Printed 9/22/2015
CALS Business Services
Patti Baynham, Boyce Thompson Arboretum
Leveraging Financial Insight as
Partners in College P
C ll
Leadership
• Public garden, founded in 1927 by William Boyce Thompson as a 501(c)(3) not‐for‐profit research corporation, “… to instill in people an appreciation of plants through the fostering of educational, recreational, research and conservation opportunities associated with the world’s arid land plants.”
• Since 1965, recognized as a research station under the umbrella of the Since 1965, recognized as a research station under the umbrella of the
University of Arizona • Tri‐Partite Agreement signed in 1976 by the 501(c)(3) BOD, Arizona Board of Regents, and Arizona State Parks
• Financial statements independently audited, Form 990 information returns filed with IRS, and Arizona state agency requirements tied to associations with University of Arizona and Arizona State Parks
"We strive for excellence, not adherence to process."
• General public is Arboretum’s largest source of financial support
Slide 2
Goals / Expectations for Presentation
• Discuss roles of business officers in College decision making
• Highlight changes occurring in duties of business services
• Promote unique abilities of business officers to influence the Business Officers as Designers for our Organizations
organization and key business decisions
organization and key business decisions
• Underscore importance of focus on mission‐driven metrics
We must lead with ideas, guiding the organization to sustainably meet and exceed demands
• Share best known methods in communicating financial information effectively
• Practice communicating real world financial insights and provide feedback to each other
Slide 4
Slide 3
Architects of the Future
Evolving Role of Business Officers
• Ideally equipped to see the big picture, … to intervene in • Shift away from transaction processing and control, … decisions and guide towards maximizing value
toward decision support and strategy development
• Best in class business service operations will tend to be • Business officers are seen as truth tellers and key smaller, … but with higher quality of service
spokespersons, … in partnership with deans, functional heads and unit heads • Decision support role is optimally around 50%
• Collaborative members of teams at every level
• Transaction processing, reporting, control roles represent • Strategic and operational insight, … grounded in knowledge remaining 50%
of financial impacts, but extending far beyond numbers
Slide 5
Slide 6
Handout page 1
Printed 9/22/2015
Business Officer’s Most Important Duties
Managing the organization’s
resources
Business Officer’s Most Important Duties
77%
Managing the organization’s
resources
77%
Strategic thinking and
decision making
39%
Slide 7
Business Officer’s Most Important Duties
Slide 8
Business Officer’s Most Important Duties
Managing the organization’s
resources
77%
Managing the organization’s
resources
77%
Strategic thinking and
decision making
39%
Strategic thinking and
decision making
39%
Leading change and
fostering innovation
21%
Leading change and
fostering innovation
21%
Supporting superiors and
managing up
17%
Slide 9
Business Officer’s Most Important Duties
Managing the organization’s
resources
77%
Strategic thinking and
decision making
39%
Leading change and
fostering innovation
Slide 10
Invest/Divestment Driven by Strategic Goals
1.
Be a leading economic development engine for Arizona
2.
Produce employable graduates, who can do jobs that do not yet exist and create new jobs
21%
3.
Be the most sought‐after place to be a part of
Supporting superiors and
managing up
17%
4.
Engaging others in financial
decisions and communication
13%
Be the most effective, efficient, responsive, flexible, and financially sustainable college on campus
(Moving Money to Mission)
Slide 11
Slide 12
Handout page 2
Printed 9/22/2015
Pivotal Agents in Moving Money to Mission
Role in Aligning Performance with Strategy
• Transforming our colleges and universities requires • To formulate effective change, executives need a process view
transforming performance measurement and reporting

• Incorporating the consequences of goals and desired change into budgets and operating plans greatly increases the likelihood of achievement (e.g., RCM)

aligning across disciplines
thinking in new ways, beyond traditional boundaries
• Successful structural, technological, and human restructuring Successful structural, technological, and human restructuring
tends to follow good business process design
• Business officers typically contribute to reducing complexity through the course of change, with attention to
• To stay on course, leaders throughout the organization need timely performance measures, aligned with 
reduced redundancy


process simplification


breaking the cost/value trade‐off (Blue Ocean Strategy)

long term goals
continuous quality improvement
team’s ability to impact
Slide 13
Slide 14
Why is Sharing Financial Insight so Crucial?
• Finance is inextricably entwined with operations
How can we best convey financial insights?
• Business officer’s process view helps to guide organizational integration and steps required to move from strategy to implementation
Paint a picture using the language of operations, based upon but not expressed through numbers and statistics
• Best business offices of the future will rigorously drive to instill financial perspectives into processes and decisions throughout the organization
Slide 16
Slide 15
Identify Value Creating Strategies
All Decisions Relate to Value Creation
• Know your message – what needs to happen, what works well

• More revenue may not equal added value
Highlight changes in business culture and individual or team needs
• Reduced growth in some areas might add overall value
• Know your audience – need to intervene at every level, • Increased risk is often desirable
Increased risk is often desirable
particularly in front line operations to influence behavior
particularly in front‐line operations, to influence behavior
• Sustained focus on strategic objectives is key
• Communicate in the language of operations – requires understanding of activities that comprise business processes

Leverage strengths and emphasize connections

Develop emerging capabilities/leaders

Turn risks into assets exploited for gain
Slide 17
• Performance measures are critical 
Should not detract from value‐generating activities

Tailor carefully to business needs
Slide 18
Handout page 3
Printed 9/22/2015
So What Is Your Message?
Bridging Strategy and Implementation
Benchmarks
Concept Development
Valuation Analyses
• Do you need a certain outcome?

