What Is Your CFO Thinking About? (April 2013)

The other day I was in a Board meeting awaiting my portion of the presentation I began thinking about the level of detail that I had at hand.   Other than to gather a few last minute facts and write the materials (memo, PowerPoint, etc.) I don’t prepare for Board meetings.   I feel it is like preparing for a test of what you have learned in life . . . either you know and understand the company or you don’t.   What occurred to me, however, is the very different level of detail I have in my head for various client companies at the same time. 

I have a client who is in a very challenging position and as a result I can speak to the exact amount of cash they collected each day last week.   I know the AP balance and the five most critical bills we have to get paid in the coming days.  I know precise amounts of payroll runs, the day the cash pulls from the bank and how we have to manage cash so that payroll clears.   All of this is important, but none of it adds long term value other than for the company to survive the next week so that perhaps we can think about the long term sometime down the road. 

On the other hand, the Board meeting that I was attending was for one of my most successful clients.  Four months into the year we are ahead of our most aggressive expectations.   I can speak off the cuff to revenues, expenses and cash balances relative to plan.   I can speak to where we have favorable and unfavorable variances and why.   I have a framework for speaking to the amount of cash we will build between now and year end as well as the amount of debt we will repay. But the facts that do not need to occupy my mind are exact dates and amounts of specific vendor payments, payroll runs, cash collection dates, etc.  As long as we are managing according to plan all of this can take care of itself and I can leave the details to the accounting managers.  

Instead, I can use my time to think about various scenarios that we might encounter over the next three to five years.  We can develop scenario planning models on how we will operate under different sets of economic and industry circumstances.   The Board kicked off an active discussion of risks the company could face in the future.  We plan to follow up this discussion with an in-depth call and spend additional time on this topic at a future Board meeting.  The night before I had dinner with a Board member and had a discussion about how we could improve the financial operations of the firm.   He had some good outside perspective and offered to spend some time with the team.

 
My point is that your CFO should be thinking about long term issues and related consequences.  He or she should be part of an active discussion about long term risks and opportunities to the business.  They should either be part of or driving the strategic planning process.   If they are spending the majority of their time dealing with near term tactical issues or crises, then that is a sure sign that the business is troubled and the entire management team needs to be pulling together to get the company on a stable footing.   It’s only from that position that the company can grow and become successful.  

If you’re not sure where your company stands, walk into your CFO’s office and ask:  What are you thinking about?

If your business could benefit from fractional CFO services, I would welcome the chance to speak with you.  Please give me a call at (314) 863-6637 or send an email to     For more information, visit www.homza.com

your cash is flowing.  know where.^®    

Ken Homza   

Copyright @ 2013 Homza Consulting, Inc.

Do What You Should: Not What You Want (March 2013)

We can all fall victim to doing things that we like to do rather than doing things that we should.  As you go about your day, and more importantly as you plan the future, it is important to distinguish between things that you should (or must) do for the growth of your business as opposed to taking on tasks that feel like progress but are not on the critical path to truly making the business a success.  

Years ago, I met an entrepreneur who was seeking financial advice.  At the time we met, he was literally down to a few weeks of cash to run his business.  He told me about some wonderful sales opportunities that were “low hanging fruit” but expressed concern about the ability of his lead sales person to close the deals.  I asked him:  “What are you doing?”   His eyes lit up as he told me about the next generation of product he was developing.  My advice to him was to “stop working on the product and to go close those sales.”  He replied: “Oh, I don’t like doing that.”  I told him it didn’t matter what he liked doing it was about what he needed to do.  Without those sales he had no hope of getting to the next generation of product yet he was choosing to do what he liked to do – developing software – as opposed to doing what he should be doing – closing sales.  

There is a lesson in this for all of us.  While the situation may not be as extreme as in my example (and hopefully it is not) it is a glaringly obvious example to which you may be able to relate.  We need to prioritize the limited amount of time we have in our work lives to do what is most important for the betterment of our companies, clients, and individual careers.  It is easy to spend time doing things that you can justify as important, and perhaps they actually are important, but are they the most important things you can do?   Are they the things that add the most value or are they merely things that we can justify to ourselves and others as being important?   

One of the things we all have to do in order to do this effectively is to be able to effectively delegate.  And to do that, you need to have some talent around you to whom you can delegate. I am constantly amazed by people who fail to develop the people around them (including their own subordinates).  The only way you can raise your game (and that of your company) is to work at a higher level today than you did yesterday.  For most of us, this means constantly learning and growing so that you can delegate (or in some cases eliminate) tasks that you have mastered.   

