cfo guide to strategy execution

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CFO Guide to Strategy Execution

Shortly after college I found myself in a rapidly growing service organization on

the fast track to management. Being in the professional world was a phenomenal

new experience, so I was eager to soak up as much knowledge and experience as I

possibly could. After a year or so, I had all the confidence in the world and felt

like a business pro ready to take on the corporate world. One day, a former

business professor called and asked me if I would be willing to put together an

alumni group to compete against his students in the college’s business capstone

course. Each semester, groups of students compete against each other in a

business simulation where they ‘run' an airline. Every week, the students make

decisions about strategy, marketing, sales, finance, IT, etc. The group decisions

are input and a stock price is derived based on their airline's position in the

industry, which is made up of the other groups’ airlines. This was the first

semester that the professor decided to add an alumni group to up the ante and

increase competition for the student groups. The airline with the highest stock

price at the end of the semester wins. And, a stock price over $20 earns the group

a spot on the famous “Wall of Fame” that is proudly displayed at the entrance

to the Business Hall.

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got right to work to find the best team. I was very serious about my responsibility

to show the 'young and inexperienced' students how to run a business….after all, I

had one whole year of real life experience under my belt. I got busy recruiting the

best and the brightest among my co-workers. I was even able to recruit

several members of management to join the team. I believed that we had a

dream team full of experts in the critical functional areas. We were motivated to

win and ready to get to work. Surely, we would be able to earn our place on the

Wall of Fame.

A few weeks later, something really huge happened at the service organization.

Our CEO called an unexpected meeting and announced that we were being

acquired by a large public company. Our new parent company had big plans for

our service organization, and we were all about to get very busy. We had already

made a commitment to the college so, in spit of our time constraints, over next

couple of weeks our alumni group spent some time together over a few lunches to

discuss the project. Our vision was that our airline would have the highest stock

price at the end of the semester. Beyond that, we didn’t really discuss how we

were going to do it. As things got busier for each of us, we ended up working

individually on the project making the decisions in our functional areas that each

of us thought would result in the highest stock price. As it turns out, the decisions

that we were making individually were working against each other. One of us

started entering markets that catered to leisure travelers, while another launched

an initiative that catered to to business travelers. Someone invested in

purchasing more luxurious airplanes, while someone else slashed fares to attract

the more price-conscious passengers. Our disjointed methodology caught up

with us quickly, and at the end of the semester our stock price was exactly $0.81,

earning us the distinction of having the worst ending stock price of any group,

EVER.

Almost 20 years later, I have learned more than I ever imagined I could from my

experiences in the business world, and I’m certain that I have volumes yet to

learn. I have worked with and studied companies who were able to articulate

their vision, create a strategy, and execute the plan to achieve the vision and

beyond. I have worked with others who fell flat, and yet others who never even

got close to their goals. Thinking back, even to this day I can draw parallels to the

real world and pull valuable lessons from my brief stint as team leader of the

alumni airline simulation group.

A company’s vision lays out what it would like to achieve. Vision statements

should be aspirational and reflect the company’s values and culture. But you

can’t stop there. You must also create a strategy that tells everyone how the



(Walmart), those with service as their differentiator (Zappos), and others who

value luxury (Jaguar). It is important to spend the time to figure out how the

company will differentiate itself in the marketplace. This decision will chart the

path for what strategic goals the company will set. In our airline simulation, we

could have succeeded as a leisure airline, and we could have also succeeded

catering to business travelers. What didn’t work was NOT making that decision

up front. In the absence of a strategy to guide our path to success, team members

were making decisions that, in the end, undermined the well-intentioned

decisions of the other team members.

All companies need both strategic goals and financial goals. There is no doubt

that financial goals are important. Making money is what allows a company to

continue to operate and grow. Depending on where the company is in its life

cycle, it may need to generate cash to reinvest in the company, to pay off debt, to

launch a new product, to satisfy investors, etc. However, if the vision is solely tied

to financial goals, when resources inevitably become strained, focusing on the

financial goals can inadvertently cause leaders to make decisions that sacrifice the

long term success of the company for the sake of achieving shorter term financial

goals. Our airline simulation stock price wasn’t a straight nose dive. Though our

trend line went south, we did have temporary spikes along the way. There were

weeks when the price would start to slip, and because we defined our vision in

terms of financial results, we made those decisions that would trigger an

immediate increase in the stock price. Ultimately, however, the upturns in price

were all short term and didn’t result in sustainable success.

