Wealth Management

Voted #6 on Top 100 Family Business influencer on Wealth, Legacy, Finance and Investments: Jacoline Loewen My Amazon Authors' page Twitter:@ jacolineloewen Linkedin: Jacoline Loewen Profile

December 31, 2012

Risk of Social Media exposing your company's secrets


Crosbie tries to give its expertise and knowledge about its client cases through their social media. Due to Risk and strict OSC compliance, the partners are always vigilant about what is being said across our Crosbie social media platform. Here are a few lessons from Harvard Business School blog:
Through unwitting leaks of critical information by employees, platforms like Facebook and Twitter can expose some of your company's secrets. Leaks are nothing new; companies have been eavesdropping on each other forever. But social technologies open new channels that permit snooping on an unprecedented scale. That's why corporate social-media strategy should include not only engaging customers, gathering intelligence, and reinforcing brands, but also shielding the company from prying eyes.
Here's a quick quiz: Have you ever tweeted your business-travel plans? Does your LinkedIn profile describe what you do in great detail? Is localization enabled on your mobile device when you use social media?
If you answered yes to any of those, you and your company may have left footprints that your competitors can detect and analyze.
For example: An analyst wanted to generate data on how a major consumer-electronics company's leading product was doing. In a matter of minutes, readily available software tools mined half a million social-media comments for information about the company, revealing that 75% of 21-to-35-year-olds and 60% of 36-to-50-year-olds had made neutral or negative comments about it while people 20 and younger (a group largely underestimated by the company) showed 100% positive sentiment about it. The analyst inferred that the company was losing its business customers fast and that a competitor could gain by targeting younger users.
Employees and senior executives alike are sometimes too casual about disseminating the information they possess, or they don't understand what's confidential and what isn't. A few tweets or Facebook comments about a work project can give a competitor valuable insight into a company's product plans, and travel information might suggest that marketers or salespeople are aiming at new clients or regions.
As an exercise, we analyzed the LinkedIn profile of a senior executive from an aerospace company, responsible for sales in Latin America and the Caribbean. We noticed that he had added new links to salespeople in a new region in a short period of time. The contacts were highly suggestive of the company's plans.
RISKS
There's a vague but growing awareness of these vulnerabilities in the corporate world: One recentsurvey shows that companies are beginning to recognize the risks posed by social media to their confidential information, with 37% of employers saying that Facebook poses the greatest risk and 27% citing LinkedIn. Another study shows that only 50% of senior financial executives from both public and private companies are confident that sensitive or confidential information is adequately protected on social-media platforms.
But most companies are still unaware of the risks and the tools that can help mitigate the danger. Here are a few measures that every company should consider to reduce its exposure.
  • Assess. Determine what's important for your company to protect. Perform an internal assessment to look for the core information that you care about most, and tailor policies and actions around the findings.
  • Educate. Make sure everyone in the company understands what information might be sensitive. An individual's list of LinkedIn connections or Twitter followers reveals his or her networks. Facebook likes and favorite articles in Google Plus leave footprints showing areas a person has studied and new strategic initiatives he or she may be involved in.
  • Guide. Establish clear and simple social-media usage policies. There's a database of such policies here to help you get started.
  • Keep it inside. Implement and promote internal social networks that are walled off from the outside world. These platforms allow employees to talk shop in a social environment without risking information leakage. Use incentives to encourage adoption, and make sure senior employees lead by example.
  • Monitor. Set up continuous monitoring of employees' postings on social media about such matters as business travel, job assignments, and reorganizations. Dell, for example, has established a social-media listening center to track conversations and provide intelligence to executives. Put yourself in your competitors' shoes and war-game a determined effort to find information about your company.
  • Limit. There's little reason why your company's information should be accessible by analytical tools such as those that allow users to download critical data or analyze an individual's full social-media postings. Most tools allow webmasters to prevent spiders from crawling and indexing their sites.
  • Disable geolocation. Make sure employees turn off social-media geolocation features. Many companies have found that it's ineffective to simply forbid the practice. It's better to educate employees and show them the footprints they've already left. Take a look at what an app created by O'Reilly researchers Alasdair Allan and Pete Warden did with the geolocation information harvested from the consolidated.db file of the iPhone of a person living in New England.
Social media, by its very nature, is a tricky space to navigate. Both the opportunities and the risks are often hard to perceive. The key to seeing and minimizing the risks is to continuously test tools so that you can see where competitors might be able to find your secrets. At the same time, invest effort and senior management time in setting a good example.
Now it's your turn to act: Become a role model and help bring attention to the risks of social intelligence to your company. 

