Category: Business Management

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5 Challenges for America’s Businesses in a Global Market

american-flag-businessFor almost 200 years, America has enjoyed global leadership in science, commerce, and government. As a consequence, the United States has become one of history’s greatest economic powers, dominating the 19th and 20th centuries. The ability of Americans to “think outside the box,” their courage to challenge conventional thinking, and their confidence to persevere despite numerous setbacks has inspired generations and continues to change lives around the globe.
 
Leaders understand that greatness is more than building personal wealth or power, but creating products and services that improve the lives of individuals and the overall human condition. But as trade barriers between countries have fallen, leaders are faced with new challenges, and America’s preeminent status as the world’s dominant economy has been and will continue to be challenged as never before.

21st Century Challenges for America’s Businesses

There are a variety of factors that may negatively affect the competitiveness of American firms in the coming years, including three identified in McKinsey Quarterly:
 

1. Dynamism in Emerging Markets

The world has become “flatter” with the disappearance of natural and artificial borders that protected local and regional markets. As a consequence, markets are worldwide and more competitive, as economist and “New York Times” columnist Thomas L. Friedman predicted in 2005.
 
Within the next decade, China will be home to more large companies than either the United States or Europe, with almost one-half of the companies on Fortune’s Global 500 list of major international players hailing from emerging markets – a 900% increase in 20 years. The emergence of nearly two billion consumers in the emerging markets will create markets in their home countries to support aggressive international growth.

2. Technology and Connectivity

Moore’s Law – a computer term professing that overall processing power doubles every two years – is alive and well, and may prove to be conservative. According to SingularityHUB, many computer scientists project that the world’s first “exaflop” computer will be available before the end of this decade. An exaflop computer will perform a quintillion operations a second – the inputting power equal to the human brain.
 
As a consequence of the anticipated quantum leap in computer power, businesses can start and gain scale with stunning speed while using little capital, value will rapidly shift between country and industry sectors to reflect the constant changes, and entrepreneurs and startups will have new advantages over large established businesses. The life cycle of companies is already shortening and decision making has never had to be so rapid fire.
 
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The Responsibilities & Duties of a Modern CFO

cfo lettersOver the past couple of decades, the role of the modern CFO has been, and continues to be, redefined. The advent of new technology allowing for enhanced data collection and analysis tools—as well as operating management’s demands for reliable real-time information—has extended the CFO’s responsibility to all aspects of the company.
 
International commerce and expanded regulatory oversight in culturally diverse customer and employee bases complicates decisions and increases risk. As a result, the CFO’s authority and responsibilities over traditional finance, accounting, and treasury functions has intensified and expanded to satisfy an exhaustive list of internal, external, and regulatory stakeholders, many of whom have conflicting interests.
 
Just as businesses have become more complex, diffused, and subject to greater risks—many of which are unidentified—the CFO function has evolved into a multi-focused position with unprecedented requirements for responsiveness and accuracy. Yesterday’s bean counters are as passé in a modern public corporation as Ford’s Model T on the highway.

Best Practices of the Modern CFO

In a 2013 report coauthored by the Association of Chartered Certified Financial Accountants (ACCA) and the Institute of Management Accountants (IMA), Jeff Thomson, president and CEO of IMA, detailed various factors that have changed the CFO function. In addition to traditional finance duties, modern CFOs are expected to work in collaboration with others throughout the organization, direct integration of key business processes, stimulate change and business transformation, and be trusted business advisors to CEOs and boards of directors.
 
The report identifies several priorities modern CFOs have that their predecessors did not. These are the consequence of increased regulations, globalization, industry and business transformations, aggressive stakeholders, and the adoption of complicated financial and operating reporting requirements. While the actual duties of a CFO vary according to industry, company dynamics, and historical precedents, an effective CFO in the 21st century must excel in each of the following practices.

1. Communications

Whether talking to the board of directors, delivering financial data to stock analysts, investment managers, and regulators, or detailing performance metrics to fellow officers and employees, the importance of clear, crisp, and relevant information delivered in an understandable format cannot be overstated. Knowing what to say, when to say it, and how to present it has become a critical component of a CFO’s responsibility.
 
As Robert Hoglund, CFO of Consolidated Edison, recognizes, “Communication is essential in every aspect of the business…ultimately I need to persuade people to my point of view.” While CEOs can expound upon such nebulous subjects as mission, vision, goals, and culture, CFOs are expected to bring real data to the table, to put the “meat on the bones” for gimlet-eyed regulators and anxious money managers.
 