All companies face circumstances that are outside of their control. There are

possibilities of regulatory changes, changes in consumer behavior, new

competition, and emerging technologies, just to name a few. That doesn’t mean

that companies can just bury their head in the sand and ignore the possibility of

the unexpected. Risks require responses, and responses require decisions to be

made. Most of us, from the front line to the C-suite, are knowledge workers,

those who “think for a living”. There was a time when most workers weren’t

required to make decisions about the work that they were doing. Today, however,

many of the repetitive tasks that didn’t require, and actually discouraged,

independent judgement have been replaced by automation. In 1957, Peter

Drucker predicted that the most valuable asset of the 21st century institution

would be knowledge workers and their productivity. Today, we expect employees

to make the best decisions to move the company in the right direction. Arming

employees and leaders with a strategic plan that provides a framework in which

to make the right decisions is the best tool to have available when the unexpected

becomes a reality. I have no doubt that our airline simulation would have ended



have occurred at all. But, that was out of our control. It also could have turned

out very differently if we had a strategy map in place that facilitated more

systematic and timely decision-making, thus mitigating the impact of the event.

Our airline simulation team was ambitious, motivated and capable. Yet, all the

drive and ability in the world won’t lead to sustainable success without a clear

vision and business strategy that is continuously communicated across the

organization. In other words, everyone needs to know:

There are different ways to create and manage a company’s strategy. One way is

to implement a Balanced Scorecard strategic planning and management system.

The Balanced Scorecard was created by Drs. Robert Kaplan and David Norton in

the 1990’s, though its roots go back many years. It began as a way to have a more

balanced view of organization performance, by looking at both non-financial and

financial measures. The concept eventually grew into a much larger strategic

planning and management system that views success from multiple perspectives

across the organization. The Balanced Scorecard provides much more than just a

method for documenting the strategy, it provides a framework for executing it.

Vision

A strategy starts with a vision. A vision statements is inspirational, memorable,

concise, clear, and easy to communicate. It should paint a picture of the future

the company wants to create. A vision statement should also incorporate the

company’s values and be ambitious, yet attainable. One way to get started

creating a vision statement is to create a vision board. This exercise incorporates

brainstorming, but with visuals, to get the creative juices flowing. Ask questions

like:

Get input from customers and employees. Then, seek feedback from family,

friends, and anyone else who will listen and provide genuine feedback. In the



and stakeholders.

Here are some real-life examples of great vision statements:

In our airline simulation, had we created a vision statement, it may have read

something like this:

Zappos.com



Objectives

In a Balanced Scorecard, objectives are key areas in which the company must

focus in order to get where it wants to go. The company can take a look at where

it is now, and where it wants to go and identify those areas in which it must focus

to get from here to there. Identifying objectives requires that leaders take a hard

look at the organization and identify strengths that it can capitalize on as well as

weaknesses that must be overcome. A good place to start is with a SWOT

analysis. Objectives should be grouped into various perspectives, and objectives

should be aligned with the other perspectives. Typically, the perspectives are:

Employee Perspective

Starting with the foundation, the employee perspective, ask yourself “How will

we continue to learn and grow?” For example, we could have named the

following employee perspective objectives in our airline simulation:

Internal Process Perspective

From the employee perspective, we move up to the internal process perspective.

Here, ask yourself “At which processes must we excel in order to succeed?”.

Think of the activities and processes from end to end. Examples of objectives in

the internal process perspective are:



Customer Perspective

For this perspective, ask the question “What does our success look like from our

customer’s perspective.” Perhaps, the answer to that is that the customers are

consistently able to use travel time to increase productivity or that the customer

perceives the value as greater than the price. From those answers, you can pull

the following objectives:

Financial Perspective

Finally, when you reach the financial perspective, ask "What does financial

success look like to our shareholders?”. Depending on where the business is in its

lifecycle, financial goals may be different. For example, companies in a startup or

heavy growth phase usually need funds to reinvest, so the financial goals may be



may be more concerned with return for investors. Financial objectives might

include:

The visual representation of the objectives grouped by perspective is a strategy

map. Collectively, the objectives tell the story of the company’s strategy and let

everyone know how the company plans to achieve the vision. In general,

improving objectives in the employee perspective enables improvement in

objectives in the internal process perspective, which then leads to better

performance in the customer and financial perspective objectives.



