How the CFO received triple-digit ROI
By Rick Weaver
This is the story of the Chief Financial Officer at a farming mid-western farming co-op. From a spreadsheet point of
view she was excellent. She understood future forecasting, money at present and future value, and fiduciary
responsibilities. For the most part she was excellent at her job. Yet there was one little thing that aggravated her
boss -- she gave away a lot of money. While many managers would terminate an employee like this, leadership
dictates a different course. Leaders find root causes of employee failures and then find ways to redirect them so
each employee is engaged in the organization's goals.
The co-op used very specific activity-based costing for its charges. Competitors rolled some of these charges into
general service fees, giving the impression these activities were free. At face-to-face meetings the farmers would
object to these charges, citing that other co-ops did not charge them. The CFO would immediately reverse the
charges, thereby eroding the bottom-line.
This seemed inconceivable, but as they say on television's CSI, “Trust the evidence.”
A careful review of each trait identified by the assessment revealed nothing until a comparison of multiple traits
uncovered an obvious solution. In the farm country of the Great American Prairie people learn to be hospitable and
to play by the rules. This CFO had learned these lessons well. When someone claimed the charges were unfair, she
did the hospitable thing by reversing the charges. However the assessment also pointed out she had a strong sense
of compliance. In other words, she would not break the rules
Her coach intervened and saved her job. He redirected her thoughts by getting her to view review reversal requests
as a matter of compliance, not hospitality. She agreed to give it a try. Surprisingly, it had an immediate and complete
impact on the way she perceived reversal requests.
As this is being written it has been more than two years since the assessment was reviewed. The CFO remains in her
position and has reversed just three charges – which were the result of input errors. Not only has the co-op has
realized a triple digit return on their investment, they escaped the cost of hiring and training a new CFO.