Reinventing the CFO: How Financial Managers Can Transform Their Roles and Add Greater Value

by Jeremy Hope

Book Overview

On the heels of a decade of scandals and the new pressures brought on by the Sarbanes-Oxley Act, corporations expect far more from their CFOs than simply managing the numbers. They expect decision-making support and performance insights that can improve bottom-line results. Unfortunately, the complexity and detail inherent in CFOs' jobs keep them shackled to budgeting and transaction-processing systems that leave little time for value-adding activities. Jeremy Hope says it's time to redefine the role of CFOs in today's organizations, liberating them from ineffective number-crunching responsibilities and enabling them to focus on helping managers improve performance. Grounded in extensive research, Reinventing the CFO outlines seven critical roles--from streamlining redundant processes to regulating risk to identifying a few key measures--that CFOs must take on in order to successfully transform the finance operation. Challenging many of the finance field's accepted practices and systems, this bold book revolutionizes the role of financial managers and frees them to make smart, ethical, strategic decisions that add real value to the firm.

• Format: Hardcover
• Language: English
• ISBN: 1591399459
• ISBN13: 9781591399452
• Release Date: March 2006
• Publisher: Harvard Business Review Press
• Length: 272 Pages
• Weight: 1.26 lbs.
• Dimensions: 1.0" x 8.0" x 9.3"

Customer Reviews

A Great new angle of Financial Visiton

I just received this book last week and started reading. This has been an easy read with lots of good pointers. I kept a highligter close by the entire time I have been reading. As a CFO I often feel buried in beurocracy but this book gives ways the CFO can free themselves from some of this drudgery.

Required reading for leadership

I'll be brief given the previous detailed reviews. My view is that the author provides great insight based on my experience working for large companies struggling with many of the issues described in the book. The author did his homework. The principles are clear and nicely discussed. This reading is valuable to those aspiring to finance leadership. I don't agree with everything the author states; more tangible examples would have been helpful; and some, important points were noticeably left out (in my view). Nevertheless, it is a great, insightful piece of work worth serious consideration by those in the business.

Reinventing or sidelined

I have read this book. I would like to offer a brief review. A solid book to challenge the accounting profession to be more relevant, strategic and value-adding in view of current business environment. Indeed, CFOs need to re-invent their roles and functions or else they will be sidelined (extinct? probably not due to statutory provision). I always don't see eye-to-eye with traditional accountant in its approach and emphasis and after reading this book, I am glad I am not alone! Excellent re-inventing materials but in my working context would be difficult to implement in companies I worked in (I am a Malaysian and have been working in Malaysia, Cambodia, Vietnam and Indonesia) as the companies I have worked in were "top-down" command and control type. They expect CFOs/Accountants to behave in the traditional way (details complexity, conservative and bean counting). Dear author Mr. Jeremy Hope, do write more books to guide and challenge us! More books on "how to".

How to redefine a role "that is fast becoming obsolete"

I agree with Jeremy Hope that those who are -- or who aspire to become -- a CFO need to understand that, as Hope explains, "too many CFOs...remain prisoners of dysfiunctional systems and mental models that were developed for a role that is fast becoming obsolete." That is to say, the position of CFO must be reinvented. However, my own opinion is that that will not happen unless and until governing boards and CEOs insist that CFOs be centrally involved as part of the senior-management team running the given business. The same is also true of CIOs and heads of HR. Today, CFOs face a number of extrernal pressures. For example, new success drivers such as strategic planning, resource allocation, and performance measuring systems as well as a new regulatory environment and more demaning shareholders. With regard to internal pressures, they include too much detail and complexity, inadequate forecasting capability, too little understanding of how to reduce costs, and a lack of risk management expertise. In this volume, Hope addresses with rigor and eloquence a number of key issues that the CFO and her or his finance team must accommodate to transform the finance operation. He suggests that the CFO be viewed in several different roles: As a "freedom fighter" who liberates both finance and business managers from "huge amounts of detail and the proliferaion of complex systems that increase their workload and deny them time for reflection and analysis" As "analyst and adviser" who, by breaking free from detail and complexity, "creates time for finance to provide the information that managers need to make effective decisions" As "architect of adaptive management" who enables managers to be liberated by releasing them from "the chains of the detailed annual planning cycle" by replacing targets and budgets with "effective steering mechanisms, including continuous planning reviews and rolling forecasts, that enable managers to sense and respond more rapidly to unpredictable events and to changing markets and customers" As "warrior against waste" who with her or his finance team is able to focus on "huge swathes of costs that have remained unchallenged for years" As "master of measurement" who brings measurement back under control and provides clear guidance about its meaning to managers at every level who, with rare exception, only need six or seven measures As "regulator of risk" who provides an effective framework for good governance and risk management "by using multiple levers of control that support corporate governance controls, internal controls, strategic controls, and feedback controls" In the final chapter, Hope focuses on the CFO as "champion of change." He cites a number of exemplary CFOs who have transformed their finance operations, examining how they started, what vision or goals they set for themselves, how they got buy-in from key people, and how they implemented the changes. His case examples include American Express, Tomkins, and the

How CFOs move beyond managing numbers

Jeremy Hope's REINVENTING THE CFO: HOW FINANCIAL MANAGERS CAN TRANSFORM THEIR ROLES AND ADD GREATER VALUE tells how CFOs are moving beyond managing numbers and reports: now companies except them to provide strategic support and leadership to enhance manager performance and bottom line alike - on top of their jobs of budgeting and processing transactions. Jeremy Hope has co-founded the Beyond Budgeting Round Table, a nonprofit collaborative helping organizations improve performance management - and REINVENTING THE CFO tackles the nuts and bolts, outlining seven roles CFOs must embrace to change their company's finance operations. An excellent set of reflections on the changing CFO role and how to achieve the most from it.