December 28, 2012

When it comes to valuation, size does matter.


Barry Critchley, Financial Post,  gives a useful summary of Crosbie and its views on GF Data's 5 year research report. Here are the highlights from the report:
• When it comes to valuation, size does matter. The data shows that for upper mid-market transactions (those between $100-million and $250-million) which have been completed by private equity groups “have consistently attracted premium multi-ples compared to smaller trans-actions.”
One key measure is the private equity total enterprise value divided by EBITDA: For the past years that multiple has been higher for larger transactions than it has for smaller sized transactions. In the first half of 2012, the multiple was about 7.9 times (compared with 7.8 for 2011) — or almost three percentage points above the comparable multiple for transactions between $10-million and $25-million completed over the comparable period.
Crosbie gives four possible reasons why size does matter: larger companies tend to have greater stability; are more able to attract greater leverage or debt financing; are in the sweet spot of the market (because more private equity groups are focused on larger transactions) and because larger mid-market companies have greater liquidity options including initial public offerings.
Crosbie is an investment bank doing corporate finance for owner operators.

Crosbie comments on research on private equity

Barry Critchley spotlights Private Equity deals over the past 5 years and the report on Private Equity by Crosbie in The Financial Post, Canada.
Read article:

All market participants have views on certain matters but until those views are researched they remain opinions without facts.
Toronto-based Crosbie & Co. Inc., which defines itself as a specialty investment banking firm, has now filled a potential void on the importance of private equity to the mid-market. The firm, which has been around for more than 25 years, recently published an analysis of 1742 North American transactions which have been completed over the past five years. The underlying data was compiled by GF Data Resources, a U.S. based firm that offers “a searchable proprietary database that provides private equity buyers, intermediaries, capital sources and valuation professionals with accurate and detailed information on business transactions ranging in size from $10-million to $250-million.”
Recently Crosbie published the results of that analysis.
“The document is powerful because it covers so many transactions over such a long period of time. One can draw some clear inferences for the broader M&A market from this unique data set, specifically for larger middle market transactions which attract higher calculation multiples,” said Colin Walker, managing director at Crosbie & Co.
Colin Walker: LinkedIn

December 21, 2012

Canada’s culture of risk aversion

The National Post has such an important story on Canada and its risk aversion.


Q  During your presentation, you mentioned Canada’s culture of risk aversion. Do you believe this can be changed?
BC  When you get to post-secondary education, our educational systems are built on a 150-year-old model that’s not set up for today. We reward tenure, not innovation. Our faculties are strong political silos, and what we need are students graduating who have diverse backgrounds. Business people who have a fine arts background are more innovative and creative and take more risk. The challenge is it takes a generation. So, first you have to get change in our university system, which is challenging. Second, you have to give it time to catch. You can’t change culture overnight.
JR  To me it’s the embracing of failure that is a big difference I see, particularly in Silicon Valley where entrepreneurs use failure as a badge of honour, and in Canada we don’t really do that. We view that as something you do not disclose or something that you’re ashamed of. I would have a far higher propensity to invest in an individual after three failures as opposed to seeing zero failures, because I now know that when that individual is going to be working on their next opportunity they’ll know where to pivot around. They move much faster and are able to get to the same point they were at the previous opportunity within a fraction of the time. So, when the company starts to scale; when the problems become far more complex, somebody who has dealt with failure, I believe, is able to navigate and pivot around those and not completely panic at a situation.

