CFO Real Battle: How To Participate In Business Mode Innovation

Because of the different stages of development and cultural backgrounds, CFO's responsibilities vary widely, from the most basic bookkeeping to budget assessment, and then to strategic management, capital operation and business mode innovation. The so-called business mode refers to the integration of the internal and external factors that enable the enterprise to run in order to maximize shareholder value, so as to form an efficient and unique operation system with a unique core competitiveness and to achieve the overall solution of organizational design by providing products and services. Compared with traditional industries, the business mode of the Internet industry is particularly important. Because in the industry chain, whether customers, suppliers, competitors or business partners, there is great uncertainty, not simple production and business relations.

I once worked as a part-time CFO in a Internet Co. At the beginning of the establishment of the company, the board of directors has been discussing the most suitable business mode. Is it a platform to integrate other Internet Co in the industry or to develop business independently? The result of the discussion is the independent development of business, relying on its own growth and development, and no longer as a platform to integrate competitors. The idea is good, but the result is that competitors start developing independently after a short period of labor pains, looking for the best business mode, and getting bigger and bigger, starting to surpass the company. The company was weak in growth and lost all hope, but neither the board nor the top executives had found the way to solve the problem. Before CEO had worked hard in the internal process, even at the expense of consulting companies to sort out the process.

What I am most concerned about has been the value drivers of the industry, how the competitors are, and what problems the company has and how to improve them.

The first step is how to find problems. One way is to communicate with employees first. From the marketing department, technology department, editorial department, sales department to customer service department. What is unexpected is that many of the lower ranking employees are very clear about their thinking, but their voices have never been noticed. As a marketing assistant coming from a rival company, he thinks the company is very weak in product development and customer service. Competitors launch a new product every week and have been striving to improve the service level of VIP customers, because they know that the core value of the industry is to provide the best quality products and services for VIP customers. Competitors have launched a new product with excellent customer experience, so they are afraid that other companies in the industry will imitate it. Unfortunately, the company has not paid much attention to this product for a year, and has been concerned about optimizing the internal process of the enterprise. Company executives also have their own ideas, but the board of directors may not necessarily listen to their ideas. Besides, there are different voices within the management and lack of coordination to achieve strategic goals. mechanism 。

The second step is to combine business with financial analysis. After 20 employees. Communicate And in-depth discussions with executives, I prepared a simulation financial model of three leading companies in the industry. It is not hard to see that the top two companies in the industry are in sales, gross margins, cost structure Or net profit, far better than our company. The number one company has a profit of tens of millions of dollars, and the company is still in a state of no profit. Many weaknesses of the company have also become very clear, such as slow product renewal, lack of core products of competitors, backward and unstable systems, high turnover rate of technical personnel, inadequate customer service and high cost of VIP. In view of these weaknesses, the solutions to competitors are also gradually clear.

After communicating with the board of directors, I made the following plans with the heads of departments:

1., improve product competitiveness. The bottleneck for achieving this goal is the shortage of personnel in the company's product development department. After discussions with the director of technology and the director of personnel, the company has worked out a product development goal for the whole year, such as what products should be launched every month, and when the company can compete with competitors in products. In order to encourage employees to complete their tasks on time, we also set up a special fund to give performance bonus to project participants after each important product is launched.

2., strengthen VIP customer service, set up assessment indicators for customer service personnel, conduct regular assessment and be linked to performance.

3. cut costs, including reducing redundancies.

Finally, there must be a supervision mechanism. Market share is a measure of company competitiveness, so in addition to income and profit indicators, market share has become an important indicator of daily monitoring. Any share fluctuation must be explained, and any new product will also be linked to the market share index. After more than half a year's efforts, the company's market share has increased from 7% to 15%. The annual plan and product have been realized, and the turnover rate has also decreased a lot. It is expected that in the next few months, the company will turn a profit and become a leader in the industry.