The Bottom Line: The planning paradox
If you missed the news...we just announced a series C funding round of $37M!! This gives us the ability to take our corporate travel software to new heights. Stay tuned for that...
In the meantime, it's business as (mostly) usual here in the Bottom Line. I've got plenty of financial content lined up for you. Dive in.
How CFOs Help Win Top Talent With the Perfect Compensation Plan
No doubt about it — with unemployment remaining low, companies are fighting over talent. The most obvious way to win this fight is to throw more money at your potential employees than other companies.
This can work, but it's expensive and can actually increase turnover (because employees will go to whoever pays them the most). According to Abacus, there are better ways to structure your comp plans to win talent. Here are their ideas:
1. Equity for all? CFOs disagree on how to disperse equity (should it go to some, or all employees?), but most agree that you should consider it. If you only give it to some employees, offer it as a reward for great work.
2. Make sure employees understand their compensation. If you are going the equity route, make sure your employees truly understand what that means. Equity can be complex. Usually there are vesting schedules, exercise prices, and fluctuating valuation to deal with. If an employee doesn't understand these things, they essentially don't know what they're being paid.
3. Creative perks attract and keep great employees. I'm not talking about ping-pong tables. I'm talking about actual perks — paying a larger percentage of health insurance, increased maternity and paternity leave, remote work opportunities, unlimited vacation, etc.
There are two more huge points that I didn't cover here. Take the jump for the full post from Abacus...
CFO Insights: Solving the Succession Paradox
Shocking stat of the day, courtesy of Deloitte: 86% of leaders think leadership succession planning is an "urgent" or "important" priority, but only 13% believed they did it well.
According to Deloitte, succession planning is especially important for finance roles since it can be one of the key differentiators between a good CFO and a great one.
So, we know it's important, and we know many companies aren't good at it. Before we get to how your company can be better at succession planning, let's cover the four approaches to it:
1. Comfortable - An informal, intuition-based approach.
2. Compliant - Structured, standardized processes that use data to make decisions.
3. Competitive - Objective-based processes are put into place to identify future leaders.
4. Centered - This approach allows for some intuition and some objectivity.
Out of those four, the best approach is the "Centered" approach, at least that's what Deloitte says. Moving toward this approach means that you have to do five things:
1. Make it worthwhile for leaders to engage in succession planning. Don't just ask them. Leading organizations incentivize their leaders.
2. Establish accountability. Who is going to be responsible for succession planning in each department? The department heads are the obvious choice, but until they know that, they might assume it's someone else's job.
3. Focus on the future. Your goal for succession planning is the future, right? To help your future leaders understand your business, give them the opportunity to broaden their exposure by working in other business areas.
There's a TON more to learn from this one:
The Hit List
A few other things I've been reading this week...
1) I know I mentioned it already, but Lola.com just raised $37M. TechCrunch has the scoop.
2) Oracle published an interesting report on the key traits of digital finance leaders.
3) What's the Chief Revenue Officer at Drift have to say about sales, role models, productivity and more? Find out in the latest Road Warrior Radio episode.
4) Speaking of succession planning? How can you actually tell if someone has true leadership potential? Inc has a few ideas.
5) AICPA drops some knowledge on how finance leaders can thrive in the digital age.
Pick of the Week
Did I mention that Lola just raised $37M? Want to see what decisions we made to get here? Click the image below or head over to https://www.lola.com/37 for a choose your own adventure experience!