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CFO Guide to Strategy Execution

Shortly after college I found myself in a rapidly growing service organization on

the fast track to management. Being in the professional world was a phenomenal
new experience, so I was eager to soak up as much knowledge and experience as I
possibly could. After a year or so, I had all the confidence in the world and felt
like a business pro ready to take on the corporate world. One day, a former
business professor called and asked me if I would be willing to put together an
alumni group to compete against his students in the colleges business capstone
course. Each semester, groups of students compete against each other in a
business simulation where they run' an airline. Every week, the students make
decisions about strategy, marketing, sales, finance, IT, etc. The group decisions
are input and a stock price is derived based on their airline's position in the
industry, which is made up of the other groups airlines. This was the first
semester that the professor decided to add an alumni group to up the ante and
increase competition for the student groups. The airline with the highest stock
price at the end of the semester wins. And, a stock price over $20 earns the group
a spot on the famous Wall of Fame that is proudly displayed at the entrance
to the Business Hall.


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right to work to find the best team. I was very serious
about my responsibility
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to show the 'young and inexperienced' students how to run a business.after all, I
had one whole year of real life experience under my belt. I got busy recruiting the
best and the brightest among my co-workers. I was even able to recruit
several members of management to join the team. I believed that we had a
dream team full of experts in the critical functional areas. We were motivated to
win and ready to get to work. Surely, we would be able to earn our place on the
Wall of Fame.

A few weeks later, something really huge happened at the service organization.
Our CEO called an unexpected meeting and announced that we were being
acquired by a large public company. Our new parent company had big plans for
our service organization, and we were all about to get very busy. We had already
made a commitment to the college so, in spit of our time constraints, over next
couple of weeks our alumni group spent some time together over a few lunches to
discuss the project. Our vision was that our airline would have the highest stock
price at the end of the semester. Beyond that, we didnt really discuss how we
were going to do it. As things got busier for each of us, we ended up working
individually on the project making the decisions in our functional areas that each
of us thought would result in the highest stock price. As it turns out, the decisions
that we were making individually were working against each other. One of us
started entering markets that catered to leisure travelers, while another launched
an initiative that catered to to business travelers. Someone invested in
purchasing more luxurious airplanes, while someone else slashed fares to attract
the more price-conscious passengers. Our disjointed methodology caught up
with us quickly, and at the end of the semester our stock price was exactly $0.81,
earning us the distinction of having the worst ending stock price of any group,
EVER.

Almost 20 years later, I have learned more than I ever imagined I could from my
experiences in the business world, and Im certain that I have volumes yet to
learn. I have worked with and studied companies who were able to articulate
their vision, create a strategy, and execute the plan to achieve the vision and
beyond. I have worked with others who fell flat, and yet others who never even
got close to their goals. Thinking back, even to this day I can draw parallels to the
real world and pull valuable lessons from my brief stint as team leader of the
alumni airline simulation group.

A companys vision lays out what it would like to achieve. Vision statements
should be aspirational and reflect the companys values and culture. But you
cant stop there. You must also create a strategy that tells everyone how the


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(Walmart),
those with service as their differentiatorBusiness
(Zappos),
and others
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value luxury (Jaguar). It is important to spend the time to figure out how the
company will differentiate itself in the marketplace. This decision will chart the
path for what strategic goals the company will set. In our airline simulation, we
could have succeeded as a leisure airline, and we could have also succeeded
catering to business travelers. What didnt work was NOT making that decision
up front. In the absence of a strategy to guide our path to success, team members
were making decisions that, in the end, undermined the well-intentioned
decisions of the other team members.

All companies need both strategic goals and financial goals. There is no doubt
that financial goals are important. Making money is what allows a company to
continue to operate and grow. Depending on where the company is in its life
cycle, it may need to generate cash to reinvest in the company, to pay off debt, to
launch a new product, to satisfy investors, etc. However, if the vision is solely tied
to financial goals, when resources inevitably become strained, focusing on the
financial goals can inadvertently cause leaders to make decisions that sacrifice the
long term success of the company for the sake of achieving shorter term financial
goals. Our airline simulation stock price wasnt a straight nose dive. Though our
trend line went south, we did have temporary spikes along the way. There were
weeks when the price would start to slip, and because we defined our vision in
terms of financial results, we made those decisions that would trigger an
immediate increase in the stock price. Ultimately, however, the upturns in price
were all short term and didnt result in sustainable success.

