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1 Copyright 2014–2015 AICPA Unauthorized Copying Prohibited AICPA Professional Development
The New Controllership: Keys to Boosting
Corporate PerformanceBaton Rouge Louisiana12.9.2014
Presented by:Joseph M. Rugger, CPA, CGMA
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The New Controllership: Keys to Boosting Corporate PerformanceChapter Title
Introduction
1 The New Style Organization
2 Leadership vs. Management
3 Hiring the Right People
4 Personality Types
5 Employee Motivation
6Leading People in the Organization of the Future
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Chapter Title
7Planning and Budgeting in the Organization of the Future
8 Risk Management
9Customer Service and Efficiency in the Accounting Department
10 Benchmarking, Ratios, and Controls
11 Cash and Debt Management
12 Welcome to the Cloud
The New Controllership: Keys to Boosting Corporate Performance (continued)
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The New Controllership: Keys to Boosting Corporate Performance (continued)
Chapter Title
13 Negotiation Skills for Financial Professionals
14 Self-Management
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Introductions
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• BRAMMS• “Remember that a person’s name is to that
person the sweetest and most important sound in any language.” Dale Carnegie, How to Win Friends and Influence People
• Name - a way to remember• What do you do?
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How the Seminar Works
• From General to Specific• Technical and Managerial• Participative not Lecture
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The Old and the New
• Contract• Expect to be frustrated
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Exercise 2
• List Successful Organizations• List Unsuccessful Organizations• What is the difference
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Chapter 1
The New Style Organization
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Old Style Organization
• Organization Structure• Mostly Manufacturing• Immigrant Labor Force• Status is Key• Narrow Job Descriptions and Salary Ranges• Decisions Made at the Top• Obedience not Creativity
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Old Style Organization Title
• Rules and Regulations• Risk Aversion• Competition for Power• Formal Communications• Low Trust• Unhappy Employees
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New Style Organization
• Team Structure• Service Organization• Diversified Labor Force• Less Unionization• Less Status• Wide Job Descriptions and Salary Ranges• Team Decisions• Creativity Is Highly Valued
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New Style Organization (Continued)
• Principles not Rules• Risk Management• Everyone on the Same Page• High Trust• Happy Employees
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What Type ofOrganization Is Yours?
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Common Questions
• What Type of Organizations trend toward Old and New?
• Can we have a New Style department in an Old Style Organization?
• What if I don’t want to change?
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Chapter 2
Leadership vs. Management
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Profiles in Leadership
• Think of someone you consider to be a great leader• Can be living or dead, famous or a professional
acquaintance• What is it about them that makes them a great
leader?
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1. Model the Way
2. Inspire a Shared Vision
3. Challenge the Process
4. Enable Others to Act
5. Encourage the Heart
The 5 Practices of Exemplary Leadership
By: Jim Kouzes & Barry Posmer
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Key Concept
• To be Successful, any Organization only has to do Two Things.
• What are They?
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Serve the Customer Well
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Do It Efficiently
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Another Key Concept
• If you want an Exceptional Organization, you have to have Exceptional People.
• “No Bozos” Steve Jobs
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Management and Leadership• We Manage Things• We Lead People
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Old vs. New
• Old Style Organization – Management• New Style Organization – Leadership
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Management Style
• Managers – Autocratic• Leaders – Collaborative
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Team
• Managers have Subordinates• Leaders have Followers
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Direction
• Managing is Pushing• Leading is Pulling
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Control
• Managers Control• Leaders Trust
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Direction
• Managers Go with the Status Quo• Leaders Challenge the Status Quo
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Teams
• Managers Staff• Leaders Align
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Characteristics of Leaders
• Servant Attitude• Coaching Ability• Self-confidence• Creativity• Empathy• Vision• Inspiration
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Characteristics of Leaders (Continued)
• Long and Short-term Balance• Build Trust Through Consistency• Share Authority• Share Credit• Take the Blame
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• Jim Collins – Good to Great – Why do some companies make the leap and others don’t
• Level 5 Leaders – Windows and Mirrors
• The Bus• Confront the brutal facts• Hedgehog Concept• 3 Circles – culture of self discipline, technology as an accelerator and not as a change agent, the flywheel
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Chapter 3
Hiring the Right People
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Technical Skills
• Computer skills• Tax/financial knowledge• Accuracy• Numbers skills
Often Determined by• Experience• Education
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People Skills
• Self-less• Life-long Learner• Enthusiasm• Social Maturity• Team Player• Creative• Trustworthy
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People Skills (Continued)
• Innovative• Brave• Ethical
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Which Is Most Important?