If you are a leader, you have to spend more of your time thinking and acting on big picture items that could have significant impact on the business whether or not that is where you want to be spending your time.   Ask yourself, what you could do today, this week, this month, this year that will change the trajectory of your business. Not by 5% or 10% but by 100% or 1,000%.   It’s only by thinking about ways to have big impact that you are going to start to make significant progress.   Even if you fall short of a 100% goal you will certainly have achieved more than if you succeed in hitting a 10% goal.  As Les Brown is quoted as saying, “Shoot for the moon.  Even if you miss, you'll land among the stars.”

If your business could benefit from fractional CFO services, I would welcome the chance to speak with you.  Please give me a call at (314) 863-6637 or send an email to   For more information, visit www.homza.com

your cash is flowing.  know where.^®    

Ken Homza   
Copyright @ 2013 Homza Consulting, Inc.                                                              

Be Here Now (February 2013)

Years ago, I frequently participated in professionally facilitated strategic planning sessions.  I still remember the leader of one session standing up at the beginning and asking everyone to “Be Here Now”.  What did he mean by that?  Well, it was actually a plea to the people in the room to be focused on the discussion at hand. This meeting was before the time when literally everyone was multi-tasking and attending to emails, texts, and countless other items that now fill our daily work lives. Today, some companies actually have a “cell phones off” policy during meetings and   I certainly understand why those policies exist. While people are obviously physically present during meetings their thoughts can be very far away.  

We have all seen this happen and most of us have been part of the problem when we were barely paying attention while in a supposedly important meeting.  While it’s easy to blame the participants it’s often the case that they are sucked into a meeting which has no agenda, no set end point, a wandering discussion, and almost no intellectual stimulation.  No wonder people are bored and trying to get other tasks done in a work world that has gone far beyond the old “9 to 5”. 

How do you keep people engaged?  Make sure that there is a compelling reason for people to be at the meeting.  If the purpose is to convey information, make sure that it is both relevant and concisely presented. If the purpose is to make a decision, make sure people know what decision they are being asked to make up front.  Stick to the agenda.  Minimize extraneous conversations that are not relevant.  End the meeting on time.  Almost everyone’s schedule is booked non-stop; once you start to encroach upon the other items on people’s calendar you will undoubtedly lose their attention.   If you can end the meeting early, don’t drag it out just to fill the allotted time.  I have never heard anyone complain about a meeting that accomplished the objective but ended early.  

Pay attention to the reactions of people in the room.  If you can see that you are starting to lose their attention, do something to get it back.   Ask them to “Be Here Now” or find some other way to pull their attention back to the topic at hand.  If necessary, quit and reschedule with a better agenda and better prepared materials. 

People who know me well know that unless it is a strategic planning session or similar, that my tolerance for a meeting rarely extends beyond an hour.  If used effectively, a lot can be accomplished in that time period.  I recently participated in a quarterly Board of Directors meeting that covered 2012 full year results, accounting changes, key performance metrics, new business development initiatives, January revenue performance to plan, status of the year end audit, performance measures we wanted to introduce for the upcoming year, an update to 2013 goals and budget, approval of prior meeting minutes, and a few new business items as well as a potential problem area we wanted to let the Board know we were watching.  It was certainly a lot to cover but the meeting ran barely more than an hour.  Materials were well prepared and circulated in advance, people arrived prepared, were focused during the meeting and none of us who were presenting felt the need to fill more time than was absolutely necessary.  

 
The next time you are in a meeting, think about that phrase:  Be Here Now!

If your business could benefit from fractional CFO services, I would welcome the chance to speak with you.  Please give me a call at (314) 863-6637 or send an email to    For more information, visit www.homza.com

Titles Don't Matter (January 2013)

Titles don’t matter to true leaders.  True leaders do not lead from their title but rather by their actions. They lead by the decisions they make and how they make them. They lead by including others and by getting broad input. They embrace others who may disagree with them and seek to learn from their views.  They accept responsibility for both good and bad.  They delegate authority to act rather than tasks.  They help those around them learn and grow.  They surround themselves with the smartest people they can find and are not worried if they are not the smartest person in the room.  They are not afraid to admit their mistakes and learn from them.     

Whenever someone makes a decision and justifies the decision by reminding people that their title gives them the authority to make that decision, then one knows that they do not have the support of the organization.  They also are admitting that they have little confidence in their own decision if they have to use their title to back it up as opposed to making a compelling case based upon logic and the facts at hand. 

Please note that this is different than “the buck stops here” message.  All CEO’s know there are times that tough decisions need to be made and that the executive team is split.

I recently had the opportunity to attend a portion of an all company meeting of a client firm.  The leadership openly talked about both the successes and failures of the recent past.   When they discussed the successes, they were quick to share credit.   When the discussed the shortcomings, they were quick to take ownership and talk about what they leaned in the process. 

