Hospices.
Serving from a place of Love for all ~ Andrew, CEO & Chief Teaching Officer