To survive in today’s fast-changing business landscape, companies must develop exceptional skills in financial planning for the future. But constant economic uncertainty is making accurate forecasting more difficult than ever. Fortunately, planning, budgeting and forecasting can be successful with the right business intelligence (BI) tools. Powerful BI tools can decentralize the organization, optimize workflows and…
For decades, financial managers have pieced together and manipulated spreadsheets in order to report on past data and maintain the financial integrity of their businesses. Sure, if they had time, they could use these primitive tools to attempt to identify trends and offer insights. But this effort was ridden with information silos, dirty data and…
Decision fatigue is a recent discovery that describes how our mental energy is depleted by making several decisions. As our day wears on, our decision quality wears out.
We begin to make decisions based on the path of least resistance.
If a decision requires a bold step into unfamiliar territory, we will tend to say no. It’s easier to maintain the status quo.
Conversely, if the request is accompanied by a cadre of strong supporters, it’s easier to go with the flow and approve the proposal.
Decision fatigue also causes us to simplify our decisions. Instead of weighing multiple criteria such as risk minimization versus income maximization versus workforce impacts, we focus on a single attribute and choose accordingly.
[But,] It’s important to note here that we are completely unaware of decision fatigue.
I have a gripe with the accounting profession. My gripe is with the fact that accounting information delivered to most business owners is old news. Stuff happened, the professional properly recorded it and reported on it, you paid your taxes, and that’s that. Game over.
I’m a fan of the television series, Mythbusters… getting paid to blow things up is one of my dream jobs.
Sitting comfortably in my sofa, it’s temping to think, “Hey, I could do that!” Whether dynamiting a cement truck or creating a massive fireball from non-dairy creamer (really!), I’m tempted to dismiss their “Don’t try this at home – we’re professionals” warning as mere hype.
The source of this over-confidence is simply that I don’t know what I don’t know.
According to many CFOs, the firm really needs to set aside more of this money for investments that will move the business forward in growth and profits. This frustration is a reasonable sentiment. Diverting scarce capital into projects that merely “keep it running” are hardly awe-inspiring.
But what jumped out at me was one culprit, or should I say scapegoat, that many CFOs blamed. One respondent was quoted saying that the “basic foundational structure of IT is inadequate to take the company forward, but no one can build the business case to tackle it.” (emphasis added)
Really? The current infrastructure is holding the company back but no one can demonstrate the value of improving it?
What kind of CFO are you? Are you a magician or a multi-linguist? An ethics officer or athlete? Or all of the above?
We live in an unpredictable world where the future is uncertain. If it was then we would all make a fortune by making strategic ‘bets’ on certain outcomes – we would know what products and services to back, what level of stock and staffing to have, and when and where to market our capabilities for maximum effect.
But the world is not like that.
Collisions between the Finance Department and… well, everyone, are the stuff of legends. In most companies, business teams are as likely to voluntarily ask Finance for help as a Russian citizen would ask the KGB for help. Instead, teams develop strategies to keep finance at arms length as long as possible.
CEO compensation is one of those areas companies want to get right, especially if it means avoiding the ire of customers or the wrath of a Board / Shareholders. In theory, it makes sense.
But what about measuring CFO performance? Does anyone really care?