All companies face circumstances that are outside of their control. There are
possibilities of regulatory changes, changes in consumer behavior, new
competition, and emerging technologies, just to name a few. That doesnt mean
that companies can just bury their head in the sand and ignore the possibility of
the unexpected. Risks require responses, and responses require decisions to be
made. Most of us, from the front line to the C-suite, are knowledge workers,
those who think for a living. There was a time when most workers werent
required to make decisions about the work that they were doing. Today, however,
many of the repetitive tasks that didnt require, and actually discouraged,
independent judgement have been replaced by automation. In 1957, Peter
Drucker predicted that the most valuable asset of the 21st century institution
would be knowledge workers and their productivity. Today, we expect employees
to make the best decisions to move the company in the right direction. Arming
employees and leaders with a strategic plan that provides a framework in which
to make the right decisions is the best tool to have available when the unexpected
becomes a reality. I have no doubt that our airline simulation would have ended


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have
occurred at all. But, that was out of our control.
It also could have
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out very differently if we had a strategy map in place that facilitated more
systematic and timely decision-making, thus mitigating the impact of the event.

Our airline simulation team was ambitious, motivated and capable. Yet, all the
drive and ability in the world wont lead to sustainable success without a clear
vision and business strategy that is continuously communicated across the
organization. In other words, everyone needs to know:

There are different ways to create and manage a companys strategy. One way is
to implement a Balanced Scorecard strategic planning and management system.
The Balanced Scorecard was created by Drs. Robert Kaplan and David Norton in
the 1990s, though its roots go back many years. It began as a way to have a more
balanced view of organization performance, by looking at both non-financial and
financial measures. The concept eventually grew into a much larger strategic
planning and management system that views success from multiple perspectives
across the organization. The Balanced Scorecard provides much more than just a
method for documenting the strategy, it provides a framework for executing it.

Vision
A strategy starts with a vision. A vision statements is inspirational, memorable,
concise, clear, and easy to communicate. It should paint a picture of the future
the company wants to create. A vision statement should also incorporate the
companys values and be ambitious, yet attainable. One way to get started
creating a vision statement is to create a vision board. This exercise incorporates
brainstorming, but with visuals, to get the creative juices flowing. Ask questions
like:

Get input from customers and employees. Then, seek feedback from family,
friends, and anyone else who will listen and provide genuine feedback. In the


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Here are some real-life examples of great vision statements:

Zappos.com

In our airline simulation, had we created a vision statement, it may have read
something like this:


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In a Balanced Scorecard, objectives are key areas in which the company must
focus in order to get where it wants to go. The company can take a look at where
it is now, and where it wants to go and identify those areas in which it must focus
to get from here to there. Identifying objectives requires that leaders take a hard
look at the organization and identify strengths that it can capitalize on as well as
weaknesses that must be overcome. A good place to start is with a SWOT
analysis. Objectives should be grouped into various perspectives, and objectives
should be aligned with the other perspectives. Typically, the perspectives are:

Employee Perspective
Starting with the foundation, the employee perspective, ask yourself How will
we continue to learn and grow? For example, we could have named the
following employee perspective objectives in our airline simulation:

Internal Process Perspective

From the employee perspective, we move up to the internal process perspective.
Here, ask yourself At which processes must we excel in order to succeed?.
Think of the activities and processes from end to end. Examples of objectives in
the internal process perspective are:


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Customer Perspective
For this perspective, ask the question What does our success look like from our
customers perspective. Perhaps, the answer to that is that the customers are
consistently able to use travel time to increase productivity or that the customer
perceives the value as greater than the price. From those answers, you can pull
the following objectives:

Financial Perspective
Finally, when you reach the financial perspective, ask "What does financial
success look like to our shareholders?. Depending on where the business is in its
lifecycle, financial goals may be different. For example, companies in a startup or
heavy growth phase usually need funds to reinvest, so the financial goals may be


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be more concerned with return for investors. Financial
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include:

The visual representation of the objectives grouped by perspective is a strategy

map. Collectively, the objectives tell the story of the companys strategy and let
everyone know how the company plans to achieve the vision. In general,
improving objectives in the employee perspective enables improvement in
objectives in the internal process perspective, which then leads to better
performance in the customer and financial perspective objectives.


