# Gary McGaghey Explains How CFOs Can Strengthen Decision-Making Processes and Reimagine the Finance Model Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-03-15 Category: FINANCE Category URL: https://financedigest.com/category/finance Meta Title: Strategic Moves for Finance Leaders to Boost Effectiveness Meta Description: Learn how finance leaders can achieve greater real-time insights and efficiency by adopting advanced analytics and reimagining their operating models. URL: https://financedigest.com/gary-mcgaghey-explains-how-cfos-can-strengthen-decision-making-processes-and-reimagine-the-finance-modelhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/istock-539437312-1736815964108-compressed.jpg) _Two strategic moves for finance leaders to reap the results they need._ [Finance](https://gary-mcgaghey.medium.com/) teams have reduced their costs by nearly 30% over the past 10 years. Now, many of these finance teams are [working towards higher levels of efficiency](https://www.deloitte.co.uk/makeconnections/pdf/presentations2014/plenary-building-an-effective-performance-management-framework.pdf). To help finance leaders achieve improved effectiveness, the Divisional and Group CFO Gary McGaghey explains that successful finance departments must know where to lower costs strategically and how to work towards value-added activities. He emphasises that finance executives who want to achieve the next frontier in financial effectiveness can adopt two moves to deliver greater real-time insights, accelerate workflows and decision-making, and reduce human errors and biases. - First, they can **strengthen decision-making processes** by adopting advanced analytics, debiasing, and data visualisation techniques. - Second, they can **reimagine the finance operating model** to foster new capabilities and skillsets. ## Strategy 1: Strengthen Decision-Making Processes Many [finance departments use advanced analytical techniques to overcome business challenges](https://www.financedigest.com/from-fragmented-systems-to-unified-cpm-unicredit-prepares-for-todays-finance-challenges.html "FROM FRAGMENTED SYSTEMS TO UNIFIED CPM – UNICREDIT PREPARES FOR TODAY’S FINANCE CHALLENGES") (such as improving the accuracy of cash flow forecasts) more frequently than ever before. For example, a North American consumer goods company is building a [forecasting tool to gather](https://www.financedigest.com/stocks-buoyant-while-darker-forecasts-gather-on-the-horizon.html "Stocks buoyant while darker forecasts gather on the horizon") and evaluate data on variables like macroeconomic conditions, demographics, and geographic factors. With this information, CFOs can quickly alter [pricing decisions](https://www.financedigest.com/uks-ofcom-delays-bt-fibre-pricing-decision-after-ceo-remarks.html "UK’s Ofcom delays BT fibre pricing decision after CEO remarks") when required. Savvy analytical techniques aside, the [finance department is also responsible for framing discussions on how to improve](https://www.financedigest.com/5-ways-to-improve-your-business-finances.html "5 Ways to Improve Your Business Finances") company performance. Gary McGaghey explains that to manage these discussions effectively, [finance teams need](https://www.financedigest.com/7-finance-career-options-to-consider-and-what-you-need-to-know-about-each.html "7 Finance Career Options to Consider and What You Need to Know About Each") to provide: - **Clearer** insights, which they can achieve by communicating transparently about performance, noting shortfalls against predicted outcomes, and paying attention to the factors and context that inform these gaps. - **Faster** insights, which enable management to understand recent performance and make decisions to shift the trajectory quickly. - **Richer** insights based on robust data sets from a multitude of sources. These sources should provide wider perspectives than those that only consider [internal financial](https://www.financedigest.com/the-hidden-financial-woes-of-international-students-heading-for-the-uk.html "The Hidden Financial Woes of International Students Heading for the UK") data. For example, CFOs can contextualise profit projections against overall market performance. When [finance departments base insights on multifactor data](https://www.financedigest.com/theres-nothing-artificial-about-the-role-of-ai-and-data-in-the-finance-industry.html "There’s nothing artificial about the role of AI and data in the finance industry ") sets that comprise both external and internal data sources, they can gain a more authentic view of likely performance outcomes. Then, they can minimise the risk of shocks that could render projections inaccurate. When finance teams simulate multiple scenarios, they put themselves in stronger positions to cope with unexpected events like the COVID-19 pandemic. ### Improving Insight Generation Through Training On top of this, [finance leaders](https://ideamensch.com/gary-mcgaghey/) can improve insight generation by stepping up training initiatives that surround data visualisation, debiasing, and analytical techniques and technologies. In markets where these tools are new, the tools offer a high potential [competitive advantage](https://www.financedigest.com/turning-big-data-compliance-into-a-competitive-advantage.html "TURNING ‘BIG DATA’ COMPLIANCE INTO A COMPETITIVE ADVANTAGE") but also require a lot of commitment. [Finance leaders](https://www.financedigest.com/how-finance-leaders-can-turn-the-inflation-challenge-into-opportunity.html "How finance leaders can turn the inflation challenge into opportunity") can draw inspiration from other sectors on how to upskill staff. For example, a telecom company identified that approximately [half of its back-office staff lacked the technical skills they needed to reach their goals and that 42% were in roles that likely wouldn’t exist in 10 years](https://www.financedigest.com/an-apple-a-year-half-of-iphone-users-will-upgrade-to-the-iphone-7.html "AN APPLE A YEAR: HALF OF IPHONE USERS WILL UPGRADE TO THE IPHONE 7"). So, the [company asked employees](https://www.financedigest.com/why-more-companies-are-asking-new-employees-to-commence-employment-before-christmas.html "Why more companies are asking new employees to commence employment BEFORE Christmas.") to assess their capability gaps and the skills they needed to learn. Within a year, the company was able to fill 40% of new jobs with internal candidates. Meanwhile, [companies can increase the quality and stature](https://www.europeanbusinessreview.com/gary-mcgaghey-shares-four-strategies-to-help-cfos-thrive-in-the-private-equity-space/) of their senior finance business partnering roles by matching the highest performers