• Old vs. New Style Organization?• What do you think?
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Which Is Easier to Train?
• Technical Skills• People Skills
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For Which Do We Hire?
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Why Do We Make the Mistake?
• Easier• Less Risk of Being Sued• Faster Process• Narrow Job Descriptions
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How to Hire for Both
• Determine the Technical Skills• Make the first cut on Technical Skills• Interview only based on People Skills• Make Final Decision on People Skills
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Who Makes the Decision?
• Management?• Team?• Both?• Why?
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• EntreLeadership by Dave Ramsey• Practical How to Business Guide• Most business problems are people
problems• Spend more time on Hiring• Developing KRA’s for every position• Creating a vision for your team• Passion beats almost anything –
especially talent• Treat other people the way you want
to be treated• Must listen to the podcast!
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Case Studies in Interviewing
• Why?• Who Writes?• Who Listens?• Written or Verbal?
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4 Big Buzzwords Today
• Persistence– Steve Jobs – “this is garbage”
• Execution– Deliver Results
• Creativity– Creative problem solver
• Resourcefulness– We aren’t going to throw more money at the
issue
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• David Letterman’s Top 10– http://www.youtube.com/watch?feature=endscree
n&NR=1&v=1Ihn-TIFPAM
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Chapter 4
Personality Types
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Social-Style Model
• Used with permission
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Steps to the Process
• Observe behavior• Predict SOCIAL STYLE• Predict behavior
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Assertiveness
• Mainly Speed• Fast Decisions• Fast Talking• Fast Walking
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Responsiveness
• Show/Control Emotion• People vs. Task• Closed vs. Open
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Describe the Styles
• Driving• Expressive• Analytic• Amiable
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Versatility
• The Ability to Adapt• The Key to Success
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Strengths and Weaknesses
• Driver• Expressive• Analytic• Amiable
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• Google’s CEO on Group Think:– http://www.youtube.com/watch?v=wPHL4paHv0o
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Chapter 5
Employee Motivation
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• Gung Ho! By Ken Blanchard & Sheldon Bowles
• Lesson of the Squirrel – worthwhile work
• Lesson of the Beaver – in control of achieving the goal
• Lesson of the Goose – cheering each other on
• Great read on creating culture
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The Old Way
• The carrot and the stick– Bribery and Fear
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Is Fair the Same as Equal?
• Old Way• New Way
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What’s the Way to Measure?
• Inputs• Outputs
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Commissions
• Sales• Gross Profit• Gross Profit – Past due• Gross Profit – Past due – T&E
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Profit-Sharing Systems
• Qualifying• Team Centered or Gain Share
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Autonomy as a Motivator
• Flexible Work Arrangements– Working from Home– Job Sharing– Flexible Hours– Contract Labor Arrangements– Tele-commuting
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What’s Needed for Autonomy?
• Metrics• Trust
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Mastery
• What is it?• How to Achieve it?
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Relevance
• What is it?• How to Achieve it?
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Managing the Millennial Generation
• Born in 1982 – 2004 • Largest generation• Inc Magazine’s 6 Keys
1. Over communicate all the time
2. Go heavy on the rewards and punishments
3. Set the Quality Bar High – especially writing skills
4. Keep accountability consistent and crystal clear
5. Be willing to meet halfway – display vulnerability
6. Help them focus on the big picture
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2 Great Reads for Millennials
• Jon Acuff – Start – Go from Average to Awesome– https://www.youtube.com/watch?
