What Should Transparency Look Like Between Management & Ownership?
One of the most common questions that a CFO will hear on any given day is “What keeps you awake at night?” The list of answers that I have heard CFOs provide (and that I am sure I have given) to investors over the course of my career are almost as cliché as the question itself and virtually always read like a financial doomsday list:
- How do we mitigate systemic cost pressures;
- Can we execute growth plans despite a constantly evolving operating environment that differs dramatically from original circumstances;
- Are we doing enough to ensure that our brand “stands out” in a crowded market place;
- How do we maximize room rates yet stay competitive;
- Talent availability and costs;
- Cyber Security….enough said;
- Macro-economic factors beyond our control – are those pesky mosquitos going to spread Zika again next year!
The list could literally go on forever………
Please don’t misunderstand me, these items are all real concerns, but I like to look at this from a slightly different angle and ask another question – “What can a CFO do to allow everyone to sleep better at night?”
“What can a CFO do to allow everyone to sleep better at night?”
With private equity investors and frankly the majority of investors in general focused on creating value in very short order, the CFO role is now heavily focused on a commercial view allowing them to partner with the CEO and operations to help drive business forward. In addition to having a commercial point of view, the CFO still needs to be the master of the numbers; keep an sharp eye on cash flows; manage board, banking, and investor relationships; as well as obligations to other departments such as People, Legal and IT. All of these responsibilities could be viewed as intricate, the answer to the question, however, is not. What can a CFO do to allow everyone to sleep at night? Be Transparent.
Being Transparent is an all-inclusive proposition. One cannot hope for success if transparency is only afforded to members of the board or investors. Transparency needs to be embedded in your culture and the CFO plays a critical part of making sure that this happens. Transparency does start with the numbers. Every department needs to have ready access to their financial data and more importantly the understanding of how this impacts the company as a whole. Providing the proper tools to departments so that they master their own figures and appreciate how it impacts the value of the business as a whole breeds success. Open and honest communication on this front develops a mindset that everyone’s job is critical to the success of a venture. It also creates an environment that entices teammates to ask questions and present ideas that might have otherwise gone unspoken.
Our team appreciates transparency in being a part of a great environment and knowing that all ideas are welcomed!
Transparency is a critical value to Virgin Hotels and resides in virtually everything we do. Our guests benefit from transparency in that there are no hidden fees. Property owners of our hotels appreciate the transparency in our management fees. Our team appreciates transparency in being a part of a great environment and knowing that all ideas are welcomed!
Will transparency eliminate all of the challenges we face, absolutely not. But it will allow a united team to face those challenges head on which is the only real way to succeed……and sleep better at night.