Who must do what and by when?
• Are you just passing on information that will be useful?
Strategic Decisions
Brainstormed Opportunities
Performance Targets

B
Be sure the audience knows how they should use the information
th
di
k
h th
h ld
th i f
ti
• Is a decision needed?
Operational Goals
Performance Measures
Budget Development

Key stakeholders and decision makers need to be clearly identified
• Does a particular problem need to be addressed?
Execution
Performance Reporting

What will determine that the problem is resolved?
Employee Motivation
Slide 19
Frame Message to Connect with Audience
• Focus on WIIFM principle (What’s in it for me?) from audience perspective

Executive Support is Vital But Not Enough
• Communicating financial goals and results in terms everyone can understand helps to energize the organization
Use tangible examples of audience’s activities to explain data
(e.g., “Coordinating public workshop schedules with book publication dates boosted both distribution and sales.”))
publication dates boosted both distribution and sales.
• Value‐based management simplifies and adds transparency to decision‐making processes
to decision‐making processes
• Build up to primary message with roughly three key points

Slide 20
Might relate theme to various functions

Could portray past, present, future conditions

Primary feedback/data elements may be highlighted
Consistency

Empowerment

Efficiency
• Greatest source of untapped resources to achieve excellence is from middle management down
• Anticipate, prepare for, and encourage questions
Slide 21
Slide 22
Spreadsheets Do Not Speak Well in Public 
Use Plain English
Instead of:

