Agile CFO     |    www.agile-cfo.com 

Correct capital planning and sourcing can improve returns. Your sense of capital allocation will allow you to establish a clear company goal (investing or otherwise) in mind. Remembering a few simple things about effective capital allocation will allow you to overcome many plateaus in business growth…

The importance of having a well-defined investment strategy cannot be understated. If there are any problems with the company’s current investing practices, the problem should be rooted out at the source to prevent further complications. If the strategy does not incorporate most of the following elements for highly effective capital allocation, then a new strategy should be adopted: 

1. A priority on investments. Having a defined marker for value. Define what exactly your company values and act accordingly. 

2. A clear focus on where the company wants to compete. 

3. An ownership mindset. This mindset keeps the company in mind. 

The US has been making a transition into a postindustrial society for some time now, in which creative service-based goods (as opposed to material goods) are the driving force of the economy. As waves of technological innovation continue to flood the marketplace each year, industries have had to turn to a new brand of financial expert for ideas. This expert, known as the “postmodern CFO,” must be capable of overseeing the transitional effects of post-industrialization.

The new skills postmodern CFOs have, or in other words, the ones CFOs must soon expect, include:

1. The ability to create business models that reflect market trends. This requires business and marketing expertise, and incorporates analytical skills.

2. The ability to attend to core financial responsibilities while also recognizing and reacting to customer/client feedback, as well as social trends.

3. With the influence that politics and media now have on modern economics, CFOs must have the ability to foresee the influence of external trends on business and finance.