Managing strategic relationships requires that the CFO, in collaboration with the CEO and the executive team, establish measurable performance objectives for the contribution of each relationship deemed important to the success of the business. The accountability for each measure is assigned by the CEO to key executives along with appropriate objectives and time frames. The CFO's primary role is to ensure the information needs to assess performance are made available to the accountable executives in a timely fashion. The CFO will also make sure the measures are integrated into the overall operating plan.

In the case of the Board relationship this also requires an understanding of the flow of information to the Board and the CEO's commitments to the Board.

CFO's that do not establish a plan with the CEO to ensure strategic relationships are monitored and measured will constantly be impacted by 'surprises' which are a direct result of growing out of touch with key stakeholders. The financial impacts of these surprises range from delayed payments, material shortages, or missed sales opportunities. Furthermore, without automated processes supported by business solutions / reporting, nurturing strategic relationships becomes an onerous task, consuming resources and executive time as their team's manually generate key background information each time executive meetings are held with key stakeholders and partners. CEOs are also less responsive as a result, as this extra time required to collect key information imposes delays while somebody in the business builds a spreadsheet on a one-time basis after extensive manual data collection activities.

Talented people join companies and contribute over the longer term at companies which develop their skills and provide challenging opportunities, among other reasons. While generally the executive responsible for Human Resources focuses on attraction and retention of key talent, the CFO plays a critical role in integrating the needs for human capital with the strategic and operational plans.

This includes the short and long term financial impacts of human resources, but also includes an assessment of the value of critical human resources which are essential to the business.

While the smooth integration of human capital costs into the budget is fairly well understood, the downside risk of key missing key capabilities in the business is not always obvious, nor is it easy to value. The CFO must drive the business to understand these human capital values and their integration into the operating plan.The impact of being unable to assess these key human resource capabilities can be substantial and can lead to performance decreases in every operational function in the business.

The company's brand is impacted through every interaction the company has with its ecosystem. The CFO's role is to work with the executive team to establish key measures which demonstrate the financial impact of brand-destroying activities. In most organizations brand-impacting activities are associated with independent measures over which each operational area has accountability. For example, service might use customer satisfaction as a proxy for their efforts in supporting brand, while product quality might be used by manufacturing as their primary measure in supporting the company's brand. Marketing might use brand awareness measures.

The role of the CFO, however, is to work with the executive team to determine the integrated view of all functions of the company in their quest to maintain and improve brand. This includes a view of costs and benefits and optimizing overall efforts to maintain brand.

Companies ignore the integrated view of their brand at their peril. The impact of a company treating brand in traditional silos is obvious. Customer experiences with the same organization can be extremely uneven. For example, over-investment in customer service will never compensate for product quality which is found wanting.

Often the executive team will establish a long term direction for their business in terms of profit and growth goals, market impact, brand and other strategic elements. Regrettably, these goals are not often translated into measurable period-by-period objectives that can monitored in the annual operational plans. The primary reason this translation does not take place is because the company is forced to restrict its measures to a few key KPIs because of executive capacity and the absence of business systems which enable the creation of the full range of KPIs required to measure progress towards the strategic goals.

The CFO plays a key role in creating a financial operating plan which is linked to the strategic plan. The KPIs which are established in this linked operational plan must be measured in the processes and systems of the company through a reporting process established by the CFO. The chances of a company achieving its strategic plan in the absence of this operational planning and reporting layer is very low.

All organizations establish goals to improve their operational performance. The areas of operational excellence typically of most interest to the CFO relate to improving the efficiency of internal processes by reducing costs. Additionally, the CFO is usually accountable for the systems and reporting to measure operational effectiveness and efficiency across the business.

Achieving operational excellence depends on the CFO's ability to provide the necessary measures and reporting  to assess necessary KPIs. Also, processes must be in place for the executive team to review the goals for operational excellence and take corrective actions.

Often senior executives do not fully understand the linkage between the culture they aspire to develop in their company and their internal processes and systems. If, for example, the company is developing a culture which promotes innovation, adaptation and time-to-market, the absence of internal enablers such as executive supported company wikis, fluid and responsive internal administrative processes, and mobile technologies might be an unintended brake on this goal.

The CFO's role in establishing internal processes (time, expenses, policies, etc.) can do tremendous damage to company culture, if not aligned to the company's vision of culture.

The CFO is a key partner in maximizing shareholder value, which is a primary concern for the CEO. Even in the case of privately owned companies the owners / CEO are focused on maximizing the value of the company. Measuring corporate value requires the ability to assess the impact of multiple strategic investment and financing options on the future value of the enterprise. Assessing investment alternatives and their impact on the business requires solid operating information and reporting, in addition to the tools required to simulate the value of the enterprise. This accountability generally rests with the CFO.

When the CFO's performance is sub-par in this area, the business generally suffers from lofty objectives that can never be financed, or over-investment in the wrong areas which yield a poor return, or under-investment in high-yielding opportunities which never make the substantial impact they might have if properly financed.

This is a critical issue, in particular for public companies. In all cases companies need to be concerned about this issue as any form of non-compliance leads to additional risk and cost for the business. Unresolved compliance issues ultimately lead to increased risk and cost for the company. A significant risk of non-compliance is an increased cost of capital as financial institutions are loath to lend to organizations with compliance or the liabilities resulting from compliance issues. In addition, quality Board members may resign.