Measures

Measures are key performance indicators that tell the company whether the

objectives are moving in the right direction. Measures can be leading indicators

or lagging indicators. Lagging indicators are the KPIs that follow an event and

report on a past event. For example, net income is a lagging indicator that

reports financial results for a prior period. Leading indicators, on the other hand,

are KPIs that predict future events. These are measures like employee

engagement. Higher levels of employee engagement drive improvements in

operational results across the rest of the organization. Measures in the financial

perspective will most likely be entirely lagging indicators. As you move down

through the scorecard to the employee perspective, the measures will consist

primarily of leading indicators.



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Initiatives

Finally, initiatives are the projects or activities that are implemented to move the

objectives forward. It is with this step that strategy is truly translated to action.

Giving people projects or tasks that are associated with objectives that directly

lead to the vision allows people to see how their efforts contribute to the

company’s success in achieving it’s vision.

_______________________________________________________

It has been said that a failure is a success if you learn from it. I have definitely

learned from my airline simulation experience and many, many others along the

way. One such lesson is that a team of engaged employees is a critical success

factor that can drive sustainable success, but they must have a framework in

which to make decisions. The Balanced Scorecard strategic planning and

management system is one way in which companies can communicate the vision

and story of the strategy in the form on a strategy map. A Balanced Scorecard can

take many months to implement and requires commitment from those at the top.

Leaders should have an open mind and be ready to embark on an exercise of

organizational self-discovery. Once successfully implemented, however, the

Balanced Scorecard can serve as a much needed pathway to success in achieving

the company's vision.

Jennifer Eversole, CPA is a Knowledge

Enthusiast and Co-Founder of

Management Stack.

"Knowledge inspires ideas. Ideas inspire innovation. Innovation inspires

achievement. Achievement inspires happiness." - Jennifer Eversole, CPA

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Why I Left Management Consulting to Start a

Philosophy Company

When I was in graduate school studying philosophy, our university bookstore

moved locations. Amidst the chaos of the move, the store set up makeshift

sections and stacked books like Jenga pieces between partially constructed

wooden shelves. After carefully navigating toward the philosophy section (usually

easy to identify due to the absence of living souls), I was immediately presented

with one of the most profound sentences I had ever read. Undoubtedly penned by

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Mark RutledgeMark Rutledge

Well Well

done Jennifer, great read!done Jennifer, great read!

LikeLike ReplyReply(1)(1) 3 days ago3 days ago

Jennifer EversoleJennifer Eversole

Thanks, Mark. I'm glad you enjoyed it!Thanks, Mark. I'm glad you enjoyed it!

LikeLike 3 days ago3 days ago

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and Philosophy begins.

I immediately snapped a picture of the sign that has remained as my phone’s

wallpaper, even several years later when working as a management consultant.

One day at work, the phrase got me thinking about the nature of consulting. We

use mathematics to help businesses address complex problems. Businesses

struggle each day with tremendous uncertainty as they are routinely confronted

with the unknown. They call upon hard calculations to predict end results.

History has shown, however, that mathematics alone cannot predict the success

or failure of companies.

When studying for consulting case interviews, one inevitably reads about AT&T’s

cell phone mishap, and the details came rushing back to me. In the early 1980s,

AT&T turned to management consultants to decide whether or not they should

enter into the cell phone market. Using mathematical forecasts, the consultants

anticipated cell phones being a niche market and not one AT&T should waste its

time with. Like the Digital Equipment Corporation (DEC) of the 1960s, who

wrongly predicted that there would never be a demand for personal computers,

AT&T miscalculated one of the most important technological and commercial

innovations of our time. This was due to their exclusive reliance on mathematics.

Mathematics tells us how to build a phone but it struggles to tell us what a phone

is and why somebody would pay money for it. In other words, mathematics ends.

I then began to explore alternative approaches to solving complex business

challenges and reached the same conclusion as the book store clerk: when

mathematics ends, philosophy begins. There are a host of organizations that

assist businesses in their answering of questions that begin with how, and I was

part of one. But I struggled to find an organization that helps companies engage

with equally important questions that extend beyond logistics. Given the rapid

increase of globalization and the exponentially faster development of technology,

businesses will need both mathematics and philosophy to adapt and thrive in the

21st century. Had any manager at AT&T read the DEC case study coupled with

the works of Jules Verne, for example, perhaps AT&T would have anticipated our

collective fascination with futuristic technology.

