Saturday, July 21, 2012

Triangulating Mission and Vision Using Mindmaps

An organization’s mission and vision requires periodic review for a number of reasons:
·         First, things change. Business does not occur in a vacuum. Your customers are not doing things exactly the same way they were last year and their needs will have evolved. The same can be said for your competitors, your employees, and you!
·         Second, we tend to get wrapped up in the day to day. The process of “getting the beer out the door” or “making the sausage” takes priority in an operating entity, and time for reflection, introspection, and “assessing the view from the top of the mountain” is hard to find.
·         Third, you have spent additional time “simmering”. You have come up with relevant thoughts and ideas about your mission and vision that occurred to you upon awaking from sleep, or in the shower, or en route to work, or in conversations with peers, colleagues, etc.  
This week marks the 1 year anniversary of Treasury Café, and as our first post dealt with the vision of the finance function, this seems like a great time to revisit.
What are some steps we can take to help us determine what this vision is?

Determine What Finance is Responsible For
A vision needs to reinforce the mission of the organization, where we can define “mission” as a statement that answers the question “why do we exist?”
One way to develop insights about this is to think about what the finance group does within an organization, as the success of any vision will depend on its ability to “further the cause” of the mission. Assuming that what our finance group does in some way fulfills its mission, examining these responsibilities can help us glean insights into what needs to be incorporated into our vision.
While this activity will be somewhat unique to our own particular situation, we can supplement this with the vast wealth of books, articles, blog posts, whitepapers, etc. about the roles and responsibilities of finance in the organization.   

Triangulate for the Essential Activity
With this treasure trove of information, we can analyze it for common themes and topics. The advantage to this approach is we focus in on what is generally agreed versus the particularities of one information source. This process is called “triangulation”.
The following tables shows a listing of CFO roles and responsibilities from 7 separate sources.
Maintain Records
Trusting the Numbers – ensuring business decisions are grounded in sound financial criteria
Budgeting and Strategic Planning

Financial Strategy
Providing Insight – analysis to support CEO and other senior managers
Compliance: Tax, Regulatory, Legal

Investment Management
Functional Services
Getting Your house in Order – Leading key initiatives in finance that support overall strategic goals
Risk Management

Functional Systems & Practices
Funding Organizational Strategy – enabling and executing strategy set
Communications: Board, Investors Creditors, Ratings Agencies

Cost Planning and Budgeting
Strategic Planning
Development of Business Strategy – defining the overall strategy for the organization
Performance Evaluation

Financial Operations
Strategic Change
Communication to External marketplace – Representing the organization’s progress on strategic goals to external stakeholders
LT and ST Investments

Performance Management

Cap Structure / Cost of Capital

Financial Reporting

Cost Accounting / Cost Management

Creating Value

Catalyst – stimulate behaviors to achieve strategic and financial objectives - Execution
Supporting Value Decisions

Strategist – provide leadership in determining strategic business direction and align financial strategies; Performance
Protecting Value

Operator – Fulfill the finance organization’s responsibilities; Efficient

Steward – protect and preserve the assets of the corporation; Control

It can be somewhat confusing to examine this list as it is shown. Some common items might be on separate lines (such as “Custodian” under Ghosh and “Steward” under Deloitte), or some items might be subsets of others (such as “Communication to External Marketplace” under Ernst & Young and the broader “Communications”, which includes internal constituents such as the Board, under Fabiozzi).
One way to manage this process is to use the technique of mind-mapping. Figure A shows the items in the tables in “mind-map” form.

Figure A
Pick an Organizing Theme and Rearrange
Our objective in triangulation is to tease out the common themes. Ideally, we want this listing to be as small as possible so that it’s easy to remember. For instance, Ghosh breaks things down into three activities that all start with the letter “C” – Custodian, Comment and Counsel. This makes things easy to remember and recall.
So using his framework as the initial starting point, we rearrange the tiles in the mind map and examine what we’ve got. This is shown in Figure B.
When we observe this figure, we can note that there are 14 items that remain uncategorized. Several of these are “groupable” amongst themselves, such as financing and operations.
Figure B

Using the mind-map is an iterative process that can follow many paths. From Figure B, one path we could follow is to re-create the activities using a different construct. If we followed this path, the next one I would try would be Deloitte, as that has only 4 categories, so the “small as possible” objective would be obtained.
Another approach could be to just see how many categories we can fit the unassigned variables into and add to these topics to the Ghosh ones.
Following the rearrange by Deloitte path we arrive at Figure C.
Figure C

The “Aha” Moment
In reviewing this, I was not very satisfied with the “Catalyst” category. What do I do with this? And what do I do about the remaining “Unassigned” categories?
Reviewing the Catalyst definition, which involved “stimulate behaviors”, I started looking at the other categories to see whether things might be moved over, or whether I could subsume this category into one of them.
One of the facets that the Catalyst and Strategist roles have with each other is that they both involve collaboration and interpersonal exchange with others in the business. We do not create strategy in a vacuum.  We do it through discussions, in meetings, on retreats, etc. with others. When acting as a catalyst, we are impacting others through our interactions. They both are things we do with others.
The Steward and Operator categories, on the other hand, involve handling information and creating reports out of it. The custodian aspects are things we undertake for the good of the company but do not generally involve others within the firm. In other words, these are things we do for others.
And this was my “aha”, that essentially we can classify our role into two very broad categories:
·         things we do with people, and
·         things we do for people.
Comparing this to the vision from the first Treasury Café post:
·         To serve as an approachable and dependable partner
·         To inspire in others confidence in our abilities, knowledge, and expertise
The first bullet is a “with people” objective. You cannot partner in a vacuum. The second bullet is applicable to both the “with people” and “for people” functions.
While this “aha” moment may not be earth shattering or of a change the world variety, the process we have gone through has served the purpose of enriching the original perspective, adding a layer of understanding to it.

Figure D shows the final mindmap (link is to final map):
Figure D

Key Takeaways
Even if a revisit of your vision and mission does not result in dramatic change, it can enhance and deepen your understanding of the current one.
·         How would you characterize the mission of the finance organization?

Add to the discussion with your thoughts, comments, questions and feedback! Please share Treasury Café with others. Thank you!

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