How To Be The (CSO) Chief Stewardship Officer For Your Organization
Today’s CEO is being asked to wear many hats and play many roles. Some are traditional and familiar and some are new and unique brought about by powerful events, like a pandemic, or shifts in societal trends and conditions that can impact a company’s employee base and brand. We know the most successful leaders are those who, when faced with conditions beyond their control, recognize the need to adapt and evolve and put on a new hat.
The idea of the CEO as the Chief Stewardship Officer (CSO) has the potential to provide near term benefit as well as long term value to the company and its stakeholders. The employee today places a high value on social responsibility and stewardship—as do your customers and the communities in which you live and work. That’s why this topic is worth your consideration and thought time.
Stewardship is defined as “the office, duties, and obligations of a steward; the conducting, supervising, or managing of something; especially: the careful and responsible management of something entrusted to one's care.” This definition can be applied to corporate financial stewardship. Here’s two tangible ways to make it actionable.
#1: Carefully and responsibly manage your financial resources
The good news here is that with close alignment and coordination between you and your CFO much of the heavy lifting can be accomplished with and through the finance team. The depth and scope of this process will vary widely depending on the type and size of business you are in. A place to start this careful and responsible management of your financial resources is to look at and answer questions about two of your most important financial statements: the balance sheet and the P & L.
Here a few questions to ask yourself:
Is my balance sheet strong?
Are my current ratios and liquidity ratios adequate?
Is my capital sufficient?
Have we taken appropriate reserves for known and potential liability events?
Is my P & L showing consistent earnings performance?
Are my revenue sources diverse and dependable?
Do we generate predictable gross margins?
Are my revenues growing at a faster rate than my fixed overhead expense?
The answers to these kinds of questions will result in numbers that can be checked and compared to other like companies through industry trade groups or peer group analysis exchanges. The expertise that you, your CFO and finance team bring along with this comparative analysis will allow you to set the metrics and goals around the balance sheet and P & L.
Once you’ve become comfortable with the data and the metrics, share them with your entire Executive Leadership Team to get their alignment and buy in. The next step in this stewardship process is to, as a team, identify two to four initiatives that will create the greatest impact in moving to strengthen your financial condition.
Don’t be afraid to share your metrics and goals with your entire organization as something you are committed to accomplishing—a public commitment to a goal greatly increases the probability of success in achieving that goal. Be sure to share your progress too. It can motivate employees if you show them how their role contributes to the success of the company, and how you and your team are actively working to be careful and responsible stewards of your financial resources.
#2: Give back
We all know you can’t give away what you don’t possess—so the outcome of step #1 will provide you with the insight and confidence to determine if you are ready to give back. The process of narrowing and focusing the categories of giving is an important first step. You can identify as few as one or as many as four or five. Here are few ideas of areas you can give to:
Children and youth
Homelessness
People with special needs
The arts
Some companies may want to give to an entity whose role and purpose is to identify and vet a variety of service organizations in a community or state. In some instances, a few of your employees may be significantly involved with or committed to a social service organization. In any case, narrowing the focus of your giving enables you to better manage the requests you receive and increase the impact of your giving.
The big question around “how much” is always challenging. The simple answer is: it needs to be financially and socially responsible—a question that only you and your team can answer.
Once you become known as a giving company the number of requests you receive will increase and there will be tangible examples of the impact your giving is having in your community. Just like sharing the impact your internal financial stewardship is having, the stories of the external giving back should be shared with your employees as examples of your commitment to stewardship.
The role of Chief Stewardship Officer may be a new hat for you to wear, but it can provide real evidence that stewardship is an integral part of your company’s culture—of how you behave individually and collectively. It’s who you are. Your employees will see it and feel it—as will your customers and your communities. It’s worth thinking about.
If you’d like to learn more about working with one of our CEO Mentors, schedule a call with us today! At Building Champions, we create customized coaching engagements that focus on both the beliefs and behaviors of great leadership. We guide leaders, teams, and organizations to be healthy and high-performing so they can have a greater impact on everyone they serve.