What does a CFO have to “think, say, do” to Walk the Walk in creating, sustaining and enhancing their Accounting and Finance Policy and Procedure program
What does a CFO have to “think, say, do” to Walk the Walk in creating, sustaining and enhancing their Accounting and Finance Policy and Procedure program
Think: Program vs. process or project
When you think about it, there is a difference between Program Management, Project Management and Process Management. Often CFOs are so interested in the outcome of a Policy and Procedure program that they forget to set up the Program in the first place.
Although a Program is a process and includes projects, it is different. Since the basic element is process, let’s begin there.
The word process refers to a definable, repeatable, predictable, measurable, and integratable series of tasks. For a process to be complete, it must have all these dimensions.
- Definable in that there is a specific scope encompassing the series of tasks; there is a beginning and an end. There are defined inputs, defined work activities and defined outputs. There are no tasks which remain undefined to the process. Example: G equals E plus F.
- Repeatable in that is there are consistent, recurring tasks which make up the process. To ensure consistent outcomes, each time the tasks are undertaken they are performed in the same way. There is little or no room for variation to the sequence of the tasks. Example: task E always precedes task F.
- Predictable in that once the tasks begin, consistent, comparable outcomes result. It can be computed so that when the inputs are known the outputs are expected and if the outputs are known the inputs are calculable. Example: E plus F equals G.
- Measurable in that performance measures are embedded into the process as an indicator of the predictability of the process. Example: 1E plus 1F equals 1G.
- Integratable in that processes are dependent on, connected and interact with other processes. Example: Task E encompasses tasks D and C.
The objective of the process is to ensure that each time the process is followed a definable, repeatable, predictable, measurable outcome occurs. It is difficult to isolate the process of the process from its defined outcomes. It could be said that the output proves the process.
A project is similar to a process yet different. Using the process management terms, a project is definable and measurable. You’ll notice that a project is not considered repeatable, predicable or integratable. Project Management is a discipline which begins to separately identify the management of the project from the process outcomes. A project’s scope is limited to just one pass through, one goal, one touchdown at the end. Once the outcome is delivered, the project is complete. Individual policies and procedures are projects.
The Program and the process of Program on the other hand must be clearly separated from its project outcomes. Success for each is defined and measured differently.
Think of a Program, as a “going concern entity” meaning that it requires resources in order to enable it to operate indefinitely. The outcomes of the Program may vary with some being more successful than others, however the Program continues. Like a process a Program is definable, repeatable, predictable, measurable, integratable and also includes reportable and accountable.
- Definable in that the Program as well as the Program’s projects are defined. For Accounting and Finance Policies and Procedure define the Program with a Program mandate and Charter and the Program’s defined outcomes (projects) as the Table of Contents.
- Repeatable in that the Program’s process shall be followed each time a documentation project has to be produced.
- Predictable in that regardless of the level of detail or specific information contained within documentation projects, the Program shall be executed in the say way; e.g., initiated by a process owner, managed through the draft, review and approval process then issued and communicated.
- Measurable in that separate measures and milestones shall be created for the Program as well as the individual project topics.
- Integratable in that those who initiate, review and approve documents are part of the Program’s process however reside within the functional business areas.
- Reportable to those senior executives who own and/or participate in the Program. Reports shall indentify and communicate the on the effectiveness and efficiency of the Program as well as the draft to issue status of documents.
- Accountable with defined roles and responsibilities for the Program Manager and those who support the Program such as the system administrator and those who participate at the project level such as process owner, document contact, reviewer and approver.
Just because you think it, doesn’t make it so.
Say it loud, say it often, say it proud!
Whether you know it or not, whether you intend it or not, key messages are present in the way your body language speaks to what you are thinking, the words you are saying and/or the actions you are doing or not doing.
Conscientiously create key messages which are:
- Concise – get to the point quickly and clearly
- Active – use action verbs and visual images so the message becomes memorable
- Specific and Positive – construct the message so that it is specific and directs the targeted audience / individuals as to what must / can be done
- Short – one memorable sentence or catchy phrase
Use the Program’s vision to create and deliver the key Program messages
- Imagine a company where any employee could
- locate the policy, procedure and related forms and instructions
- ensure they are following the rules and/or enter a question or request to deviate from the rules
- Imagine a company where there is a management resource center and a program to ensure Policies and Procedures are
- approved by a cross functional team
- aligned with external reporting certifications, internal controls, audits and process management
Communicate that message through developing Program measurements and reports which support that vision.
- Ask direct reports and staff to submit measures and reports to identify progress made against the vision
- Consolidate and share the reports with employees through other important communication such as: monthly conference calls, quarterly accounting and close instructions.
- Share the reports with the Board of Directors
Deliver key messages within the policy and procedure document, itself. In building the policy and procedure documents avoid debate and confusion, get the key message in a direct, concise way.
Bad Example found within a Travel and Expense policy:
It is Company policy for employees to be reimbursed according to standards and procedures developed to ensure safe and comfortable travel for all employees while traveling on company business.
When I read this statement, I thought as an employee I was entitled to travel in comfort and would be reimbursed for it.
Corrected Example
It is Company policy to reimburse employees for valid expenses that are required and necessary for business operations, approve by management and in compliance with regional limits as described within the Travel, Entertainment and Expense manual.
When beginning the document with “It is Company policy to……”, the reader knows exactly what they have to do. Don’t use conditional words such as “should”, “guidelines”. Don’t hide the policy statement within procedure narratives. Do ensure the policy statement is then expanded upon and aligns with the procedure being described.
Do Walk the Walk
Establish a Program to:
1. Identify the parameters to mandate and delegate power. I recommend establishing and communicating a Program Mandate and Charter and be ready to defend what you have mandated and those who are tasked with implementing and executing the mandate.
2. Establish and communicate the Policies to bring the Program to life; often described as the Policy for Policies. This can be as simple as issuing a document which identifies when and how a new document shall be created, issued or revised to the more complex arrangements where there is
a) a Program Charter
b) a policy to create, revise, issue
c) a template which must be used by all
d) Request to deviate from approved policies and procedures
e) Request to rescind or withdraw documents
3. Actively participate in determining the Table of Contents – chose topics which are aimed at satisfying disclosure for outward facing documents such as the 10K
4. assess the reliability of the program’s output
5. report on the health of the program as well as the status of the program’s deliverables
By taking the time and effort required to understand the walk, you will be well prepared to think, say and do the things necessary to walk the walk.
Once you have committed to investing in an Accounting and Finance Policy and Procedure Program,
- enable employees by providing the direction, framework, tools and resources required to have a successful program
- motivate them by exciting them to action with a clearly stated visual statement about the benefits of participating in the Program
- evaluate the Program and the individual project outcomes
- recognize those who have performed above and beyond to get the Program organized and keep it on track; if there is no one or nothing to recognize, analyze why and adjust course
- celebrate the Program’s success at every opportunity
Don’t hesitate; enjoy the walk, the jog, the run.
For assistance with this Program and other individual projects refer to the Accounting and Finance Policies and Procedures manual published by John Wiley and Sons and available on Amazon (see below)
Rose Hightower, Accountant, MSc, is the owner of IDEAL Consulting Solutions International, LLC, a firm specializing in consulting in implementation of internal control policy and procedure programs for companies. Bringing over 20 years experience from IBM and as a finance manager and providing service as a professor her program contains practical lessons and simple solutions for any size company. She is known as ‘The Policy Guru’ and offers advice to clients via her website www.idealpolicy.com
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