v=AYH4EVYmV3Y
• Christine Hassler – The Twenty Something Manifesto
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• The 5 Languages of Appreciation in the Workplace by Gary Chapman
1. Words of Affirmation2. Tangible Gifts3. Quality Time4. Acts of Service5. Physical Touch
• We all want to be appreciated in different ways
• Handwritten thank you notes• Restaurant gift cards• Email to the boss bragging on a team
member
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Chapter 6
Leading People in the Organization of the Future
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• Start with Why by Simon Sinek• People don’t buy what you do, they buy why you do it• MLK “I have a plan”• If you hire people just to do a job they will work for money• If you hire people who believe what you believe, they will work for
you with blood sweat and tears• Don’t sell the drill or the drill bit, sell the hole•
http://www.ted.com/talks/simon_sinek_how_great_leaders_inspire_action.html
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From HR to CLO
• New positions in the organization of the future– CLO– Coach
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Steps in Problem Solving
• Define the Problem• Determine Problem Ownership• Measure the Problem• Set the Goal• Determine Root Causes• Select the Best Strategy
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Steps in Problem Solving (Continued)
• Implement• Evaluate Results• Implement Changes• Continuous Improvement• Celebrate
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When Termination Is Needed
• Economic reasons– How not to do it
• Early retirement and buyouts
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Terminate for Cause
• The Employee’s Decision
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Balanced Scorecard
• Finance• Operational• Learning• Customer service
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Who Chooses Metrics
• Team • Individual
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Team Metrics
• Agree on Outcomes• Select Metrics• Dry Run• Collaborate on Success or Failure• Implement System
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Individual Metrics
• Agree on Outcomes• Select Metrics• Dry Run• Collaborate • Implement
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Happy Employees
• Why bother?– Customer Service– Efficiency
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How to Know
• Surveys– Benchmarking
• Over time• Different departments• Different companies
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What Causes Happiness?
• Money • Autonomy• Mastery• Relevance
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• The One Minute Manager by Ken Blanchard & Spencer Johnson
• Management and Leadership 101• Not just automatic – it is not just
the numbers• Not just democratic – it is not just
about the people• As leaders we are concerned with
both• One Minute Goals – clear
expectations• One Minute Praising – catch
people doing something right• One Minute Reprimands –
reprimand sandwich – no annual review surprises
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Chapter 7
Planning and Budgeting in the Organization of the Future
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What’s the Difference?
• Planning is Financial• Budgeting is Political
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Why Have a Budget?
• Old Style– Prevent overspending
• New Style– Part of the plan
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Vision
• Where do we want to end up?
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Mission
• How are we going to get there?
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Core Values
• To what do we hold dear?
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Core Values Example
Source – Florida State Employees Federal Credit Union
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VMV
• Keeps everyone on the same page• Prevents divided loyalties
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VMV for the Team
• For your department– Where do you want to be?– How are you going to get there?– What are the key values?
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Business Plan
• Find a Need• Put Together an Organization• Solve the Need • Economic Fashion
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Strategic Plan
• What is our Business?• Who are our Customers?• What will be our Business?• Who will be our Customers?
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Strategic Plan (Continued)
• What should be our Business?• Who should be our Customers?• How will those Customers Determine Value?
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Five-Year Plan
• Annual Plan• Monthly Plan• Cash Plan
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Planning and Budgeting
• The plan is not to– Motivate,– Control Expenses,– Increase Sales, or– Give Permission to Spend Money.
• Negative Behavior from each of these?
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Sales Forecasting
• Experts• Crowd Sourcing
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• When I grow up
http://www.youtube.com/watch?v=Asf3Q85MS1U
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Chapter 8
Risk Management
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• How the Mighty Fall by Jim Collins• Hubris and arrogance born of
success• Undisciplined pursuit of more• Denial of risk & peril• Grasping for salvation • Capitulation to irrelevance or death
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What Is ERM?
• From the Organizational Perspective• Different from being handled at the Department
Level
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Why Have ERM
• Reduce Earnings Volatility• Maximize Shareholder Value• Promote Job and Financial Security
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Limitations of ERM
• Given too much confidence
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Components of ERM
• Corporate Governance for Structures• Risk Strategy
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Identify Risks
• Who knows best?• External risks
– Natural Causes– Economic– Other?
• Internal– Processes
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Causes of Risks
• Values of Benchmarking– Economic
• What is Sustainable?