December 20, 2012

What is top public-policy to spur productivity?

Great summary of what Canada needs to get done to grow as a strong economy. The National Post makes it monthly subscription fee worthwhile with this one comment.


Q  We’re going to have a new premier for Ontario by the spring. From your perspective, what is the most important public-policy change that could be made to spur productivity in Ontario?
JR  A year ago on the Liberal platform, they introduced angel tax credits and a corporate venture capital tax credit that was extremely well received. It leverages pure market forces. The government doesn’t select. It really becomes an incentive. It was a very innovative idea. Ultimately, it got passed on largely due to the deficit situation. But those are two examples of something innovative that hopefully the next premier can resurrect.


December 19, 2012

Will the federal government $400-million venture capital fund help?

How is Canada doing? How will it do over the next year? National Post has a great summary of a presentation:

In a presentation to the Canadian Club of Toronto last week, Bill Currie,Deloitte Canada’s vice-chair and Americas managing director; and John Ruffolo, CEO of OMERS Ventures, highlighted the key obstacles to Canada’s improved productivity, including: a culture of complacency, a lack of Canadian investment capital, a disconnect between entrepreneurs and global markets, and more. They subsequently spoke with the Financial Post’s Dan Ovsey about some of the opportunities for Canada to improve its productivity in 2013. Following is an edited transcript of their conversation.
Q  In its 2012 budget, the federal government created a $400-million venture capital fund. What do you believe is the most productive way to use this money and do you believe the government should be in the business of managing a VC fund?
BC  The opportunity with the $400-million is to lever it up and create joint partnerships where private money will come in on top of it and you protect some of that private money. While that may seem challenging, it’s actually good policy because it drives extra benefit because we create those gazelles (growth businesses) we’ve talked about. Unless you do that, money will stay on the sidelines. Money will not come into this space unless they can get a return. But we haven’t seen the government’s response. You kind of worry that that’s taking so long.
JR  The fundamental question is the sustainability of limited partner investors over the long haul. This is really pension funds, corporates, financial institutions, coming back into the ecosystem and the real question is: can this stimulus be used to help resurrect it; to create a long-term track record of success. If it’s unable to do that, it really is just a one-time shot in the arm, and then you kind of go right back down again. That’s the anxiety that I have. But, I think the federal government’s response is extremely welcome and they’re taking it very seriously.

November 28, 2012

When you are approached by a sales person, do their questions actually irritate you? Do questions move the needle towards you buying their product or service? Emotions are a bad word in business probably because men are not comfortable in letting down their guard. Getting men in business to imagine their business with your products or services can be achieved by using stories. Consulting firms call their stories "case studies".Here is a great article on using stories.


During years, I have been taught that art of selling had a lot to do with the ability to ask intelligent questions, and then to present one's offer in the context of the answers provided by your counterpart.
However, with hindsight, when I look back at my most significant sales - or at least those I am the most proud of - 3 spring to my mind. And I have to recognize that what they have in common has little to do with my ability to ask "intelligent questions". These transactions shares a common characteristic, though: they were all generated via a story loaded with emotion.
  • More than 20 years ago, as I was working as a sales executive with a computer manufacturer, one of my customers was a large insurance company. One day, as a bold move, I decided to call the CEO of the company and I provided him with some evidence that, without a fast move from his company in terms of increasing their IT processing power, they might find themselves confronted with difficulties during their beginning-of-the-year premium collection process. 3 weeks later, I was signing a $6m transaction with this insurance company.
  • About fifteen years ago, I experienced a situation with a business intelligence (BI)project manager with a mobile phone operator who wanted to equip his sales people with customer intelligence capabilities on their laptopsAfter a few words, it appeared clear to me that this project manager had a competitive technology in mind and that the only thing he wanted from me was just a low price, which he could leverage to make his preferred vendor drop his own price. In a state of desperation, I decided to tell the project manager the horror story of another mobile telephone operator who had launched a similar initiative, and who had experienced a resounding failure. WhySimply because the sales executives had not made the effort to use the new capabilities. Too far from their good old habits. Too much disruption. After telling this story, and presenting some elements that he might consider to avoid falling in the same trap, my counterpart revisited the specs of his project, and eventually made the decision to buy... from me.

