Special Report: Knowledge of CPO role is FD power

Even if we’re talking up the idea of an exit from technical recession in 2010, most of us will spend the year working to numbers conjured up by the effects of a torrid 2009 and planning along those lines.

The challenge for finance directors in 2010 is to manage that against being ready – financially and strategically – to take advantage of any opportunities for growth that arise.

That means arming the finance function with the right sort of information on what money is leaving the business and why, as well as what is coming in and from where, where the business should try to stimulate growth and where it might yet withstand slimming down.

If that sounds like a moot point – something you already do automatically – then you may be doing two jobs at once: the FD job and that of the chief performance officer (CPO).

Exclusive research undertaken by Financial Director has shed light on FDs’ understanding of this emerging role. From more than 200 FDs we surveyed, 61% think they are already performing the job and if they are not, they’re very likely to be in close and regular communication with the CPO – while 76% think the FD or CFO is the natural and right person to do so as the crossover with their role is so great.

Waste not
The CPO job is about getting rid of wasteful practices and finding efficiencies, typically doing so by focusing on becoming an organisation’s measurement guru and being able to gather, analyse, report and use data to push change. That’s not far removed from a modern FD’s job, which is probably why the two are part of an ever more merged Venn diagram.

While it is a relatively nascent concept in the UK, the CPO is such a firm fixture in the US business world that US President Barack Obama appointed one for his administration in Jeffrey Zients, a well-known entrepreneur and chief executive of various businesses. Zients was put in post as CPO to find and eli minate waste and unnecessary cost from federal budgets and management, citing measurement as a cornerstone of his approach to the job.

“Most metrics are process-orientated and not outcomes-based. We do not track progress on goals that cut across agencies,” he says. “Overall, too much emphasis has been placed on producing performance information to comply with a checklist of requirements instead of using it to drive change. Federal managers and employees at all levels must use performance goals and measures to set priorities, monitor progress and diagnose problems. They need to learn how to use goals and measures to motivate the best from our workforce and our service delivery partners to achieve greater results and to allocate scarce resources wisely.”