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Measure the Risk
• How big a Problem?
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Controls and Mitigations
• Insurance• Hedging• Other
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Contingency Planning
• Loss of Management• Natural Disaster• Fire• Loss of Life• Serious Accident• Hazardous Materials Spills• Terrorist Attack• Other
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Lessons Learned in ERM
• Know the Business• Checks and Balances• Keep your eye on the Cash• Use the right Yardstick• Pay for the Performance you want
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• Stephen Covey, 7 Habits
• Quit operating in Quad I
• Emotional bank account
• Deposits & Withdrawals
• Sharpen the saw
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Chapter 9
Customer Service and Efficiency in the
Accounting Department
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What Is Our Business?
• Provide Information• Maintain Controls
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Who Are Not Our Customers?
• Auditors• Regulators• State and Federal Tax Departments• They are Stakeholders not Customers
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Who Are The Customers?
• External• Internal
– Senior Management• How do we add value?
– Operating Departments• Marketing and Sales departments• Other Operating departments
• How do the Customers Determine Value?
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Value of Customer Analysis
• Average Ticket• Gross Profit• Number of Tickets per Year• Number of Years• Referrals
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Ways to Efficiency
• Which is better?– Have to– Want to
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Incentives for Non-Efficiency
• Salary Ranges and Levels• Budgets• Fear
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Continuous Improvement System
• Make a List• Measure• Discuss the Process• Consider Best Practices• Utility of present System• Automate the right Areas• Spreadsheet Audit• Measure Progress
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Case Study 9-1
• Learning Points?
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Body Language Test
• http://www.youtube.com/watch?v=gpiUohPPyks&feature=related
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Chapter 10
Benchmarking, Ratios, and Controls
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KPI
• What is your most important Competitive Advantage?
• How do you Measure it?
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Benchmarking
• Internal
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Benchmarking and Politics
• Inputs or Outputs?• Who Decides?
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Competitive Benchmarking
• Where to get Data?– Trade Groups– RMA
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Functional Benchmarking
• By Process• Best Practices
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Debt Ratios
• Debt/Net Worth• Debt/Total Assets
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Liquidity Ratios
• Current• Quick
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Profit Ratios
• ROI• ROA
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Gross Margin
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Debt Coverage
• Net income + non-cash/debt service requirement• Net income – interest + non-cash/ debt service-
interest
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Growth Ratios
• Trading ratio• Fixed assets/net worth• Why are these important?
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Balance Sheet Health
• A/R Turnover• Inventory Turnover
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Expense Control
• Non-interest Operating Expenses/Sales• Breakdown of different Expenses
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Fraud Discovery
• Ratio Analysis examples• Benchmarking
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Ratios and Sustainability
• Fringes/Salaries• Other?
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Chapter 11
Cash and Debt Management
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Value of Money
• Long Term• Short Term
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Speeding Receipts
• Lockbox• Pre-authorized debits• ACH debits• Website Payments
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Check 21
• History• Death of float
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Paying for Bank Services
• Soft Funds• Hard Funds• New Developments
– Regulation Q– Remote Item Capture– Treasury Management / ACH Services
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Top Strategies
• Minimize or Eliminate Fees• Focus on Demand Planning• Expand Payment Cycles• Improve Bank Relationships• Streamline Processes• ACH Transactions and Auto Payment• Look at Credit Terms• Check Short-term Investment Strategy
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New Trends
• Industrial Strength Connectivity• Banking Web Services• Reports out, Actionable Analytics in• Banks implementing Digital Signatures
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Current Credit Markets
• Tight Lending• Rates Trending Up
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Negotiating
• Character• Cash Flow• Capital• Collateral
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Loan Price
• Fees• Rates• Balances
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Where:
Y = Yield to the bank
A = Amount
R = Rate
F = Fee
B = Balances kept in bank
U = Usage of the line of credit
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30 second commercial on communication: http://www.youtube.com/watch?v=nhe0KSGoUgc
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Chapter 12
Welcome to the Cloud
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Different Clouds
• Public• Community• Hybrid• Private
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Advantages
• Cost• Access• Upgrades• Innovation • Ease of use• Ease of reports
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Disadvantages
• Security• Privacy• Customization• Compliance
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How to Plan
• Talk with IT– Why might they be negative?