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Measures
Measures are key performance indicators that tell the company whether the
objectives are moving in the right direction. Measures can be leading indicators
or lagging indicators. Lagging indicators are the KPIs that follow an event and
report on a past event. For example, net income is a lagging indicator that
reports financial results for a prior period. Leading indicators, on the other hand,
are KPIs that predict future events. These are measures like employee
engagement. Higher levels of employee engagement drive improvements in
operational results across the rest of the organization. Measures in the financial
perspective will most likely be entirely lagging indicators. As you move down
through the scorecard to the employee perspective, the measures will consist
primarily of leading indicators.


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Initiatives
Finally, initiatives are the projects or activities that are implemented to move the
objectives forward. It is with this step that strategy is truly translated to action.
Giving people projects or tasks that are associated with objectives that directly
lead to the vision allows people to see how their efforts contribute to the
companys success in achieving its vision.

_______________________________________________________

It has been said that a failure is a success if you learn from it. I have definitely
learned from my airline simulation experience and many, many others along the
way. One such lesson is that a team of engaged employees is a critical success
factor that can drive sustainable success, but they must have a framework in
which to make decisions. The Balanced Scorecard strategic planning and
management system is one way in which companies can communicate the vision
and story of the strategy in the form on a strategy map. A Balanced Scorecard can
take many months to implement and requires commitment from those at the top.
Leaders should have an open mind and be ready to embark on an exercise of
organizational self-discovery. Once successfully implemented, however, the
Balanced Scorecard can serve as a much needed pathway to success in achieving
the company's vision.

Jennifer Eversole, CPA is a Knowledge

Enthusiast and Co-Founder of
Management Stack.

"Knowledge inspires ideas. Ideas inspire innovation. Innovation inspires

achievement. Achievement inspires happiness." - Jennifer Eversole, CPA

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Mark Rutledge
Well
done Jennifer, great read!
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3 days ago

Jennifer Eversole

AUTHOR

Thanks, Mark. I'm glad you enjoyed it!

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Why I Left Management Consulting to Start a

Philosophy Company

When I was in graduate school studying philosophy, our university bookstore
moved locations. Amidst the chaos of the move, the store set up makeshift
sections and stacked books like Jenga pieces between partially constructed
wooden shelves. After carefully navigating toward the philosophy section (usually
easy to identify due to the absence of living souls), I was immediately presented
with one of the most profound sentences I had ever read. Undoubtedly penned by


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I immediately snapped a picture of the sign that has remained as my phones

wallpaper, even several years later when working as a management consultant.
One day at work, the phrase got me thinking about the nature of consulting. We
use mathematics to help businesses address complex problems. Businesses
struggle each day with tremendous uncertainty as they are routinely confronted
with the unknown. They call upon hard calculations to predict end results.
History has shown, however, that mathematics alone cannot predict the success
or failure of companies.

When studying for consulting case interviews, one inevitably reads about AT&Ts
cell phone mishap, and the details came rushing back to me. In the early 1980s,
AT&T turned to management consultants to decide whether or not they should
enter into the cell phone market. Using mathematical forecasts, the consultants
anticipated cell phones being a niche market and not one AT&T should waste its
time with. Like the Digital Equipment Corporation (DEC) of the 1960s, who
wrongly predicted that there would never be a demand for personal computers,
AT&T miscalculated one of the most important technological and commercial
innovations of our time. This was due to their exclusive reliance on mathematics.
Mathematics tells us how to build a phone but it struggles to tell us what a phone
is and why somebody would pay money for it. In other words, mathematics ends.

