In this special edition episode of CFO Leader, we record a live expert panel of CFO's discussing the ins and outs of managing an operating plan. We cover three main areas of discussion:
Part 1: Operating Plan Foundation (15 minutes)
- Planning
- Preparation:
- What is the role of the CFO vs other executives in the operating plan process? (Kevin McKenzie)
- How do you evaluate the effectiveness of your prior year’s operating plan? (Elliot Smith)
- Relationship between the Operating Plan, Forecast and Fundraise Strategy (Ray Langhaim)
- How to determine the appropriate amount of complexity for your operating plan? (Kevin McKenzie)
- What is the timeline for your Operating Plan Timing, from Start to Board Approval? (Elliot Smith)
- Rolling Forecast vs a Fixed Plan? Why choose one or another? (Ray Langhaim)
- Architecture
- Bottom-Up vs. Top Down operating plan architecture. Why choose one over the other? (Kevin McKenzie)
- Macro vs Micro - What is the appropriate amount of detail for the operating plan? (Elliot Smith)
- Securing Approval/Reviewing
- How do you move from department budgetary wants to needs? (Ray Langhaim)
- How should the CFO think about Identifying/Communicating Risks to the executive team/board as pertains to the plan? (Kevin McKenzie)
Part 2: Managing the Operating Plan (15 min)
- Once you have a board-approved plan, Now what? (Elliot Smith)
- Processes to manage/keep up with the plan?
- Critical items to be monitoring?
- How should the CFO deal and communicate assumption errors & other variances (Ray Langhaim)
- How to deal with unexpected changes in the operating plan? (Kevin McKenzie)
- How should the CFO deal with underperforming departments? (Elliot Smith)
- How to manage executives that aren’t bought into the operating plan? (Ray Langhaim)
- Scenarios
- We Exceed the plan (Kevin McKenzie)
- What to look out for?
- When to formally adjust the operating plan?
- Problems that unexpected revenue growth creates
Part 3: The Wartime CFO - Managing a company turnaround (15 min)
- Talk about mentality change between peacetime CFO and Wartime CFO (Elliot Smith)
- How do you think/act differently?
- What processes procedures do you put in place?
- Managing the board and executives during Wartime, what are best practices (Ray Langhaim)
- Cutting Budgets/Headcount
- Setting up decision frameworks for action: & making the hard calls : (Kevin McKenzie)
- Cutting Budget
- Canceling initiatives
- Layoffs
- Tips for taking the emotion out of the decision (Elliot Smith)
