We all know the famous admonishment regarding the tendency of our "best-laid plans" to be led astray, no matter if its designer is a mouse or a management team. But for as ambiguous and ominous as this sounds, what ultimately leads to failure, particularly in business, isn't a matter of the plan's scope but its execution. Time and time again, companies are felled by their inability to accomplish the most basic of tasks, even when they succeed at their most ambitious goals. This is known in risk management as execution risk.
"Meeting growth objectives requires reducing execution risk as much as possible."
Business leaders, and finance chiefs in particular, must understand how to define execution risk as it relates to their own plans for growth. This requires efficient processes for gathering, analyzing and acting on the financial and operational information that really makes the difference in propelling the company forward.
Consero's unique resources make it easier to execute on a strategy for growth, instead of getting bogged down in routine organizational challenges.
What execution risk looks like
The opportunities for execution risk in any business are practically limitless and vary by industry. No matter the company's age or size, however, they tend to cluster in a few common categories, as explained in the Open Risk Manual:
- Corporate finance failure: Inaccurate statements, tax non-compliance, incorrect data entry and transaction processing issues all contribute to execution risk.
- Failures in strategy creation or modification: Inaccurate or incomplete contracts, faulty financial models or incomplete visualization of relevant data all make it difficult to adhere to or revise a successful strategy.
- External execution failures: Vendors missing their mark, suppliers missing deadlines or simple mistakes by staff members are difficult to predict but easy to miss without strong processes in place.
Meeting growth goals
Reducing execution risk means setting a company on a path to achieve its plans for growth. To do so, business leaders face the key challenge of translating their strategic vision into precise action. As pointed out in a Wall Street Journal column on CFO topics, this often takes an ambiguous form – "I know it when I see it," for example. Business leaders can't simply assume that steps toward full realization of a strategy will just present themselves – they can't even assume that a plan will still be effective in less than a year.
To make strategy execution crystal clear for everyone, business leaders need to have the most efficient tools in place to make routine tasks and basic visibility a given rather than an unknown. With this solid foundation, it's easier to build a robust organization that can stand out among the competition.
Consero's financial solution reduces execution risk by giving early-stage businesses access to the people, processes and technology that can accomplish essential finance and accounting tasks quickly and accurately. This results in a number of measurable benefits:
- Disparate financial data from multiple sources is connected under one platform for easy viewing and tracking.
- Companies gain greater visibility into their financial processes and organizational performance.
- Ultimately, they save time and money on essential duties like creating financial statements, tax reporting and balancing income and expenses.
Effective finance controls allow seed- and growth-stage companies to pitch investors more confidently and speed their time-to-market. Most importantly, this high level of control is what propels young businesses from a startup to an established firm, and it all comes down to knowing where they stand in relation to their future plans.
Learn more about how Consero has helped businesses eliminate risk and realize their full potential.