I then began to explore alternative approaches to solving complex business

challenges and reached the same conclusion as the book store clerk: when
mathematics ends, philosophy begins. There are a host of organizations that
assist businesses in their answering of questions that begin with how, and I was
part of one. But I struggled to find an organization that helps companies engage
with equally important questions that extend beyond logistics. Given the rapid
increase of globalization and the exponentially faster development of technology,
businesses will need both mathematics and philosophy to adapt and thrive in the
21st century. Had any manager at AT&T read the DEC case study coupled with
the works of Jules Verne, for example, perhaps AT&T would have anticipated our
collective fascination with futuristic technology.

So, armed with this knowledge, I left management consulting and partnered with
Dr. David Brendel, a pioneer in the neurohumanities space. Together, we formed
a company that uses the humanities and cognitive science to help organizations
operate more effectively. We use philosophical training to build high-performing
cultures and, with the help of Dr. Paul Zak, we use mathematics to measure the
very real effects of our training. Our recipe for creating and sustaining such highperforming cultures is the collective enhancement of skills embodied within
Theory of Mind.


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in the
minds of other people; its synonyms being empathy
and emotional
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intelligence. Possessing advanced Theory of Mind skills means being able to
conceptualize what others think and feel; to form hypotheses about why others
act as they do; and to appreciate complex emotional and behavioral dynamics in
groups. It often leads to increased levels of strategic thinking, collaboration,
leadership, and trust within organizations. Businesses are starting to recognize
the incredible importance of Theory of Mind in professional settings; so much so,
global executives recently agreed these skills are the most critical for professional
success.

Recent research also suggests that the most effective way to develop and further
enhance ones Theory of Mind is to read and discuss great humanities texts.
(Now, thanks to the people who didnt study philosophy, the neuroscientists, I
can finally explain to my parents why I did). The humanities - of which
philosophy is a part, along with literature, history, art, and music - are broadly
characterized as the study of human experience and culture. Effectively, they
serve as case studies, much like the cases I pored over when interviewing to
become a management consultant. However, instead of evaluating the
mathematics of AT&Ts cell phone miscalculation, the humanities delve a bit
deeper, ultimately developing superior interpersonal and analytic skills within the
reader, far more so than the calculative case studies of business school. The
humanities help us see the bigger - and often more complex - picture. As written
in the Harvard Business Review: [Business] knowledge can be acquired in two
weeks...People trained in the humanities... have learned to play with big concepts,
and to apply new ways of thinking to difficult problems that cant be analyzed in
conventional ways.

As more and more businesses start recognizing the prosperity enjoyed by

companies that leverage both mathematics and philosophy, they will see that
possessing the ability to understand what is going on in the minds of other people
uniquely positions them for future success. Professionals will now be able to
augment mathematical calculation with the cognitive calculations found within
the likes of Plato, Shakespeare, Austen, Verne, and Sun Tzu. Some leaders are
ahead of the curve. Jack Bogle, founder of Vanguard, often relied upon poetry for
guidance when building his company. He told me during a recent phone call that
Shelleys Ozymandias remains on his desk to this day.

And that is why I left management consulting to start a philosophy company: to

help those who have not yet leveraged the power of the humanities to secure the
continued success of their organization in our globalized, highly technical
economy.


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Dorothy Moyta, AIA, NCARB, Financial Branding

"Theory of Mind is broadly
defined as the capacity to understand what is going on in the minds of other
people; its synonyms being empathy and emotional intelligence. Possessing
advanced Theory of Mind skills means being able to conceptualize what
others
think and feel; to form hypotheses about why others act as they do; and to
appreciate complex emotional and behavioral dynamics in groups."
Absolutely
essential to success in any business or personal relationship, but often
terribly lacking in today's selfish and hurried world. We need to get this
back to create a better society going forward.
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1 day ago

Gitanjali Ranawat, Kirk Rhoads, Thembinkosi Mkhize MBL, +2

Kevin Kemper
emotional intelligence; cute name. MOST of
us by desire, keep emotion out of our thinking. IF we incluidedit,
we
would think about Poor Suzy and change an entire company
because of it
instead of examining the results of the entire processes used.
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1 hour ago

Kirk Rhoads
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Effective Leaders Know the Science Behind Their

Behavior

Lynn had dreaded this meeting with her team. Frowning, she looked around the
conference table and said, Ive got bad news. Upper management told me this
teams performance is unacceptable. We have to pull up our numbers by the end
of this quarter, or heads will roll. Ive decided to make major changes. First, all
vacations for the rest of the quarter are cancelled. I expect each of you to be here
focused on work. Second, you will meet your weekly goals, no matter how many
hours it takes.

