Reprinted with permission from CFO and Controller Alert 800-220-5000
Originally Published in CFO & Controller Alert | August 15, 2014
75% missing the boat when it comes to saving
Hide all the scissors in the supply closet! There’s some dangerous cutting going on in many companies:
Those misguided efforts can prove expensive for companies of all sizes.
With budget season just around the corner for many, now’s the time to ensure your organization hasn’t fallen into any of these bad habits that could hamstring your future growth.
These three strategies can help.
Strategy 1: Clarify goals
You’ll be locked in an uphill battle to spend (and cut) more strategically if everyone isn’t crystal clear about the direction your company is going in and what the current priorities are.
Two main things seem to be standing in your peers’ way:
1. Just 22% of execs said budgeting at their company is aligned with strategic planning.
2. Two thirds (66%) said lower-priority initiatives or areas are receiving more than their fair share of funding.
So yes, you need to have a clear vision of what’s important to your company in the coming year, and perhaps for the few years after that.
But you also have to make sure that’s being communicated clearly to all department supervisors.
And don’t take for granted some non-financial departments will understand on their own what initiatives will cultivate new revenue streams. You may have to break things down and possibly offer them filters to pass their requests through before they make them.
Strategy 2: Go back to zero
Of course, at times the best way to fix a broken process is to go back to the drawing board.
The folks at Strategy& suggest you do a periodic zero-basing exercise. That way you can scale back in the less-critical areas and redirect funds from them to more critical needs.
Will take some time, for sure. But working off the same broken process or simply telling everyone to prune 3% from what they spent last year won’t nab you strategic cuts you need.
Strategy 3: Revisit what you reward
While you’re looking at the front end of the budgeting and cost-control process, be sure to revisit the back end, too.
Most companies have built budget compliance and cost-cutting success into managers’ variable compensation structure. A good thing.
Now go one step further: Be sure those dollars are tied to strategic cost-cutting.
So it’s not enough just to cut 4% in departmental spending; those cuts – and the spending they allow – should advance your overall business strategy. That’s worth rewarding!
The strategy shift most CFOs are making out of necessity
Your peers are going long – as in shifting their focus to long-term growth for their companies.
That’s the finding of a new survey of finance execs released first exclusively to CFO & Controller Alert by The Consero Group.
But the shift may be because too much economic uncertainty lingers in the short term.
In fact, 43% of the CFOs asked said economic uncertainty is the biggest area of risk in the coming year.
An opportunity … and a caution
That attitude shift presents an opportunity for you to further your own strategic plans with your company’s key customers and suppliers.
Since most of them want to focus on extended growth as well, the time is right to address how your own business fits with their long view.
But be careful. Some of your trading partners may not be working from the most reliable data to make some of those decisions.
Nearly three-quarters (72%) of CFOs said they weren’t satisfied with the level of insight they can extract from their company’s data.
So as you look to the future be sure to tread carefully and ask plenty of questions of any supplier or customer you’re in for the long haul with.
(The 2014 Chief Financial Officer Data Survey was developed in connection with an invitation-only event hosted by Consero Group in May 2014 for Chief Financial Officers from Fortune 1000 companies, www.consero.com)
Workplace bully cost this employer $4.7M
15 states considering new laws to protect employees
Is that staffer just a jerk or really a bully?
The stakes have gotten too high not to find out … and act accordingly.
A Brooklyn employer just had to pay $4.7 million to an employee who was ultimately assaulted by a co-worker – a culminating act after repeated bullying behavior.
That’s the largest award ever in a workplace bullying incident.
And while the employer maintained the bully’s actions were no more than “banter” between co-workers, a court disagreed. And because supervisors did nothing to put a stop to the harassment, the company will pay the (steep) price.
Your state may soon get involved
With numbers that large, it’s clear that a step like an anti-bullying policy isn’t just a job for HR.
It’s more than just a smart move – your state may soon require it.
Currently 15 states, including New York, Massachusetts and Florida, are considering legislation to protect employees from workplace bullying.
Read more here.