What Do You Do When Your CEO Says No?
Mar 24, 2015
I was having lunch the other day with a CFO who is very versed in cost accounting. He spoke about some of the projects he would like to implement in order to create costing standards. He said his major delay is the fact that the CEO does not understand the need.
Some of the projects he would like to institute include: time and motion studies and analysis of cost drivers. He is concerned the information being provided is not as accurate as it could and should be.
This CFO would also prefer to hire a new cost accountant. The CEO does not feel that is necessary and has given the CFO a very small hiring budget. The CFO, of course, would like this additional staff to assist him in managing the overall costing system which would be a great benefit to the overall company.
All of these issues become frustrating points for the CFO. The CEO needs to recognize the benefits the CFO is trying to achieve, or he will lose an excellent CFO and miss out on valuable information for the business.
I asked the CFO if he had any ideas on how to convince the CEO. He said his plan is to wait and gather historical information and then present to the CEO with the quality of information available. The CFO will then show the CEO a comparison of the information they could have if he is able to complete the necessary projects. I do not disagree that this is a good idea, I think this could be very effective. However, I find it unfortunate that time would have to pass without having valuable information in order to prove a point.
I then asked this person, do you think there is anything I as a consultant could do to help? I then discussed possibly having an educational course geared towards CEOs to help them recognize the importance of costing. He thought this could be something that would work quite well. We both believe the CEO, in this case, like most scenarios, does want the best information possible. The bigger issue is the lack of understanding and appreciation for costing. If we were able to educate them, they very well may have a different outlook on costing and its benefits.
I am curious what your opinions are on the subject, and what have you done to successfully convince an otherwise uncertain CEO?
Categories: Cost Accounting