So, armed with this knowledge, I left management consulting and partnered with

Dr. David Brendel, a pioneer in the neurohumanities space. Together, we formed

a company that uses the humanities and cognitive science to help organizations

operate more effectively. We use philosophical training to build high-performing

cultures and, with the help of Dr. Paul Zak, we use mathematics to measure the

very real effects of our training. Our recipe for creating and sustaining such high-

performing cultures is the collective enhancement of skills embodied within

Theory of Mind.



in the minds of other people; its synonyms being empathy and emotional

intelligence. Possessing advanced Theory of Mind skills means being able to

conceptualize what others think and feel; to form hypotheses about why others

act as they do; and to appreciate complex emotional and behavioral dynamics in

groups. It often leads to increased levels of strategic thinking, collaboration,

leadership, and trust within organizations. Businesses are starting to recognize

the incredible importance of Theory of Mind in professional settings; so much so,

global executives recently agreed these skills are the most critical for professional

success.

Recent research also suggests that the most effective way to develop and further

enhance one’s Theory of Mind is to read and discuss great humanities texts.

(Now, thanks to the people who didn’t study philosophy, the neuroscientists, I

can finally explain to my parents why I did). The humanities - of which

philosophy is a part, along with literature, history, art, and music - are broadly

characterized as the study of human experience and culture. Effectively, they

serve as case studies, much like the cases I pored over when interviewing to

become a management consultant. However, instead of evaluating the

mathematics of AT&T’s cell phone miscalculation, the humanities delve a bit

deeper, ultimately developing superior interpersonal and analytic skills within the

reader, far more so than the calculative case studies of business school. The

humanities help us see the bigger - and often more complex - picture. As written

in the Harvard Business Review: “[Business] knowledge can be acquired in two

weeks...People trained in the humanities... have learned to play with big concepts,

and to apply new ways of thinking to difficult problems that can’t be analyzed in

conventional ways.”

As more and more businesses start recognizing the prosperity enjoyed by

companies that leverage both mathematics and philosophy, they will see that

possessing the ability to understand what is going on in the minds of other people

uniquely positions them for future success. Professionals will now be able to

augment mathematical calculation with the cognitive calculations found within

the likes of Plato, Shakespeare, Austen, Verne, and Sun Tzu. Some leaders are

ahead of the curve. Jack Bogle, founder of Vanguard, often relied upon poetry for

guidance when building his company. He told me during a recent phone call that

Shelley’s Ozymandias remains on his desk to this day.

And that is why I left management consulting to start a philosophy company: to

help those who have not yet leveraged the power of the humanities to secure the

continued success of their organization in our globalized, highly technical

economy.



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Dorothy Moyta, AIA, NCARB, Financial BrandingDorothy Moyta, AIA, NCARB, Financial Branding

"Theory of Mind is broadly "Theory of Mind is broadly

defined as the capacity to understand what is going on in the minds of other defined as the capacity to understand what is going on in the minds of other

people; its synonyms being empathy and emotional intelligence. Possessing people; its synonyms being empathy and emotional intelligence. Possessing

advanced Theory of Mind skills means being able to conceptualize what advanced Theory of Mind skills means being able to conceptualize what

others others

think and feel; to form hypotheses about why others act as they do; and to think and feel; to form hypotheses about why others act as they do; and to

appreciate complex emotional and behavioral dynamics in groups." appreciate complex emotional and behavioral dynamics in groups."

Absolutely Absolutely

essential to success in any business or personal relationship, but often essential to success in any business or personal relationship, but often

terribly lacking in today's selfish and hurried world. We need to get this terribly lacking in today's selfish and hurried world. We need to get this

back to create a better society going forward.back to create a better society going forward.

LikeLike(5)(5) ReplyReply(3)(3) 1 day ago1 day ago

Gitanjali RanawatGitanjali Ranawat, , Kirk RhoadsKirk Rhoads, , Thembinkosi Mkhize MBLThembinkosi Mkhize MBL, +2, +2

Kevin KemperKevin Kemper

emotional intelligence; cute name. MOST of emotional intelligence; cute name. MOST of

us by desire, keep emotion out of our thinking. IF we incluidedit, us by desire, keep emotion out of our thinking. IF we incluidedit,

we we

would think about Poor Suzy and change an entire company would think about Poor Suzy and change an entire company

because of it because of it

instead of examining the results of the entire processes used.instead of examining the results of the entire processes used.