Are you misinterpreting the CFO?

It is unlikely that companies would deliberately be reluctant to consider new ideas that would save millions of dollars. However, what might be misinterpreted as reluctance, is that some organisations may find it more challenging than others to take ideas from the drawing table and translate them into reality.

Being organisationally effective at considering, adopting and implementing new ideas requires people to have the skills to change their behaviours to an appropriate extent and at an appropriate speed to be able to work with new ideas.

Some organisations are good at equipping people with such skill sets enabling them comfortably experiment with new ideas, and find ways to integrate them into the activities that drive the bottom line. However, it’s not just about equipping people with these skill sets but also about providing an environment where people are given a certain percentage of their working week as ‘time out,’ to reflect, experiment, and look for applications for new ideas.

Jacoline Loewen   See Jacoline on BNN, The Pitch  Author of Money Magnet Director, Crosbie Co.
Crosbie & Co.
150 King Street West
Toronto, ON
M5H 1J9
416 362 7726

November 27, 2012

Is Health and Wellness a cost?

Is Health and Wellness a benefit or a cost? Why would a CFO in a larger, employee heavy firm, not take a look at implementing a Health and Wellness program?

It is easier to get fired for doing something that went wrong or that someone found objectionable than it is to get fired for maintaining the status quo.

For example, in the corporate health and wellness industry, there is decades of evidence that positive ROI can be created with a solid wellness program. (And of course a poorly run wellness program can cost hundreds of thousands.) 

With health insurance costs skyrocketing it often amazes me when I see not fund a proper wellness program and go with "free" health fairs that are designed and run by medical doctors who simply use the corporate event to fill their out-of-network medical practice with patients.

It is management's responsibility to maximize the value of the organization but, despite all of the evidence that corporate wellness programs work, the average CFO still refuses to fund a professional program.  Their Human Resources or Benefits department struggle.

Jacoline Loewen   See Jacoline on BNN, The Pitch  Author of Money Magnet Director, Crosbie Co.
Crosbie & Co.
150 King Street West
Toronto, ON
M5H 1J9
416 362 7726

November 21, 2012

Why do cost saving ideas not get done?


The degree to which companies are having to cut spending and budget expectation is directly proportionate to the degree of cost saving ideas that have been implemented. 
Gary Hamel startled me in his book, Leading the Revolution, many years ago when he pointed out the top line of ROI and the bottom line.
CFOs are risk adverse by the nature of their characters. Ideas push up their blood pressure. Why take a risk?
Let's keep cutting costs because I can cope with revenue payments but not with a new project face plant.
Of course, wisdom indicates that no one will save themselves to prosperity. But is does turn an umbrella into a shelter.

November 20, 2012

Are CFOs using "Cost" as a reason not to start new projects?

I believe that cost is a major factor why companies are reluctant to consider new ideas right now.
Implementing new ideas can have significant upfront costs, while the savings and returns are usually only realized in the long term.
Companies are cutting costs and budgets due to the current economic climate, and this has a direct impact on what money is available for innovation and new projects.
Are costs holding back business growth this next quarter?

Jacoline Loewen See Jacoline on BNN, The Pitch Author of Money Magnet
Director, Crosbie Co.
Crosbie Co.

150 King Street West
Toronto, ON
M5H 1J9
416 362 7726

http://www.crosbieco.com/

November 19, 2012

How terrified are managers to do personal annual reviews?

You can never look bad to the board when you tell them you have some new ideas that will increase revenue that ties into the strategic plan. It shows that you are forward thinking. It is my opinion from being in these type of situations that the answer is this. 

