Prioritize Timely Identification of Risks and Opportunities
CFOs Having Enough Experience Critical to Be a Strategic Partner
I’m not certain this is a new development. Successful companies have been using CFOs as strategic partners for some time. CFOs have to be great business people, and the most successful CFOs I know have had an opportunity to lead a business at some point in their career. Having that experience is critical to being a strategic partner.
Focus on Quality over Quantity of Forecast
Our finance teams are focused on quality over quantity with forecasting and planning data. In fact, we recently reduced the frequency of our forecasts, and increased the time spent in the business partnering to enhance alignment of the financial outlook with key business drivers. We prioritize the timely identification of risks and opportunities. Having insight into the range of possible outcomes supports better scenario analysis as a predictor of final results and keeps our finance teams forward looking.
Finance Team as the Strategic Business Partner
Basis points matter in our business, so all leaders have financial focus, not just the finance teams. We expect our finance team to play the role of strategic business partner. We challenge our associates to understand the customer, market and financial strategies of the businesses that they support and to be involved in key decisions for each business unit. And most importantly, we are increasingly focused on hiring employees who have a wide range of business skills.
Maintaining Innovation Fund Outside Main Budget
Our business units make ongoing investments in a base level of product and service model innovation within their budgets. We also maintain an innovation fund outside of their budgets. The fund supports strategic initiatives that won’t have a positive return in the current year. Having access to the fund frees business leaders to take calculated risks and to kick off projects which will return longer term benefit to the Enterprise, without impacting their ability to achieve annual operating budgets. Projects with the biggest returns and strongest alignment with our strategic priorities are funded for a “start-up” period and then transition into operating budgets thereafter.
Flexibility to Invest in Future Options
The pace of change in our healthcare industry is accelerating. Success will be correlated with our ability to think differently about how we service and add value to our customers’ supply chains. As we build our strategic and financial plans, we have been increasing focus on our current strategic priority areas, while maintaining capital flexibility to invest in future options for growth. Finally, as our customers face increased cost pressures to improve health outcomes for less total cost, they’re putting pressure on us to be help them achieve that, therefore enhanced analytics and application of insights are critical for this transformation.