Building a Future Ready Orggganization Starting Todayleanaccountingsummit.com/wp-content/uploads/2014/10/Player.pdfBusiness consulting firm, and founder of ABM SMART. • He is the

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Building a Future Ready Organization Starting g gToday

Steve Player Steve Player

October 21, 2014

About the Speaker

• Steve Player serves as the North America Program Director for

Steve PlayerDirector, BBRT North AmericaManaging Director, The Player Group

• Steve Player serves as the North America Program Director for the Beyond Budgeting Round Table (BBRT) and works with BBRT member companies to implement continuous planning processes.

• He has over 30 years experience with improving performance management and implementing strategic planning processes. He is also the Managing Director of Beyond EPS Advisors, a Business consulting firm, and founder of ABM SMART.

• He is the co-author of Future Ready: How to Master Business Forecasting and Beyond Performance Management as well as five other books. Steve also interviews CFOs from leading organizations on innovative finance and planning processes. These are published on the CFOThoughtLeaders.com web site.

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Is your organization Future Ready?

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Session Agenda

• What role does your Finance organization play?

• Why do you have to “stop doing dumb stuff” Why do you have to stop doing dumb stuff before you really begin?• What should you stop now?

• What is holding you back?

• Six key lean activities to create an agile enterprise

• Getting started

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Changing your business to manage in a volatile world

or

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Clean sheet? Cumulative Cost Structure Profile?

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What ship do pwe need?

- What projects and initiatives are needed to transform?

How do we continue performing- How do we continue performing while we change?

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What’s the objective?

“Get there as quickly as possible” q y p

If the wind blows hard, If the wind doesn’t blow at all,

Sail fast

Break out the oars

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Session Agenda





• Getting started

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1. Monthly closing

2 Standard cost accounting2. Standard cost accounting

3. Monthly financial variances

4. Forecasts just to year end

5. Confusing targets and forecasts

6. Tying bonuses to reaching budget targets

7. Reporting solely by columns of numbers

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E

Mistake #4–Forecasting to the wall

Actual FcstActual Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst

Actual Actual Fcst Fcst Fcst Fcst Fcst Fcst FcstActual Actual Actual

End

of

Ye

Actual Actual Fcst Fcst FcstActual Actual Actual Actual Actual Actual Actual ar

The Player Group 2014 10

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Year x Year x+1

Migrate from annual budgets to 5-quarter rolling forecasts

1st Review

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

2nd Review

3rd Review

4th Review

ActualsAnnual Plan

x+1Forecast

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A2 – Incentives are tied to reaching negotiated budget targets

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Session Agenda





• Getting started

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BBRT Principle #9 - Planning

Make planning a continuous and inclusive process, not a top‐down annual event

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TargetsAligned

AnnualPlan

Enablers:

Timely Allocation of Resources

American Express:Transform to Continuous Planning

Integrated Decision Support

Processes

MonthlyResultsReview

MonthlyRisk/Opportunity

FlexibilityAssessment

BusinessStrategy Validation

LongRangePlan

Enablers:

• Finance/BusinessCollaboration

• Robust Tools/Technology

• Information

• External Visibility

• Application of

Resources

Focus on Future

Performance of Company

ShareholderValue

Optimization

OngoingInvestmentOptimizationDecisioning

QuarterlyForecasts

Six Sigma Principles Visibility to

improve/ adjust

strategy formulation

and executionCase Example A: Continuous Planning at American Express

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American Express

S i Pl G lf W (J 2003) Ri k d O t it A t

Frequent scenario planning allows finance to forecast the potential impact of a range of uncontrollable events to the annual plan…

…and to create management “playbooks” to mitigate risks and take advantage of emerging opportunities

Scenario Plan: Gulf War (Jan 2003)

$MM

Business Unit:__________

Pretax

Income $ Q2 Q3 Q4 l

Risks

•Lower Business Travel

•Weakness in Equity Mkts

•Competitor New Prod Launch

•Additional Technology Development

Opportunities:

•Early end to SARS epidemic

Risk an d Opportunity Assessment

Planning TransformationEPS Impacts of Gulf War EPS Impacts of Mg Actions

•Further economic recovery

•Improved credit quality

•Additional marketing opportunities

Scenario Planning – American Express

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Park Nicollet Health Services

“ Planning and control are still important, but the focus of planning becomes one of mid-term and long-range forecasting and control is accomplished by focusing on continual improvement.”p y g p

- David Cooke, CFO, Park Nicollet -

FOCUSFrom

L ki B k

To• Getting Better

L ki Ah d

• Numbers

• Looking Back • Looking Ahead

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Park Nicollet Health Systems

Lean Planning

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Session Agenda





• Getting started

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1. Join a community of practice to learn from others

2. Determine which approach is most appropriate –Evolutionary or Revolutionary

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3. Start by assessing your “as is” processes

4. Compare current processes to best practice principles

5 Develop a prioritize development road map5. Develop a prioritize development road map

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Transform finance into a “danger control center”

Think like the mayor of a city about to be hit by a major storm

Presentation by Mary Driscoll & Steve Player

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To Learn More

• Read Future Ready: How to Master Business Forecasting (Wiley 2010)

• Join the Beyond Budgeting Round Table www bbrtna orgwww.bbrtna.org

• Attend the BBRT Fall member meeting in San Antonio on Nov. 17-18, 2014

– E-mail [email protected] for details

For additional follow-up:

S PlSteve Player214.239.0155

[email protected]

www.bbrtna.orgwww.theplayergroup.com

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Steve Player214.239.0155steve@theplayergroup.comwww.bbrtna.orgwww.theplayergroup.com

Documents

Building a Future Ready Orggganization Starting Todayleanaccountingsummit.com/wp-content/uploads/2014/10/Player.pdfBusiness consulting firm, and founder of ABM SMART. • He is the