Most of the executives I have worked with (70%) lack managerial courage. When you talk about saving millions dollars that means "beaucoup" changes in the organization that probably will effect people's jobs, layoffs, your power and control and the size of our office. This means having to talk to people who work for you that may not be good news for their self interest. 

Just look at how terrified managers are to do personal annual reviews. It takes courage to tell an employee they just aren't cutting it. A majority of men don't have the talent to resolve conflict and avoid it. They avoid conflict just like at home with their wife. Women run the house. (I learned this in Pyschology and talking to my coach) I was with a company who as a perk gave the three C-Level staff their own coach. 

We all know in our organizations staff who are negative and cause so much unproductivity but are given 5 stars at every review because their boss is afraid of conflict. I had a senior manager have a melt down one time because he was going to a different office without his mountain view. He tried to get me to back down on the change with intimidation. Conflict avoiders are everywhere. 

Many seasoned executives are afraid of new ideas because they don't want the pain of making the changes. Change agents don't last long in an organization. The executives that I have talked to who have been with the company the longest had one pervading quality. "They never took sides on anything and never initiated any change" 

I admire how quickly how quickly Microsoft could make organizational changes versus IBM whose ego really got in the way.

Jacoline Loewen, author of Money Magnet and on BNN The Pitch

Jacoline Loewen   See Jacoline on BNN, The Pitch  Author of Money Magnet Director, Crosbie Co.
Crosbie & Co.
150 King Street West
Toronto, ON
M5H 1J9
416 362 7726

Canada M&A deals drop 15 pct in Q3 as sellers wait


What is happening to businesses in Canada? It seems that the sellers are waiting for uncertainty to pass. When BNN asked Ed Giacomelli, Partner at Crosbie & Company, for his views on where we were, he said that the Q3 deal volume down 15 pct from Q2, 25 pct on year. BNN asked Mr. Giacomelli for his opinion on these lower rates of M&A, he said he believed it was due to the uncertainty but that by next year, sellers will be more confident again.
In addition:

* Deal value of C$40.5 bln was up 18 pct from Q2

* Big CNOOC/Nexen deal skews data

TORONTO, Nov 14 (Reuters) - The volume of merger and
acquisition activity in Canada slowed 15 percent in the third
quarter from the second as market uncertainty held back
prospective deals, though a blockbuster bid by China's CNOOC Ltd
for oil producer Nexen Inc helped boost the overall value of
transactions, a report showed on Wednesday.

Worried that a new project may ruin your image?

Even though a new project or tool is going to make the CFO look good, there is always that other side...that 'why didn't he/she come up with the solution earlier since it was out there before?
The CFO needs to remember that since they have the opportunity to do something about it, now is the time to do it.
Don't worry about anything else except that it makes sense for the business or the practice. 
It makes sense to get it done, now.

November 15, 2012

Have you heard of Insight Selling?

Implementing any consulting service involves focusing more on the potential for the prospective client to change and less on clients with potential to buy. 

This involves "insight selling" as opposed to old school "solution selling". The difference is insight selling involves looking for agile organizations who have not identified the potential problem you can help them solve while "coaching" them into the buying decision through producing disruptive information that uncovers unmet needs vs. asking a lot of questions hoping to . 

This is typically easier to accomplish when you target people within the organization who fall into the category of go-getters, teachers, and skeptics. Avoid people who fall into the category of guides, friends, climbers, and blockers who while friendly can't build consensus within the organization to change providers or take actions that would lead to saving money.

Jacoline Loewen, The Pitch on Business News Network, BNN

Jacoline Loewen   See Jacoline on BNN, The Pitch  Author of Money Magnet Director, Crosbie Co.
Crosbie & Co.
150 King Street West
Toronto, ON
M5H 1J9
416 362 7726

November 14, 2012

How does an outside advisor get the CFO to buy?