to these essential roles. These individuals [need experience and a strong perspective so they can delve into the causes of underperformance and push back](https://www.financedigest.com/if-the-nation-backs-fintech-we-need-to-address-a-few-things.html "If the nation backs FinTech, we need to address a few things") against financial suggestions that are overly optimistic or unnecessarily conservative. ## Strategy 2: Reimagine the Finance Operating Model Many finance departments are embracing operating models with new capabilities so staff can adjust to their work quickly and dynamically and prioritise their most pressing tasks. To cut down on the effort required in operational tasks, a strong operating model starts from a leaner core and offers new data management practices, integration with several related technologies, tighter data standards, and enhanced automation. Implementing such a model involves the [following changes](https://www.financedigest.com/ubs-makes-changes-to-buyback-programme-following-credit-suisse-takeover.html "UBS makes changes to buyback programme following Credit Suisse takeover"). - **Breaking traditional hierarchies into flat networks of teams**. The network [model makes it possible for finance business](https://www.financedigest.com/cfos-its-time-to-own-the-business-model.html "CFOs: It’s time to own the business model") partners to access a shared pool of analysts, who work on specific items based on agreed-upon priorities. - **Mobilising temporary teams so they can deliver deeper insights into business challenges**. Creating this capacity follows agile working principles like instituting sprints to identify, design, and implement analyses that examine business challenges. - **Enriching the [finance department with digital](https://www.financedigest.com/how-digital-is-transforming-finance-in-2023.html "How Digital Is Transforming Finance in 2023") skills**. For example, staff may learn how to use [analytics software](https://www.financedigest.com/how-to-use-momentum-analytics-software-to-improve-portfolio-performance.html "How to use momentum analytics software to improve portfolio performance"), translate business data into actionable insights, or programme bot algorithms. - **Setting up a network of savvy finance experts who have the stature to engage company leaders as peers**. When CFOs strengthen job rotations within the finance department and between this department and the wider company, they can develop a cadre of skilled professionals who can [move seamlessly throughout the business](https://www.financedigest.com/7-factors-to-consider-before-your-business-moves-to-a-subscription-model.html "7 Factors to Consider Before Your Business Moves to a Subscription Model"). For example, one automotive company requires its executives to work in at least two divisions, two [finance functions](https://www.financedigest.com/why-do-modern-finance-functions-strive-for-automation.html "WHY DO MODERN FINANCE FUNCTIONS STRIVE FOR AUTOMATION?"), and two countries before taking on a senior role. - **Boosting the [finance team’s skills by developing](https://www.financedigest.com/what-skills-and-areas-of-knowledge-should-finance-teams-develop-during-2023.html "What Skills and Areas of Knowledge Should Finance Teams Develop During 2023? ") a demanding but clear competency matrix**. A detailed set of standards can help teams ground discussions about finance talent in objective criteria. This can make it easier for managers to choose from capability-building actions to support career progression. For example, advanced staff may spend at least [10% of their time](https://www.financedigest.com/britains-purplebricks-to-cut-more-than-10-of-jobs-the-times.html "Britain’s Purplebricks to cut more than 10% of jobs – The Times") training other staff. - **Developing informal and formal skill development incentives**. For example, CFOs can offer incentives for knowledge and capability development, set targets for internal promotions to finance leader positions, and celebrate the accomplishments of managers who successfully coach their teams. One example of a company that brought these steps together is a global consumer goods manufacturer that crafted a performance management system that involved a selection of [key performance indicators](https://www.crunchbase.com/person/gary-mcgaghey) (KPIs), each linked to the company’s overall value creation roadmap and cascaded to each layer of the management structure. After employing these measures in several business and geographic entities, the company launched a data lake to populate information. The data lake supported real-time dashboards and enabled drill-down capability. Overall, the initiative cut down the time that the FP&A team dedicated to data capture, presentation, and manipulation by 65%. ## Delivering More Than Financial Skills Gary McGaghey concludes by emphasising that the [finance leaders who are redefining effectiveness offer much more than core financial](https://www.financedigest.com/g7-finance-leaders-pledge-financial-stability-supply-chain-diversity.html "G7 finance leaders pledge financial stability, supply chain diversity") skills. Instead, these [CFOs guide the overall functioning of their companies every day](https://www.financedigest.com/who-is-the-modern-day-cfo.html "WHO IS THE MODERN DAY CFO?"). You can implement the strategies covered here to capture more insights, [improve your finance](https://www.financedigest.com/what-needs-to-happen-to-improve-the-landscape-for-smes-trying-to-access-finance-options-in-the-uk.html "What needs to happen to improve the landscape for SMEs trying to access finance options in the UK") team’s performance, and plan the capabilities you need to support dynamic decision-making over the next decade. [Learn more from Gary McGaghey](https://intouchnetworks.com/en-gb/members/6821). ## [About Gary McGaghey](https://www.garymcgaghey.co.uk/) As the Group [CFO of the €1.3 billion end-to-end marketing production and business services](https://www.financedigest.com/service-the-cfo-why-context-is-worth-80-iq-points.html "Service & The CFO: Why Context Is Worth 80 IQ Points") group Williams Lea Tag, Gary McGaghey oversees the private equity company’s financial plans, expands the value of its holdings, and manages investment-related decision-making processes. He is also the non-executive director of Fitmedia UK, which develops children’s fitness analysis and testing solutions. Before taking on these roles, Gary McGaghey worked in a variety of non-executive and statutory executive director roles for privately owned and listed companies. **This is a Sponsored Feature.** --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---