This is the 4th in a series of business tips from industry leaders that Enterprise Times has interviewed.
In a recent interview with Gordon Stuart, CFO of Unit4, Enterprise Times asked him to share a tip for CFOs. Earlier this year Stuart wrote a blog in which he laid out five tips for CFO’s to follow during the pandemic and lockdown. Enterprise Times asked him whether he could add a sixth tip for the current climate.
The fire drill concept
“I used to work for a business that was bought by an American company about 20 years ago called Fair Isaac (FICO). They had this futurologist and the question that the CEO always asked him was ‘When anyone asks me about Long Range Planning, what should I do?’ His answer was always ‘stamp it out!’ Because in the world, we are in now, you can’t plan for what will happen in five or ten years, because nobody knows.
“Therefore, my view is that as a CFO, you need to build this agility to be able to manage forecasts and business plans within what is now a very dynamic and uncertain environment. It’s no good saying, ‘this is my plan, and I have to stick to it’. It’s, ‘this is my plan, and when something happens, I need to know how to react to it’. I try and get my teams to think about the fire drill concept, as I describe it to them. Which is, when a fire bell goes off, everybody knows what to do. They don’t form up a meeting or a committee and wonder why there’s a bell ringing. They get their jacket, phone and their wallet and they go to Starbucks.”
What it means for your business
“What we’re trying to build into the business, is when stuff happens, we’ve planned how to react to it. If we suddenly saw high levels of customer attrition, or if we saw particular products not selling or we saw difficulties in particular markets, or we saw costs rise: we’d know what we’re going to do about it. My tip for CFOs on this would be to understand your organization’s business model well enough that you understand how the different levers move. When something happens, you know which lever to pull to try and course correct.”