Another characteristic of leaders that I have noticed over the years is that they usually introduce themselves without a lot of fanfare. I once heard a company founder and president introduce himself by saying: “I’m with ABC Company”.  It was a very modest introduction given his role and ownership stake. I personally learned the value of this approach during my tenure at LensCrafters.  I had introduced myself as “one of the finance guys” to a new employee.   As I stepped into the next cubicle to talk to someone else, I could overhear the conversation that followed.  A long time employee laughed at the modesty of my introduction and went on to explain the scope of my team’s role in the company. It was a much more glowing description than I would have ever given myself. 

Titles don’t bequeath authority as many seem to think. True authority comes from leadership.   And titles are simply the acknowledgement that later follows. They are nice to have, but you certainly can’t rely on them to get the job done.  Whether you are a C-level executive or low man on the totem pole, think about how you demonstrate your leadership every day.  It has been said if even one person is following you, then you are a leader.  Think about why people follow your lead.

If your business could benefit from fractional CFO services, I would welcome the chance to speak with you.  Please give me a call at (314) 863-6637 or send an email to     For more information, visit www.homza.com

your cash is flowing.  know where.^®    

Ken Homza   

Copyright @ 2013 Homza Consulting, Inc.

Synthesis (December 2012)

The Random House College Dictionary defines synthesis as a “process of reasoning in which the conclusion is reached directly from given propositions and established or assumed principles.”   When communicating (whether in business or your personal life) it is critically important to communicate the complete picture presenting both sides of any argument along with the perspective and conclusions that are drawn from the facts at hand.  Too often, people communicate disjointed facts and snippets of information without taking the time to bring true meaning and value to the words they are putting “on paper” (of course, on paper intended to cover electronic communications as well).    

Too often, readers end up shaking their heads and wondering what the sender was trying to tell them.  Frequently, this generates a quick email reply and before you know it, there are dozens of emails flying back and forth in an effort to get a point across.   The time wasted trying to make sure that all parties understand each other can be enormous especially when compared to the amount of time proper communication would have taken in the first place.   

Worse, is when the “sound bite” sized communication is completely misunderstood and left unquestioned.  The writer has one thing in mind, the reader something quite different but the communication was so limited that the interpretation is literally left to the imagination.   

Often miscommunication is unintentional, but there are also times when it is truly the case that the sender is simply not relaying all the information they have at hand.  The sender may be trying to paint a version of the truth to portray him or herself in the best possible light; and at times is intentionally misleading.  We all make honest mistakes and miscommunicate from time to time, but to intentionally leave out facts and mislead is unforgivable. 

We have all seen people act based upon misinformation.  I am in the midst of cleaning up one such mess right now.  In this case, there are at least five parties (myself included) to be blamed (not that establishing blame at this point does much good). 

When you are on the receiving end of communications, step back and consider whether or not it appears you are getting all of the relevant information.   Are there facts that you wish you had that might change the overall conclusion?  

Also, “consider the source”.  If you read with a critical eye, you will begin to learn who communicates to you in a “fair and balanced” approach versus those that are “leading the witness” with a slanted view of the facts driven at trying to reach a spurious conclusion.   

When you are the sender, make sure that you take the extra time to communicate properly.  Sometimes, it is as easy as an introductory sentence or two in an email about the spreadsheet or word document that is attached.  Too often, people simply say, “See attached” without a word as to what they wanted the reader to take away from the attachment.  Proper synthesis of information will make for better communications, quicker and more appropriate action, and ultimately a more profitable company. 

If your business could benefit from fractional CFO services, I would welcome the chance to speak with you.  Please give me a call at (314) 863-6637 or send an email to     For more information, visit www.homza.com

your cash is flowing.  know where.^®    

Ken Homza   
Copyright @ 2012 Homza Consulting, Inc.

Action (November 2012)

I am always amazed at the lack of action I see in companies that are in the midst of crisis.    Problems abound and people generally know what they are but everyone seems to tolerate them for some reason or another.    In cases such as these, I ask a lot of questions but then finding myself telling people what to do.  My preference is not to give orders but rather to help people learn how to make better decisions.  Ultimately, I want to leave each of my clients better than I found them.   I want their processes to be better and more efficient.   Revenues and profits should be up and the staff should have skills they didn’t have before I arrived on the scene.   That being said, sometimes I have to make staff development a longer term goal in order to be effective immediately.

I always get surprised looks when I tell people to change operating procedures, to do things they haven’t done before, to stop doing things they have done “forever”, and when I invariably restructure financial reports.  A typical question I get is whether the CEO or owner had said “yes” to my direction.  My response is always the same. “I didn’t ask.”  Too many people, sometimes even at surprisingly high levels, have the belief that they should get permission for everything that they do. 