LikeLike(1)(1) 1 hour ago1 hour ago

Kirk RhoadsKirk Rhoads

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Effective Leaders Know the Science Behind Their

Behavior

Lynn had dreaded this meeting with her team. Frowning, she looked around the

conference table and said, “I’ve got bad news. Upper management told me this

team’s performance is unacceptable. We have to pull up our numbers by the end

of this quarter, or heads will roll. I’ve decided to make major changes. First, all

vacations for the rest of the quarter are cancelled. I expect each of you to be here

focused on work. Second, you will meet your weekly goals, no matter how many

hours it takes.”

Whatever you think of the content of Lynn’s message to her team, it’s clear that

how she delivered it made a bad situation worse. Missing from Lynn’s delivery

were use of the self-awareness, self-management, and empathy that are key to

emotional intelligence. During the Brainpower webcasts, my colleague Daniel

Siegel and I shared with viewers many of the research studies we’ve used as the

basis of our work with emotional intelligence and Mindsight.

If Lynn had understood and taken to heart some of that science, she could have

handled the meeting more skillfully.

If I were Lynn’s coach, here are a few studies I would have shared with

her for how she could apply their findings.

When Lynn walked into her meeting upset, she was participating in something

called emotional contagion. Whenever people interact, our brains and bodies

react to the feelings of those around us. Marco Iacoboni is a colleague of Dr.

Siegel’s at the University of California, Los Angeles who studies neural circuitry

like the mirror neuron system that operates in emotional contagion. Those

systems work automatically, instantly, unconsciously, and out of our intentional

control.

Andrew Meltzoff at the Institute for Learning & Brain Sciences at University of

Washington also studies how people are hardwired to pick up signals from

someone else.

When it comes to spreading emotions, some people have more influence in

passing along their feelings. When there are power differences between people,

the person with the most influence is the “sender” of feelings. Lynn didn’t realize

she was spreading her bad mood.

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Working with a coach and using 360-degree feedback tools such as the Emotional

Social Competency Inventory are superb ways to develop self-awareness.

Developing a mindfulness practice also can help you learn to be aware of your

emotions. Dr. Siegel’s Wheel of Awareness tool is a practical exercise that can

strengthen self-awareness.

Sigal Barsade, a researcher at the Wharton School of the University of

Pennsylvania, specializes in studying emotional contagion and its impact in

organizations. She suggests ways leaders can manage their emotions and create a

positive emotional culture in their teams. First on her list is to be aware of your

own mood and to change it if it isn’t useful. One way to do that is to change your

facial expression. Dr. Barsade understands the facial feedback hypothesis, which

states that our facial expressions impact our emotions. Intentionally smiling leads

to feeling positive emotions.

Before leading anyone else, a leader first must manage themselves. Lynn’s lack of

self-management started with entering the room in a bad mood and escalated

when she blew up at her staff. Lynn’s outburst was a classic “amygdala hijack.”

The amygdala is an area in the emotional centers of the middle brain. I’ve learned

about the amygdala from the research of Joseph Ledux and his colleagues at New

York University.

In my book, The Brain and Emotional Intelligence: New Insights, I said,

For Lynn to control her ‘bad boss’ amygdala, she needs to build her emotional

self-management skills. And, her outburst set off a collective amygdala hijack

among her team. John Gottman is a psychologist who has done extensive



step away from the situation. That’s the time it takes for your body to process the

adrenal surge caused by the amygdala. In a setting like this team meeting, even a

5- or 10-minute break to take some deep breaths and get out of the room would

help.

Also missing from Lynn’s handling of the “bad news” was any empathy for the

members of her team. By operating without empathy, she was unable to identify

with or vicariously experience what her staff members were thinking of feeling.

Jean Decety at the University of Chicago refers to three kinds of empathy.

Empathy is crucial to all forms of relationships, especially in the workplace.

Effective leaders need to exercise all three forms of empathy on a daily basis.

Tania Singer at the Max Planck Institute in Germany studies empathy and

compassion. Singer has found that something called the insula is key to emotional

empathy. The insula, a neural area important for emotional intelligence, senses

signals from our whole body. When we empathize with someone, our neurons

actually mimic within us that persons’ state. Singer and her colleagues have found

that empathy can be learned. They have developed training programs that are

available as a free downloadable ebook.

Brainpower: Mindsight and Emotional Intelligence in Leadership is

a collection of four streaming videos with Daniel Goleman and Daniel

Siegel.



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This series provides leaders,

consultants, and HR professionals with a science basis for their

leadership development work.

The Competency Builder

The Coaching Program

The C-Suite Toolkit

The L&D Primer

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cfo guide to strategy execution

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