CFOs focusing on continuous improvement amid turmoil

Finance executives are increasingly relying on the concept of "continuous improvement" as a way to navigate today's uncertain economy.

According to a report released Wednesday by Financial Executives International's Financial Education & Research Foundation, 97% of companies identify the areas for improvement through a management review, while 80% rely on employee suggestions and 32% look to external consultants. For the report, FERF surveyed over 150 FEI members and interviewed financial executives and other subject matter experts. They found that technology, talent and process were considered to be three of the most impactful areas of focus for accelerating change in an organization, followed by data quality, operations and other functions.  

"We encourage and support a continuous improvement mindset and culture with all of our high-growth private-business owners," said EY Americas private assurance leader Anthony Sgammato in the report. "It's the best way to ensure a focus on doing things the most efficient, effective and productive way, every single day."

Many finance professionals reported that they act as valued partners in achieving continuous improvement by driving change and keeping accountability through established budgets and proven metrics. Having someone on the management team own the program efforts is essential to driving the culture, attaining consistency and ensuring that emergencies don't derail any efforts, in order to achieve lasting success.

Within the next 12 months, 72% of survey respondents indicated they're looking for opportunities to streamline processes and consolidate systems, to increase efficiency. CFOs interviewed for the report favored these kinds of initiatives because they, in many cases, represented less significant investments. In addition, the CFOs indicated that removing inefficiencies is something they're looking at as they continually reimagine work in their organization moving forward.

A 94% majority of the survey respondents indicated their continuous improvement programs were aimed at delivering incremental improvements, rather than instantaneous breakthroughs. CFOs that reported having success with continuous improvement initiatives repeatedly underscored the importance of process and patience.

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"Continuous improvement has always been an important part of planning and optimization for any organization, and goes hand in hand with leadership and innovation," said FEI and FERF president and CEO Andrej Suskavcevic in a statement. "As businesses look to stay competitive, now more than ever, leadership finds the process essential to cost reduction initiatives while maintaining operational excellence, and competitive success."

One CFO interviewed for the report said he works with a continuous improvement manager and his company's chief intelligence officer to address weaknesses and inefficiencies through careful planning and adherence to well-defined practices. Others said that they take more of an ad hoc approach to continuous improvement.

While their approaches and methodologies may vary, finance professionals are playing a more integral role in driving change and providing the necessary metrics to make their businesses better.