CHIEF FINANCIAL OFFICER

Chief Financial Officer



Chief Financial Officer

CFO's role:

The CFO's role is especially critical in the development of the strategic plan. As a member of senior management, the CFO is a full partner in identifying organizational objectives and strategies to reach them. The CFO is especially important as a "reality check" for proposed strategies. The CFO also is typically responsible for volume and financial data essential to the strategic planning process. The ability to provide accurate and timely information is often the most difficult task in the strategic planning process (Kaleba, 2008).

The five major phases in developing a strategic plan are:

* Organization

* Discovery

* Visioning

* Analysis and strategy formulation

* Implementation

How does a typical community hospital with limited planning resources organize and execute a strategic planning process? Following are some successful practices that may be carried out with a hospital's assistance from a qualified consulting firm.

Project Organization Phase

The two critical elements of project organization are process management and leadership decision making. Each of these functions must be in place for a successful strategic planning process. Data collection also begins this phase (Ansoff, 1971).

Process management

Process management refers to the plan's development and how the process will be organized: data collection and analysis, visioning, development of alternative strategies, documentation, and implementation. Typically, a hospital selects one person in the organization to be responsible for the process, usually someone at a senior management level or with overall responsibility for planning, marketing, or decision support. Ideally, this person will have actual or implied authority that allows ready access to board, senior management, and medical staff. The person must be able to schedule meetings that key people will attend and collect sensitive strategic, financial, and program information. In small hospitals, the CEO or CFO often functions as the project manager. In larger organizations, the vice president for development, planning, or marketing may have this responsibility. Although staff work may be completed by others in the hospital or by outside consultants, the organization's project manager or "point person" is essential to success. A significant amount of time and effort are required by the project manager.

For example, planning, financial, or decision-support staff may estimate the growth of outpatient surgical procedures and develop projections. Review by departmental managers and medical staff may produce different estimates of growth potential based upon their knowledge of new procedures, competition, additional physician resources, or other variables. By sharing this information with both groups, revised estimates may be developed that represent a more accurate picture of the future (Kaleba, 2008).

The CFO usually bears the responsibility for maintaining financial and volume data regarding enterprisewide operations. Departmental volumes and growth projections, market share and competitive intelligence, financial history, projections, and budgets and business plans for new or developing service lines are often the purview of the CFO. Being able to provide the information in a useful format on a timely basis is mission critical.

In addition to managing their departments, developing operational and capital budgets, and ...