A CFO's reluctance to try something new, even something that would save the company significant dollars, can be attributed to the initial lack of trust in the advisor that brings the idea to the table. 
It takes time to foster a relationship of trust with an individual who has much at stake in a company – whether it’s just a job, equity, leadership position, or just plain reputation. 
So if the idea is presented by an outside advisor, that advisor should invest into the relationship and over time gain the trust that is necessary to execute the idea presented. 
Additionally, new ideas typically require a lot of work above and beyond the normal day to day responsibilities of the status-quo. So it is imperative to obtain buy-in from every individual that will be involved in the process. 
You know how the saying goes, a chain is only as strong as its weakest link. That, I believe is one of the biggest hurdles companies need to overcome when considering new ideas. Everyone has to be on board so that it is properly implemented and successfully launched. 
My 1.5 cents.

Jacoline Loewen, BNN The Pitch 

Jacoline Loewen   See Jacoline on BNN, The Pitch  Author of Money Magnet Director, Crosbie Co.
Crosbie & Co.
150 King Street West
Toronto, ON
M5H 1J9
416 362 7726

Does your business have lumpy payments?


If your business doesn’t have enough cash, you will be under stress. That is something I experienced first-hand. When you don’t have enough cash, you feel pressure to take any client who shows interest. This is usually a mistake. Trying to be all things to all people is a downward strategy.
Most owners understand this. When you are under pressure to pay your bills, it’s hard to say no — even if the customer is outside of your target market. You need money, you take the business, and you often end up spending too much time serving the customer. And if you stay in this cycle, you put your business at risk. When you own a microbusiness, burning time is just like burning money.
Several years ago, I did some work with a graphic design firm, Gray Cat Studio. Michelle Bisceglia, the owner, had built a knowledge base working with specialty food manufacturers. She knew a great deal about the businesses and what made them successful.
When I first started working with her, she would take work from anyone. She often lost money when she went outside her knowledge area, but like many microbusiness owners, she was often short on cash.
We worked on developing her niche and I coached her in using a new word: No. Over time, two things happened. She was able to charge higher fees because of her expertise, and it took her much less time to complete projects. This allowed her to create a cash cushion, which made it even easier to say no to customers who didn’t fit her profile.
Two Paths for Microbusinesses
Ultimately, microbusiness owners have two choices. They can choose to remain a microbusiness, like Ms. Bisceglia, or they can do what I did in my previous business and move into the next level, the traditional SME. In both cases, understanding the drivers that create cash for living and saving is crucial. If you want to grow, you will not only need to finance your own living needs and retirement savings, but you also need to create cash for growth.
There is no good or bad about this decision. It’s truly about an owner’s preferences. Some people decide they want a bigger business, and some are happy just doing what they want without having to worry about managing other people.
If you choose to stay at the micro level, you need to understand that lumpy sales exist and you must have a strategy for dealing with them. You should have a plan in place in case you become disabled. You should have a strategy for saving for retirement, because you will not be able to sell your business.
What do you think? If you’re a microbusiness, what are your challenges? Have you decided to stay at this level?
Jacoline Loewen   See Jacoline on BNN, The Pitch  Author of Money Magnet Director, Crosbie Co.
Crosbie & Co.
150 King Street West
Toronto, ON
M5H 1J9
416 362 7726