Whatever you think of the content of Lynns message to her team, its clear that
how she delivered it made a bad situation worse. Missing from Lynns delivery
were use of the self-awareness, self-management, and empathy that are key to
emotional intelligence. During the Brainpower webcasts, my colleague Daniel
Siegel and I shared with viewers many of the research studies weve used as the
basis of our work with emotional intelligence and Mindsight.

If Lynn had understood and taken to heart some of that science, she could have
handled the meeting more skillfully.

If I were Lynns coach, here are a few studies I would have shared with
her for how she could apply their findings.

When Lynn walked into her meeting upset, she was participating in something
called emotional contagion. Whenever people interact, our brains and bodies
react to the feelings of those around us. Marco Iacoboni is a colleague of Dr.
Siegels at the University of California, Los Angeles who studies neural circuitry
like the mirror neuron system that operates in emotional contagion. Those
systems work automatically, instantly, unconsciously, and out of our intentional
control.

Andrew Meltzoff at the Institute for Learning & Brain Sciences at University of
Washington also studies how people are hardwired to pick up signals from
someone else.

When it comes to spreading emotions, some people have more influence in

passing along their feelings. When there are power differences between people,
the person with the most influence is the sender of feelings. Lynn didnt realize
she was spreading her bad mood.


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Social Competency Inventory are superb ways to develop self-awareness.
Developing a mindfulness practice also can help you learn to be aware of your
emotions. Dr. Siegels Wheel of Awareness tool is a practical exercise that can
strengthen self-awareness.

Sigal Barsade, a researcher at the Wharton School of the University of

Pennsylvania, specializes in studying emotional contagion and its impact in
organizations. She suggests ways leaders can manage their emotions and create a
positive emotional culture in their teams. First on her list is to be aware of your
own mood and to change it if it isnt useful. One way to do that is to change your
facial expression. Dr. Barsade understands the facial feedback hypothesis, which
states that our facial expressions impact our emotions. Intentionally smiling leads
to feeling positive emotions.

Before leading anyone else, a leader first must manage themselves. Lynns lack of
self-management started with entering the room in a bad mood and escalated
when she blew up at her staff. Lynns outburst was a classic amygdala hijack.
The amygdala is an area in the emotional centers of the middle brain. Ive learned
about the amygdala from the research of Joseph Ledux and his colleagues at New
York University.

In my book, The Brain and Emotional Intelligence: New Insights, I said,

For Lynn to control her bad boss amygdala, she needs to build her emotional
self-management skills. And, her outburst set off a collective amygdala hijack
among her team. John Gottman is a psychologist who has done extensive


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adrenal surge caused by the amygdala. In a setting like this team meeting, even a
5- or 10-minute break to take some deep breaths and get out of the room would
help.

Also missing from Lynns handling of the bad news was any empathy for the
members of her team. By operating without empathy, she was unable to identify
with or vicariously experience what her staff members were thinking of feeling.
Jean Decety at the University of Chicago refers to three kinds of empathy.

Empathy is crucial to all forms of relationships, especially in the workplace.

Effective leaders need to exercise all three forms of empathy on a daily basis.

Tania Singer at the Max Planck Institute in Germany studies empathy and
compassion. Singer has found that something called the insula is key to emotional
empathy. The insula, a neural area important for emotional intelligence, senses
signals from our whole body. When we empathize with someone, our neurons
actually mimic within us that persons state. Singer and her colleagues have found
that empathy can be learned. They have developed training programs that are
available as a free downloadable ebook.

Brainpower: Mindsight and Emotional Intelligence in Leadership is

a collection of four streaming videos with Daniel Goleman and Daniel
Siegel.


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leadership development work.

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