It’s the questions stupid
by Jack Large
Peter Drucker, the leading management thinker of the last century, had six key questions for any company. He advised asking:
- What business are you in, e.g. not rail but transportation
- What is your mission?
- Who is your customer?
- What do your the customer value?
- What are your results?
- What is your plan?
Drucker felt these were the starting point of any analysis of a business, any new veture.
We can use these questions to show what the strategic role of the corporate treasury department should be.
What is your mission?
Is it to:
- provide business support and growth?
- service provider for the group?
- enable the business to do what it wants to do?
- enable the business to do what it wants to do?
- increasing visibility and control over cash balances, funding and risk management?
- increasing adoption of centralization structures?
- increasing involvement in working capital management?
- mobilizing cash reserves to gain a competitive advantage?
- provide proactive business support worldwide?
Who is your customer?
Is it:
- just one: The CFO or several?
- accounts department?
- business units?
- the regulators?
- any others?
What do they value?
Is it:
- the CFO - strategic suggestions as to how to open up new markets?
- accuracy and speed of response?
- new efficiencies in e-commerce?
What are your results?
Questions include:
- How do you define value/results in corporate treasury department?
- free cash flow?
- how to generate liquidity?
- quality of the planning?
- Are we successful?
- What must we strengthen or abandon?
What is your plan to deliver strategic treasury?
Key elements of effective plans include:
- What stop doing?
- What focus on?
- What new innovations are you going to undertake?
- Where are you going to take a risk?
CTMfile take: All important initiatives start with questions………..
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- This item appears in the following sections:
- Best Practices & Benchmarking
- Operational Risk Management
- Outsourcing Cash & Treasury Management