Use:
• Capital Assets

Long‐lived Assets
• RBC

Budget Change Request
• Temp Restricted Donations

Donations Designated for a Specific Purpose
• Cash Flow

Analysis of Cash Available
• FTE Charge

Allocation of Costs Based Upon Number of Employees
Slide 23
Slide 24
Handout page 4
Printed 9/22/2015
Graphic Selection is Key to Message
A Graphic is Worth a Thousand Data Cells
Liabilities
Net
Assets
Total
Assets
• Standard presentation format on a regular basis has advantages – dashboards
• Variations in format give very different perspectives, aid in highlighting particular points of message
• Use graphics to help lead audience to conclusion,…avoid discouraging audience from thinking and discussing by not
being too explicit with written words
Slide 25
Slide 26
Consider Data Picture Relative to Message
Revenue Trends – One View
Leverage Dashboards for General Oversight
Revenues
Revenue Trends – Another View
11%
$2,400
$2,100
$2,700
$1,800
$2,700
11%
$2,400
7%
$2 100
$2,100
23%
$1,800
13%
$1,500
$1,200
10%
15%
15%
15%
12%
19%
16%
21%
17%
FY2012
Partner #2 Support
5%
13%
$$K
Partner #1 Support
8%
$600
$300
9%
13%
8%
$900
FY2013
Endowment Draws
31%
Unrestrctd Donations
13%
16%
14%
19%
18%
FY2014
Gift Shop Sales
23%
8%
10%
$1,200
8%
5%
15%
15%
$900
$600
13%
12%
19%
16%
13%
16%
$300
21%
17%
$600
$300
Partner #2 Support
31%
$K
$-
19%
6%
11%
14%
FY2012
FY2013
FY2014
13%
11%
19%
16%
16%
14%
21%
17%
19%
18%
FY2013
Restricted Donations
FY2014
$625
Unrestrctd Donations
$700
$525
$350
$175
$$K
$(175)
$(350)
$(525)
$(700)
Gift Shop Sales
Admissions
18%
(lines)
$1,250
$500
$1,000
Partner #2 Support
$375
$750
Misc Other
$250
Restricted Donations
$125
Unrestrctd Donations
$K
$-
Memberships
Gift Shop
p Sales
Admissions
FY2015
$500
$250
$K
$FY2012
FY2013
Horticulture
o cu u e
Fundraising & Mbrshp
Payroll
Program Supplies
FY2014
FY2015
V s o Suppo
Visitor
Support
Maintenance
Utilities
Maintenance & Equip
Sc e c Research
Scientific
esea c
Support Svcs & Admin
Printing/Advertising
Admin/Mtgs/Travel
Net Income from Operations
1,750,000
Net Cash
Provided/
(Used)
1,250,000
750,000
250,000
FY2012
FY2013
FY2014
Current Yr Operating Income/(Loss)
Other Current Assets (Inc)/Dec
Funds Payable to UA Increased
Contributions Restricted by Donors
FY2015
Expense Type
(columns)
Cash Flow
$K$-
FY2015
12%
FY2012
Misc Other
Memberships
15%
Admissions
Endowment Draws
15%
15%
15%
$900
13%
Partner #1 Support
pp
13%
13%
$1,500
Memberships
11%
9%
$1,800
Misc Other
Restricted Donations
6%
$2,100
7%
31%
8%
$1,200
Endowment Draws
Partner #1 Support
9%
13%
23%
13%
10%
$1,500
11%
$2,400
Expenses
Functional Area
$2,700
FY2015
Depreciation & (G)/L on FA Disposal
Long-lived Assets Purchased
Other Liabilities Inc/(Dec)
Net Reduction in Endowment
(250,000)
FY2012
FY2013
FY2014
FY2015
(750,000)
Net Optg Revenues
Net Optg Expenses
Net Optg Income
Slide 27
Slide 28
Infographics
Expenses by Type (Lines on Dashboard Graph)
Expenses
• Information graphics or infographics are graphic visual $625
$1,250
$500
$1,000
$375
$750
$250
$250
$-
$
K
Increases in
Professional
Services, Legal
Fees, Travel
$500
$125
representations of data
$FY2012
Horticulture
Fundraising & Mbrshp
Payroll
Program Supplies
FY2013
FY2014
Visitor Support
Maintenance
Utilities
Maintenance & Equip
$
K
FY2015
Scientific Research
Support Svcs & Admin
Printing/Advertising
Admin/Mtgs/Travel
• Intended to present information quickly and clearly
• Can bring tedious numbers and dull reports to • Especially for communications with less financially‐oriented stakeholders, a good way to make your story more compelling
Utilities
Mktg
Programs
R/M
2014
Slide 29
Mgmt
Payroll
Utilities
Mktg
Programs
R/M
Mgmt
Payroll
2015
Slide 30
Handout page 5
Printed 9/22/2015
Highlight Operational Connections
• Integrate non‐financial comparisons to help audience relate to message being presented
• Financial results generally should be an outcome versus a g
Team Assignment
primary driver of business decisions
primary driver of business decisions 
Being a key consideration  being the primary driver
• Motivate audience to think about substance or key business message rather than focusing on details of measurement methods, procedures, technology, etc.
• Drill down to details in areas where action or focus is needed
Slide 32
Slide 31
Team Assignment, for November Meeting
• Select a real world financial message, from one of the units represented in your team, to present November 17
• As a group, create and refine three content slides conveying Questions ?
Q
the message, as you would present it to decision makers within your organization
• Have one representative from the team make an 8‐ to 10‐
minute presentation of the material in our November 17 Business Managers’ meeting
Patti Baynham
pbaynham@email.arizona.edu
• Five minutes will be allowed for discussion and feedback 520‐689‐2723
after each team’s presentation
Slide 34
Slide 33
CALS Business Services
Leveraging Financial Insight as
Partners in
P t
i College
C ll
Leadership
Has our communication and influence been effective?
What gets measured, reported, and talked about
gets managed
(part 2)
"We strive for excellence, not adherence to process."
Slide 36
Handout page 6
Printed 9/22/2015
Defining Performance Measures
Measurement System Requirements
• Too many measures will guarantee virtually no effective ones
 Ideally 6‐8 at top management level
 Perhaps 5‐6 for each functional area
• Must be owned by operating managers, not executives
• Common measure weaknesses:
 Internal bias & micro‐focus
I t
l bi & i
f
 Orientation towards the past
 Focus on data vs information (which requires goal & expectation to achieve)
• Finance needs to spearhead performance metrics system
• Should be both leading and lagging
 Potential problems and goal achievement expectations
 Past decisions and successes
• Weave measurement system goals and focus into fabric of 



Connection with front‐line employees is critical to true behavioral change and long‐term effectiveness
Common link among disparate functions
C
li k
di
f
i
Assistance in helping operating staff interpret measured results
Demonstrated track record as trusted scorekeepers
organization, triggering changes in how business is done
• Cost‐based (resource usage) and Non‐cost‐based (what drives costs)
• Maintain consistency over time while staying vigilant to business changes justifying adaptation
Slide 37
Slide 38
Response to Measures
• What is being done to influence measured results?
• What are underlying problems or reasons for success?
• Every measurement report should be accompanied by Wrap‐Up
p p
commentary – proactive step to focus attention on what is happening in the business
• Nurture first followers who embrace called for action or thinking, … make it easy and rewarding for them to follow
• Practice ongoing dialogue and mutual coaching with operations staff
Slide 40
Slide 39
Summary – Financial Communication
• Finance is a function with unique reach across all areas of the organization, integrated into virtually all processes
• We must lead with ideas, guiding the organization in our Thank you !
y
y
communications to sustainably meet and exceed demands • Robust relationships throughout the organization are key to having the influence that is vital for a healthy college
• Emphasize connections between finance and business processes, … in the language of operations
• Performance measures are critical for best‐in‐class results
Slide 41
Slide 42
Handout page 7
Printed 9/22/2015
Q
Questions ?
Patti Baynham
pbaynham@email.arizona.edu
520‐689‐2723
Slide 43
Handout page 8