Management

Communication Key in Controlling Expenses

Explaining the financial implications of decisions enhances your ability to cut costs, CFOs say.

April 17, 2013
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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.

That's the word from "A New Era in Expense Management," a white paper from the CUNA CFO Council.

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.

White papers are free for Council members; $50 for nonmembers. Visit the CUNA CFO Council website for more information.

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Great article! Unfortunately, most employees don’t feel valued or appreciated by their supervisors or employers. In fact, research has shown that the predominant reason team members quit their jobs is because they don’t feel valued. This is in spite of the fact that employee recognition programs have proliferated in the workplace – over 90% of all organizations in the U.S. has some form of employee recognition activities in place. But most employee recognition programs are viewed with skepticism and cynicism – because they aren’t viewed as being genuine in their communication of appreciation. Getting the “employee of the month” award, receiving a certificate of recognition, or a “Way to go, team!” email just don’t get the job done. How do you communicate authentic appreciation? We have found people have different ways that they want to be shown appreciation, and if you don’t communicate in the language of appreciation important to them, you essentially “miss the mark”. Additionally, employees need to receive recognition more than once a year at their performance review. Otherwise, they view the praise as “going through the motions”. A third component of authentic appreciation is that the communication has to be about them personally – not the department, not their group, but something they did. Finally, they have to believe that you mean what you say. How you treat them has to match the words you use. If you are not sure how your team members want to be shown appreciation, the Motivating By Appreciation Inventory (www.appreciationatwork.com/assess) will identify the language of appreciation and specific actions preferred by each employee. You then can create a group profile for your team, so everyone knows how to encourage one another. Remember, employees want to know that they are valued for what they contribute to the success of the organization. And communicating authentic appreciation in the ways they desire it can make the difference between keeping your quality team members or having a negative work environment that everyone wants to leave. Paul White, Ph.D., is the co-author of The 5 Languages of Appreciation in the Workplace with Dr. Gary Chapman.

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