Editorial

Citation

Norris, M. (2001), "Editorial", Strategy & Leadership, Vol. 29 No. 5. https://doi.org/10.1108/sl.2001.26129eaa.001

Editorial

The March/April 1998 issue of Strategy & Leadership was developed around the theme of "Financial strategies: a new approach." That issue contained an article by Tom Walther and Hank Johansson, describing their observations about the changing role of the CFO. Apparently their ideas struck a cord. Sometime after the issue came out, the American Management Association (AMA) began designing and presenting seminars and conferences on the topic. In February 2001, I attended one of these conferences to meet business leaders who had new things to say about the strategic function of finance. Some of the conference presenters have been included as authors in this issue.

In my consulting work, I must admit I still see some resistance by finance to being a true partner in strategy development. One hopeful sign is that the younger generation of finance managers seems eager to be involved. They tend to view the work of the organization as a system in which the parts must work together to reach the ultimate goal. They have somehow avoided (or overcome) the "tunnel vision" of their predecessors.

On the following pages, our authors present ideas that are intended to expand your thinking about the role of finance in strategic planning:

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  Paul Favaro discusses the evolving role of the CFO as strategic business partner, manager and integrator of information systems, overseer of the relationship with investors, and leader of value creation throughout the company. Check your CFO's job description against Paul's proposal.

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  Pamela Kalafut and Jonathan Low describe the value creation index, a rigorous model for assessing the contribution of intangibles to a company's market valuation. You many be surprised to see what factors drive value in your industry.

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  Bruce Wright shows how rethinking finance and accounting processes can shift their after-the-fact, historical perspective to providing a more dynamic information flow in support of current business decisions. He also points out the value of using the Internet to facilitate information access.

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  Martin Mand and William Whipple explain the importance of cooperation and integrated decision-making between the finance and operating functions of the business. Such a partnership allows financial considerations to be addressed in a timely fashion while minimizing the disruption of operating objectives.

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  Richard Clark and Brian Morgan present a case study of a reengineering effort in Monsanto's Integrated Financial Services (IFS) group. By establishing metrics early in the process, IFS created a Measurement-Managed Organization™ and was able to sustain productivity through numerous organizational changes.

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  And don't miss David Braun's comments in The Strategic Leader. He points out the importance of financial executives' involvement in several stages of the acquisition and divestiture processes.

In their 1998 article, Walther and Johansson cite a Coopers and Lybrand study in which 63 percent of finance managers perceived themselves as advocates for the business while 61 percent of general managers perceived finance as policemen. If that study were to be repeated today, I wonder what the results would be.

Marilyn Norris Editor