A favorite boss of mine told me something early in my career that I will always remember. It is better to ask for forgiveness than permission.  He added, you’ll always get forgiveness but you’ll never get permission.  He had a reputation for being a bit of a cowboy in the organization.    He also had the reputation for being highly effective.   He and I shared the belief that if you wait for permission, you’ll never get anything done.  In the entire time we worked together we were only challenged once for breaking the rules.  It was a challenge that was easily overcome.  

Another question I often get is “What if we make a mistake?”  “Then we’ll fix it”, I reply.    Everyone makes mistakes but what people often don’t realize is that they are making mistakes every day by not doing things differently.   They feel that by following rules and procedures they are “being safe”.   Usually the opposite is true.  They are developing a reputation for themselves of not being effective.  Moreover, that puts them in the “part of the problem” camp as opposed to the “part of the solution” camp.  

I am not suggesting breaking rules or abandoning procedure just for the sake of doing so.  Processes and procedures do exist for a reason.  But when a company is in crisis, things need to change and change comes from taking action.  Often, a big part of the reason a company is in crisis is due to lack of action.  People wait and hope for things to get better even in the face of overwhelming evidence that something needs to change.  Sure, there will be a few mistakes along the way but if action is well thought out it’s highly unlikely that those mistakes will be any worse than the alternative.  

Look around your organization.  Think about the way things are being done and what is not being done.  Then take action.   

If your business could benefit from fractional CFO services, I would welcome the chance to speak with you.  Please give me a call at (314) 863-6637 or send an email to      For more information, visit www.homza.com
your cash is flowing.  know where.^®    

Ken Homza   

Copyright @ 2012 Homza Consulting, Inc.

Are You Driving Busines Away? (October 2012)

I know this sounds ridiculous but October seemed to be the month where retailers were determined to drive business away.   Maybe it is just me but with third quarter economic growth just 2%, I’d think more businesses would be doing everything they could to get more customers.   Frankly, I think many businesses are trying but something is clearly getting lost in the translation between owners and the front line customer service people.   Here are a few examples. 

My wife and I were out on a Saturday evening.  It was about 5:40 PM and I called a new restaurant to ask if they had a 6:00 o’clock table.   The person on the other end of the phone said she didn’t know how crowded it would be . . . they were expecting a lot of people very soon.  She basically discouraged us from coming.  They are new and I have never seen them that busy.  Besides, this is fairly early dining on a Saturday.    It was on the way home so we just swung by . . . they were half empty!   We had a nice dinner but I still wonder what was going through her mind when she answered the phone?   

The same weekend (on Sunday) we stopped by a local garden center.  We had a coupon and were told it wasn’t good until Monday (it was in the fine print which I will admit that I rarely read).  Ordinarily, I’d just say “OK” but the person went on to tell me I wasn’t the first customer to ask and that management knew everyone would want to use the coupon that weekend and decided it was better to say “no”.  She then further proceeded to explain how they couldn’t take a $5.00 coupon a day early without reprogramming the computer system and how much work that would have been.  I shook my head, made a $2 purchase (because it was something my four year old had selected and I didn’t want to disappoint him) and left $30 worth of flowers behind.  I’m not sure why the employee felt she had to explain so much but I just couldn’t bring myself to patronize a business that intentionally made a decision which was adverse to the customer.  I bought the flowers at a different garden center on the way home.  

A local personal services company sent me an email offering a discount on a punch card.  I don’t frequent them very often (which they actually mentioned in the email – they were trying to get me in the door more frequently).  It was a nice email and a good offer so I decided that I’d stop in and buy the card the next time I was in the area.  In theory, this is great for the business.  They get cash up front and the card in my wallet is a constant reminder that I should patronize them (especially since I‘ve already paid for services).  I stopped in to buy it.   The person at the front desk said he had heard something about the email but didn’t really know the specifics of the deal.  He suggested I go home, print the email and bring it back so he could honor it.   Unbelievable.   The owner sent out an email, actually got me to stop by with cash in my pocket, and the guy at the front desk turned me away.   I’d still go there – but just haven’t been back.   Shouldn’t they have taken my money when I offered it to them?

 
So, what’s the point?   Make sure you understand how the people who interact with customers (or potential customers) are behaving.  Are they doing everything possible to win business or acting like the people I mentioned above.   Big companies “secret shop” their own stores.   They do this for a reason.  Are you driving business away?
 
If your business could benefit from fractional CFO services, I would welcome the chance to speak with you.  Please give me a call at (314) 863-6637 or send an email to    For more information, visit www.homza.com 
your cash is flowing.  know where.^®    

Ken Homza   

Copyright @ 2012 Homza Consulting, Inc.