Why isn't the controller having more impact?
Why don't corporations catch more bad decisions in the planning stage and correct them before they grow into costly mistakes? Sometimes, bad decisions slip by because the person with the right skills isn't on the management planning team. And often the person with the right skills is the controller. Yet, in many companies, the controller is left out of the planning process or is brought in after the key decisions already have been made.
The same skills that enable controllers to lay out financial plans and institute controls can become the tools to predict the future consequences of corporate decisions. With these tools, controllers can show management why a seemingly attractive acquisition is likely to prove indigestible or why a seemingly lucrative contract is likely to create an accounting nightmare.
Because of their ability to help management make sound strategic and tactical decisions, an increasing number of controllers are taking their place at the planning table as business partners. A recent study by Gunn Partners finds that by the year 2002, controllers expect to be spending about 30% more time on business partnership than they are now and about 20% less time on traditional controller functions.
CHANGES WILL BE SLOW
Our Gunn Partners study sees the likelihood of a much slower and more difficult transition to business partner than most controllers anticipate. The study cites a number of obstacles.
* Corporate controllers are failing to prove to top management and operating managers that they belong at the planning table.
* There are no traditional paths or training programs for becoming a business partner, and too few controllers are taking the initiative to use available resources, such as peers who have made the transition.
* Most controllers still are placing primary emphasis on fulfilling their traditional functions, leaving little time for the kinds of strategic initiatives that would encourage management to accept them as business partners.
* Many controllers aren't ready to make the changes required to become business partners. For instance, our study finds that most controllers hope to reduce the amount of time they spend managing people over the next few years. Yet, controllers who have succeeded in becoming business partners stress the need to devote much more time to people issues.
While the overall indication is that the road to business partnership may be much rockier than most controllers realize, we did find that one group of controllers is already well along in the transition. These are the controllers who report to the head of a business unit as opposed to those who report to the CFO or a corporate controller. Controllers who report to the head of a business unit said that activities related to business partnership comprise more than 50% of their most significant activities - as opposed to just 25% for controllers reporting to the CFO and 27% for those reporting to the corporate controller.
The study clearly shows that at this time the actions of most controllers aren't aligned with their goal of becoming business partners. Controllers are still focused on managing the finance function and aren't doing as much as they could to help the business compete in the marketplace. There's a gap between their goal and the actions they're taking to get there.
SHORTEN THE PATH
As controllers, what actions can you take? Here are a few:
* Learn the competencies you need to become a business partner and discover where you can get them. If there are no traditional programs, find other routes such as learning from peers who have made the transition.
* Improve the efficiency of your traditional controller functions so they take less time and leave you more time for business partnering.
* Work at proving to management that the role of the modern controller is shifting toward business partner and that it makes sense to place less emphasis on controllership and more on partnership.
* Recognize that to become a successful business partner you must spend more time, not less, guiding and coaching people. Then figure out what you have to do to reshape this human element - and get started.
Until the goal of becoming a business partner becomes more than wishful thinking, corporations won't realize the full benefits of the controller's valuable capabilities and perspective, shareholders will gain less value from their investment, and controllers will become increasingly frustrated and discouraged. It's in everyone's interest for controllers to make this transition. Management should encourage it the controllers should fight to make it happen.
The traditional controller reports to the CFO and is responsible for the financial management, financial systems, and reporting functions. These include:
* Regular monthly financial management and statutory reporting;
* The budgeting process, associated reporting, and analysis;
* Accountability for the financial control environment and taxation compliance; and
* Core finance transactional activity - payables, fixed assets, general accounting, and so on.
Jon Scheumann is a partner at Gunn Partners, Inc. He can be reached at email@example.com and (617) 624-0500. Gunn Partners, Inc., is an international management consulting firm best known for its expertise in helping companies improve the value and quality of their finance, human resource, and other administrative functions.
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|Title Annotation:||controllers as planning partners; includes related article on the responsibilities of a controller|
|Article Type:||Cover Story|
|Date:||Apr 1, 1999|
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