• Talk with Operating Departments
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Chapter 13
Negotiation Skills for Financial Professionals
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• Hard Line Negotiator• http://www.youtube.com/watch?v=2qsa66AqXTo
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Two Ways
• Power Negotiation• Common-goal negotiation
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Tricks of Power
• Good-cop, Bad-cop• Deception• New Lowest Offer • Another Decision Maker
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Steps of Common-Goal Negotiation
• #1 Research– Needs– Wants – Worst-case
• #2 Where to negotiate & what tools are needed
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Presenting the Problem
• #3 Problem Ownership– I’ve got a problem– We’ve got a problem– You’ve got a problem
• Which is better and why?
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#4 Explore Goals
• Yours• Other Party’s• Look for common goals
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#5 Brainstorm Solutions
• Don’t Judge• Make sure to have some easy toss-outs• Be ready to negotiate from this list
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#6 Cross Off
• That’s why we need some easy ones to eliminate• Take turns
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#7 Narrow to a Few Choices
• This is where the real negotiation happens
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#8 Agree on Solutions
• Final part of the real negotiation
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Final Steps
• #9 Agree on Accountability• #10 Follow-up
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• Ramit Sethi on salary negotiation:• http://privatelist.findyourdreamjob.com/how-to-get-a
-raise-including-the-exact-words-to-use/
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Chapter 14
Self-Management
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• Take the Stairs by Rory Vaden• Success is a choice that is as simple as
deciding to take the stairs• Paradox Principle of Sacrifice – Short Term vs
Long Term• Creation Principle of Integrity – You think it, you
speak it, you act it, it happens• Rent Concept – “Success is not owned, it is
rented, and the rent is due everyday.”
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Your Choices
• Change You• Change the Company• Leave for another Organization• Make no Changes
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Your Goals
• Become more Valuable• Read• Become more creative• Work on the business, not in the Business• Be an Innovator• Delegate more
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Getting Things Done
• David Allen• Capture• Clarify• Organize
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20 Things the Rich Do Every Day by Thomas Corley1. 70% of wealthy eat less than 300 junk food calories per
day. 97% of poor people eat more than 300 junk food calories per day. 23% of wealthy gamble. 52% of poor people gamble.
2. 80% of wealthy are focused on accomplishing some single goal. Only 12% of the poor do this.
3. 76% of wealthy exercise aerobically 4 days a week. 23% of poor do this.
4. 63% of wealthy listen to audio books during commute to work vs. 5% for poor people.
5. 81% of wealthy maintain a to-do list vs. 19% for poor.6. 63% of wealthy parents make their children read 2 or
more non-fiction books a month vs. 3% for poor.7. 70% of wealthy parents make their children volunteer 10
hours or more a month vs. 3% for poor.8. 80% of wealthy make happy birthday calls vs. 11% of poor9. 67% of wealthy write down their goals vs. 17% for poor10. 88% of wealthy read 30 minutes or more each day for
education or career reasons vs 2% for poor.
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20 Things the Rich Do Every Day (ctd)11. 6% of wealthy say what’s on their mind vs. 69% for poor.12. 79% of wealthy network 5 hours or more each month vs.
16% for poor.13. 67% of wealthy watch 1 hour or less of TV. every day vs.
23% for poor14. 6% of wealthy watch reality TV vs. 78% for poor.15. 44% of wealthy wake up 3 hours before work starts vs.3%
for poor.16. 74% of wealthy teach good daily success habits to their
children vs. 1% for poor.17. 84% of wealthy believe good habits create opportunity
luck vs. 4% for poor.18. 76% of wealthy believe bad habits create detrimental luck
vs. 9% for poor.19. 86% of wealthy believe in life-long educational self-
improvement vs. 5% for poor.20. 86% of wealthy love to read vs. 26% for poor.
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3 Key “Take-
Aways”
Thank you for being here!Questions?
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The New Controllership: Keys to Boosting
Corporate Performance
Thank you for attending!