In many organizations the CFO is accountable for compliance in addition to their financial accountability.

All businesses have environmental objectives either due to regulatory requirements or as a result of corporate social responsibility programs. In particular, companies involved in handling and tracking of hazardous goods have very specific environmental regulations to which they must conform.

Generally the CFO is not held accountable for managing environmental issues, but does have a responsibility from a risk management perspective for understanding the cost and implications of non-compliance.

Badly executed budget and planning process

Budgeting and planning are generally taken for granted in most organizations, but in many cases are poorly executed. Often the CFO  will work with the business on developing multi-year plans and annual budgets only to discover that key assumptions about the budget were incorrect or that material changes in the business environment make the current budget invalid.

The ability of the CFO to make the budget and plans a key component of linking strategy and the operating plan is critical to optimizing business performance. If this is not achieved the budget becomes a form filling exercise at the end of each measurement period, little insight is gained from the process, and worse, no actions are taken to respond to the factors creating under-performance.

Many companies struggle with planning systems which are not integrated to  operational systems. As a result, there is often a lack of real time synchronization between budget reports and fast moving operational factors such the closing status of key deals in the sales forecast. In fact many planning systems represent an aggregation of many factors which are not easily translated into operational measure. 

This generally exposes the CFO to significant implications if surprise misses for revenue or profitability targets are experienced. This can have catastrophic impacts on the company, and in particular those that are not well financed. In economically uncertain times this this can greatly effect a company's ability to obtain financing and increase their cost of capital.

In many companies, in particular mid-market companies, systems evolve from departmental-based silos. Rarely do companies evolve beyond those silos unless a solution is implemented which provides an integrating platform. This problem is the bane of most CFOs and CEOs. They understand this approach to management optimizes independent business units or departments at the expense of overall company performance.

The CFO is accountable for providing cross-department processes which optimize performance at the corporate level instead of the departmental level. Also, the CFO must ensure that everyone is working with the same "numbers", instead of data sourced from departmental silos.

Poor quality can destroy the image of a company's brand faster than any other factor. One only needs to think the huge implications to a food company which experienced a product recall after making consumers ill. Another good example is where poor quality customer satisfaction significantly depreciates the value of an exceptional product or service. The quality issue in both cases leads to a dissatisfied customer and ultimately a loss of revenue and perhaps other increased costs. Quality is a key factor in company processes which "touch" external end-customers (such as customer support), key partners (major suppliers or resellers / distributors). Lastly, many companies also understand the importance of the quality of internal processes which may ultimately affect employee performance and also employee satisfaction and retention. The absence of quality in any of these dimensions leads to additional cost and revenue loss.

The CFO has an important role in leading quality initiatives in their direct span of control and enabling other quality initiatives. Additionally, the CFO in collaboration with IT is responsible for ensuring integrated processes exist which drive quality in the business.

Financing comes in many forms (short term lines of credit, leasing, long terms loans or debentures, and equity). Most owner / managers of mid-market companies will avoid equity financing as it dilutes their ownership position and over time could result in a loss of control in the business. Obtaining debt financing generally requires healthy business results and regulatory compliance in all operating countries. Healthy business results do not simply imply revenue growth, but positive cash flow and sufficient working capital. Very strict operating discipline is required to track business KPIs to ensure working capital is at the right level and that costs and significant receivables are managed tightly to ensure positive cash flow. With respect to regulatory compliance, financial institutions will not lend to companies that have exposure to undeclared (or even worse - unknown) financial liabilities (such as unpaid taxes) from their operations in foreign countries.

The CFO is generally accountable for managing financing and must work with the executive team to ensure the business optimizes its cost of capital.

In many companies, and especially small or mid-sized companies, managers and executives find their time consumed in running the business. As a result, performance management of their direct reports and tracking of key KPIs is rarely executed at the desired level. Often, under-performance of key direct reports or operating units is discovered much too late, requiring drastic action to recover. Many times the accountability for key measures might not be clear, simply because the KPI cannot be measured frequently enough, if at all.

It is the responsibility of the CFO to develop a solution to report key performance measures in an automated and timely fashion, allowing management to assign accountability for KPIs to direct reports. This allows the managers in the business to take timely, corrective action to assist their direct reports to continue to be successful in the business.

Very sudden changes can wreak havoc on the best run companies. Significant change for which a company does not develop a response leaves the company vulnerable, resulting in significant negative performance unless a company is nimble enough and its systems adaptable enough to make a quick course correction. Examples of significant changes might be: changes in customer buying due to economic downturns, loss of a major customer, rapid price increases of important supplies, new regulations, loss of key employees, etc.).

The ability of the CFO to assist the business to respond to these types of challenges is important. This issue goes beyond the typical shortfalls predicted by an early warning system, but speaks to the ability of the business to adapt itself quickly in an unanticipated direction. The CFO is a major change agent in these cases and must be prepared to adapt internal processes and systems to the necessary change.

One of the primary functions of the CFO is to manage the company's finance and administration processes. In this capacity the CFO will establish key areas of performance which require improvement and communicate to the appropriate areas of the business expectations of improvement. this covers many areas, for example, issues with outstanding receivables with particular customers.

In the absence of smooth running accounting and finance processes and systems, businesses are sure to fail. This is a core foundational requirement for every company.