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How to Climb the Corporate Ladder – 5 Keys to Career Success

corporate-ladder1It’s good to be the boss. People in charge of an organization not only make more money, they also have happier family lives, are more satisfied with their work, and worry less about their financial futures, according to a Pew Research report. Those in the top levels consider their employment a “career,” not just a job that pays the bills.
 
Of course, promotions to those top levels are never guaranteed. However, there are a number of steps you can take to improve your chances of advancing your career—whether with your existing employer or a new one. Long-term success relies on having as many options as possible and ensuring that you’re prepared when an opportunity arises.

What You Need to Advance in Your Career

Getting to the top of the corporate food chain becomes increasingly more difficult in the higher tiers of management. In many organizations, average performers in the lower ranks can expect some promotions simply by being competent and building tenure. Attaining higher positions or advancing at a faster rate, however, require the following elements, at the very least.

1. Corporate Opportunity

The more opportunities available to you, the better. For example, a rapidly growing company is dependent upon numerous managers to implement its strategies, whether introducing new products, expanding into new geographic territories, or capturing a larger market share. On the other hand, mature companies that already dominate an industry may have slower career paths, but may provide valuable experience and security for those willing to wait for their turn in corporate leadership.
 
Some mature companies have policies aimed at inducing turnover at the top levels. They may offer early retirements, buy-outs, and titles with superior compensation but no authority or responsibility—a kind of in-place retirement—in order to retain younger, aggressive managers who might otherwise leave the company. Your selection of employer is a critical element in the speed of your progression up the ranks.
 
Surprisingly, according to the Pew report, a greater percentage of employees are satisfied in their current position (43%) than those seeking promotion (39%). Nevertheless, competition increases as you climb the ladder, simply because there are fewer and fewer jobs the higher you get. Many may hear the call, but few are chosen.
 
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6 Tips to Starting a Business in a Foreign Country

start-business1The combination of inexpensive technology, accessible virtual markets, and easy funding through crowdsourcing is changing the face of entrepreneurship. Today’s new business starters are socially sophisticated, willing to bear more risk than previous generations, and more likely to work out of a home or small office and rely on others for business processes. Some are small guerrilla outfits surfing from one hot concept to the next, and some are venture capital-funded geniuses with disruptor ideas.
 
It is a great time to start a new business – the best time in history.

The Keys to Success

America has always been the land of opportunity, the Mecca for entrepreneurship. While great fortunes have been made by immigrants and first-generation Americans such as Andrew Carnegie in steel, John D. Rockefeller in oil, and William A. Clark in copper, thousands of others formed successful small companies that provided financial security and employment for hundreds of thousands of their fellow citizens.
 
The possibility of being responsible for one’s own fate has never been greater in the history of the country. Latent opportunities for new ideas and businesses have exploded exponentially, each new concept and novel interpretation of old methods pregnant with possibility, just waiting to be birthed. There are several key reasons why this is so.

1. Cultural Accommodation

For much of history, capitalism was restricted to the beneficiaries of high birth, ancestral wealth, and exclusive education. The wide-open spaces and untapped resources of the new continent in the 19th century shattered cultural norms that had existed for hundreds of years. Entrepreneurs flooded the country, exploiting new resources, new markets, and new technology to create the greatest industrial nation in the history of the world.
 
Despite the success, access to these new possibilities was unfortunately generally limited to white males. Minorities (except in their limited communities) and women were excluded, restricted by racial prejudice, cultural stereotypes, and inefficient educations.
 
America in the 21st century is a more open society and access continues to broaden regardless of sex or ethnicity – anyone smart enough and brave enough to create a new business can try. According to a 2013 American Express report, there are 8.6 million women-owned businesses in the country, generating more than $1.3 trillion in revenues and providing jobs for 7.8 million employees. The rate of growth between 1997 and 2013 in new women-owned businesses has been one and a half times the national average. In a U.S. Census News release in 2011, Tom Mesenbourg, deputy director of the U.S. Census Bureau, proclaimed, “The growth in the number of minority-owned firms – both employers and non-employers – has far outpaced that of businesses overall.”
 
Led by federal and state governments, programs to assist potential new business owners are readily accessible and generally free. An entrepreneur can access classes ranging from basic accounting, to sophisticated product and service contracting. Face-to-face onsite mentoring is available from organizations such as S.C.O.R.E., while municipalities, colleges and universities, and private businesses offer incubator facilities with administrative and accounting assistance at low cost. Federal laws require that a percentage of federal contracts be subcontracted to small businesses and provide detailed contracting assistance for those individuals and companies who seek such work.
 
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