What do you do if your corporate finance strategies are becoming outdated?

Conducting a review is the first step in figuring out if your strategies within corporate finance are outdated. It is important to stat informed with the latest trends and developments to can impact strategies. Compare to your peers, then identify areas where your strategies are lagging, sometimes you may have a competitor advantage. Assess your strategies alongside your goals, are they aligning with them? Understanding the why is so important especially in relation to the company's overarching purpose and vision. By prioritising what is best for the organisation, then you can navigate effective ways to also benefit yourself for your personal development too.

In my experience the key is to constantly and consistently evolve your business thinking (theory) and business strategy ( action) to ensure you are at the cutting edge and innovating, not simply "up to date". Clients want more from the best firms, not simply a service but a partnership, preferably long term, of trusted and loyal advisors who understand their business. We at FCF and FCF Academy strive to do this.

In my experience, 1. Assess the situation; how bad, why it happened 2. Ask for input 3. Make the required updates 4. Monitor on a periodic basis to avoid the issue again 5. Keep environment which welcomes constructive ideas

It's crucial to reassess and adapt when corporate finance strategies become outdated. Begin by conducting a thorough market analysis to understand current trends and technologies. Engage with stakeholders to gather insights and identify areas for improvement. Consider adopting innovative financial technologies (FinTech) to streamline processes. Invest in training for your team to stay ahead of industry changes. Finally, develop a flexible strategy for quick adjustments to market dynamics. Embracing change and innovation is key to staying competitive.

During my time working in the financial services industry, I've seen firsthand how a rigid approach to investment decisions can stifle growth. Many traditional institutions were slow to adopt new asset classes like cryptocurrencies or environmental, social, and governance (ESG) focused investments. This left them at a disadvantage compared to more agile competitors who capitalized on these emerging market trends. What can we do? A crucial step is fostering a culture of continuous learning within the finance team. Encouraging participation in industry conferences, workshops on new financial technologies, and even cross-departmental collaboration can expose the team to fresh perspectives and keep them updated on the latest trends.

The finance industry is one of the most fastest changing industries, whether it be technological, market or economic shifts. Throughout my career I have learnt to embrace the change and always be eager to learn. New opportunities always arise and this can definitely test you. Yet, it is important to embrace the change in order to grow professionally and personally. Embracing the change is really important, so you become more flexible, which is super important within the corporate finance industry. Overall, embracing the change is essential for long-term sustainability and success of an organisation.

This is "Corporate" finance, which means our financial acumen is supposed to be defined in the context of corporate culture, industrial change, managerial needs, and socially recognized values. For example, in the past, hard work was highly valued, but nowadays, it's become more subtle. Therefore, finding efficient measures is also a critical part of leadership. Another example is sustainability; nobody used to care about it, but today, everyone is subject to ESG considerations. Although some may view it as a major inefficiency, they can't deny that we're facing the ESG wave including actual regulations, so it's our responsibility to figure out how to excel in this context.

Once the Identification of Outdated strategy is done- then focus should be on - Benchmarking: Compare your financial performance metrics against industry leaders. This can reveal weaknesses and highlight areas where your strategies might be lagging. Competitor Analysis: See how your competitors are structuring their finances. Are they using different financing methods or capital allocation strategies? Internal Review: Conduct a thorough review of your current financial processes and assumptions. Are they based on outdated data or unrealistic expectations?

Embrace the "Why": Understanding the rationale behind change. Change often breeds resistance. Foster a culture of open communication. Leadership should clearly articulate the rationale behind any transformation. For example, a CFO implementing a new budgeting software might explain how it will streamline processes and free up time for strategic analysis. When employees grasp the "why," they're more likely to embrace the "how." See change as an opportunity, not a threat as it can unlock new avenues for growth.For instance, the implementation of a new financial planning and analysis (FP&A) system could open doors for automation expertise or data visualization skills.

Technological Tools and AI has improved Financial World a lot and it will be improving day by day in coming years. Revisit Core Objectives: Re-evaluate your company's overall financial goals. Are they still relevant in the current environment? Update Assumptions: Ensure your financial models and forecasts consider the latest data and economic trends. Embrace New Tools: Explore how technology can streamline financial processes or uncover new financing options. Seek External Expertise: Consult with financial advisors who can provide fresh perspectives and insights on the evolving financial landscape.

By recognizing the signs of outdated strategies, taking proactive steps to modernize, and staying informed about industry trends, you can ensure your corporate finance function remains effective and drives long-term success. Focus on Agility: Today's business environment demands adaptable financial strategies. Be prepared to pivot quickly based on market changes. Data-Driven Decisions: Leverage data analytics to gain insights into customer behavior, market trends, and risk factors. Sustainability Integration: Consider environmental, social, and governance (ESG) factors when making financial decisions. Socially responsible investing is growing and can enhance your reputation and attract investors.

The financial world is constantly evolving. By continuously learning and adapting, you can ensure your corporate finance strategies remain relevant and drive long-term success. Pilot Projects: Test new strategies on a smaller scale before full implementation. This could involve using new valuation models or exploring alternative funding sources. Data Analytics: Leverage data analytics to gain deeper insights into financial performance and identify areas for improvement. Communication and Transparency: Communicate the need for change to stakeholders and explain how updated strategies will benefit the company.

74% of executives report a culture of learning within their companies, but a LinkedIn Workplace Learning Report found that leadership is the least likely group to actively participate in learning initiatives. This disconnect between rhetoric and reality creates a frustrating environment for lower-level employees tasked with implementing change.What’s worse? When they do bother to learn, it’s akin to sipping from a stagnant pool of outdated theories and irrelevant degrees.Our outdated education offers prestigious degrees with fancy titles, but lacks the agility and real-life skills needed for today's dynamic markets. We're drowning in MBAs while gasping for practical skills.

It's crucial to adapt to evolving trends and market dynamics. Conducting a comprehensive review of current practices to identify areas for improvement and alignment with contemporary trends. Embracing innovation by incorporating new technologies, such as AI, blockchain, and data analytics, to enhance decision-making processes and optimize financial operations. Fostering a culture of continuous learning and development to stay abreast of emerging best practices and industry standards. Collaborating with industry experts, attending conferences, and participating in professional development programs to gain insights into cutting-edge strategies.