November 13, 2012

The Asian Century will switch from 'quantity' of growth to quality

Will China perform as many experts say it will" Here is the journal of a recent trip to asia by a Goldman Sacks leader"
In the first decade of the Asian Century, much of the story has in effect been about the 'quantity' of growth rather than the quality and sustainability.
This is especially true with respect to China as I shall discuss in more detail, but also for India, Indonesia and others (if not, of course, in Japan where it has been and remains the absence of either). I introduce the aspects of my trip in this context because I think part of the challenge right now is that markets had become used to the drug of the quantity of growth in the region.
And importantly, in terms of our expectations, we never were and are still not, assuming that the same intensity of nominal and real GDP growth will continue.
For this decade, 2011-2020, for example, we are assuming that China will grow on average by 7.1%, down from 10.5% the last decade, and India 6.5% down from 7.5%. We are expecting the N-11 countries to see their real GDP accelerate to around 5.3% from 4.2%, but this would not be powerful enough to offset the softer Chinese and Indian growth in aggregate.
Let me re-emphasize that if China, India and the Asian N-11 countries achieve what we assume, their share of global GDP will rise sharply and the world will probably grow faster than previous decades, despite their softer growth rates.
 Jacoline Loewen   See Jacoline on BNN, The Pitch  Author of Money Magnet Director, Crosbie Co.
Crosbie & Co.
150 King Street West
Toronto, ON
M5H 1J9
416 362 7726

What forces a business to change for the better?

People just go to the office, grab a coffee, do the stuff they were trained to do 10 or 20 years ago, go to the meetings in their calendar and go home, its a wonder anything changes at all anywhere. 
New companies do new things sometimes, but then stagnate. 
The way of the world, with exceptions I'm sure, is sadly that external crises only stimulate change. 
You all must have seen the same yourselves for the new ideas you've seen. 
Once people are in the comfort zone that's it, they're staying there.
Buy Money Magnet, by Jacoline Loewen, learn new ways to find money for your business.

Jacoline Loewen   See Jacoline on BNN, The Pitch  Author of Money Magnet Director, Crosbie Co.
Crosbie & Co.
150 King Street West
Toronto, ON
M5H 1J9
416 362 7726

November 12, 2012

By definition, it is management's responsibility to maximize the value of the organization.

Yet growth is a confluence of issues (love that terminology). Yes, employees do get mixed messages but management (unless they are owners) are employees too. Complacency, ego and fear of failure happenign resulitng in the pink slip will all stop CFOs from changing the ways things get done.
There is no simple answer to helping a CFO look at risk and trade offs more but creating the right environment is a huge step in the right direction.

How do you do that?

Jacoline Loewen, Author of Money Magnet.

Jacoline Loewen   See Jacoline on BNN, The Pitch  Author of Money Magnet Director, Crosbie Co.
Crosbie & Co.
150 King Street West
Toronto, ON
M5H 1J9
416 362 7726

November 9, 2012

How can a CFO add value in a family business?

The role of the CFO, particularly in a family business, is to help gather up all the ideas flying around the company and work out the risk and reward for each potential project.  Often, these ideas originqte with a comment from the business owner who then forgets.  A CFO is needed to capture the ideas and try and get them onto one page in order to choose the priority. To explain it better, here is the CFO of a family business explaining his situation and how he added value.
Once whilst in a new role I inherited 50-projects, all of which had the opportunity to add revenue, save lots of dollars, or lose dollars.There was however no clarity over which projects would do which. 
I think the simplest answer to "What should we do?", is PROVIDE CLARITY (in addition to having the right structure in place), to leaders who are completely inundated with hundreds of competing priorities. 
To continue - I managed after some time and much investigation to get all of the 50-projects on 1-page with the 'Approximate $ annual return' and '$ return per hour invested' for each project. It brought amazing clarity to the situation. Some projects were canned instantly. Some had potentially staggering returns. 
Projects were then pursued in detail and prioritised accordingly via a stage-gate process. 
Another important enabler is DETAIL, proving to the boss that all angles have been considered. I cannot stress this enough. One criteria for allegedly great consultant ideas, for instance, could be 'Do I trust this consultant who is offering me this advice, and if so, why?'. 
All of this should help in some part to help clear the fog and enable leaders to focus on the best opportunities in an environment where everyone is doing more with less.

Jacoline Loewen, author of Money Magnet, weekly TV Show, The Pitch, BNN

Jacoline Loewen   See Jacoline on BNN, The Pitch  Author of Money Magnet Director, Crosbie Co.
Crosbie & Co.
150 King Street West
Toronto, ON
M5H 1J9
416 362 7726