Expense management isn’t only about dollars and data. In reality, a CFO’s most important role might be communicating with other managers and leaders to set goals, explore expense ratios, compare benchmarks, and delve into the factors that drive costs.
Several credit union financial leaders cited in the report note that this focus on communications runs counter to the stereotype of the CFO who hides in an office filled with ledgers, emerging at regular intervals to growl at co-workers who seek to spend money in unexpected ways.
“You can’t be the person who no one wants to see,” says Lourdes Ruano, CFO at $352 million asset SkyOne Federal Credit Union, Hawthorne, Calif. “Communication is critical. If you are unable to work with and communicate with people, you will be left out of conversations and left out of the planning. Knowing the personalities involved and how people work has helped me continually be involved in helping set the direction of the credit union.”
It’s highly valuable to earn a reputation as someone who is willing to work with departments and explain the financial implications of decisions. The CFO’s approach should be weighted toward collaboration, rather than sending a message of rigid control.
“The CFO must be willing to get involved, beyond just taking care of the finance area,” said Barth Eke, vice president finance/CFO at $1.2 billion asset AmeriCU Credit Union, Rome, N.Y. “The CFO must be willing to get involved in lending, in member services, in compliance issues, and all kinds of activities. When you wear that many hats, that’s what makes the difference.”
CFOs say financial goals are easier to communicate when they are tied to the credit union’s mission and values. Kenneth Heydt, finance manager/controller at $1 billion asset Utilities Employees Credit Union, Reading, Pa., says using a “virtual model” without branches keeps costs low and allows the credit union to pay members dividend rates that are consistently higher than those of other financial institutions.
“To accomplish that, we have to focus on maintaining a low-cost operating model,” Heydt says. “That is almost woven into the fabric here. Top to bottom, every employee knows it, works at it, and contributes to maintain it.”
Rallying support across the credit union is vital for reinforcing messages about managing costs and resources. These experts say the CFO should never be the lone voice on this topic. Instead, leaders at all levels should be on the same page, continually reinforcing the importance of expense management throughout the operation.
Communication failures at the top undermine a credit union’s ability to improve operations and generate revenue, CFOs say.
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