Every Friday, we will select a few in-depth articles from the week that we think are worth your valuable time as a construction financial manager (CFM). We look for compelling articles not only about financial topics, but about business, technology, and life, that challenges you to think about your role as a CFM in different ways. We’d love to hear from you about how we’re doing, and to have you join our community by subscribing to receive this weekly post by email. Follow #CFMReview.
[lts_blockquote align=”right”]CFMs run into problems every day. The answer will depend on circumstances, relationships, and nuance…but the real trick is knowing what it depends on.[/lts_blockquote]Harvard Business Review Says The Answer To Every Business Question is “It Depends.” Many like to see the world in pure black and white, and folks can make a mountain of money advocating that they have the right strategy or business philosophy. When push comes to shove, however, a recent article in the HBR concludes that the answer may…well, just depend on circumstances and who is passing the opinion. In what the author (Scott Schaefer), along with project-partners Mike Mazzeo (Kellogg) and Paul Oyer (Stanford), dubbed “Mazzeo’s Law, they found that in working with businesses across the country, “[t]he answer to every strategic question is ‘It depends.’” Construction financial managers face business challenges every day, and they likely know the Mazzeo’s Law all too well. Customer relationships, project jobsite circumstance, etc. – all of this factors into how a CFM will handle a financial problem. This doesn’t mean CFMs live in a world of ambiguity absent consequence. As the article goes on to explain, the trick is knowing what it depends on. Read: The Answer To Every Business Question is “It Depends.”
CFMA Introduces New Revenue Recognition Standards? “It’s Finally Here” proclaims the CFMA (@CFMA) in their article summarizing the new model for revenue recognition (#revenuerecognition) in the construction industry: It’s Finally Here: FASB Issues New Revenue Recognition Standard. Though the standards are not effective for a few years, many CFMs and most companies will be measurably affected by these new standards. It’s imperative that CFMs and organizations get educated on the standards and prepare for the transition. If you’ve been under a rock, the article introduces the topic explaining that “The ASU eliminates all existing revenue recognition guidance…including industry-specific guidance, and significantly expands revenue recognition disclosures.” From there, the authors will give you a high level tour of the new standards, only touching upon something that we think will be really impactful: the collectability requirements.
The Power Of Two: I really enjoyed this article in the Atlantic about the power of working in pairs: The Power of Two. It is written by Joshua Wolf Shenk, the author of an upcoming book titled Powers of Two: Seeking the Essence of Innovation in Creative Pairs. The research and article is downright interesting because it evaluates the partnership between John Lennon and Paul McCartney. The article reminded me of some of the great working partnerships I’ve been a part of over the years, and I tend to agree with the author: Sometimes, two is the magic number. As a CFM, it may be worth considering what projects on your plate could benefit from the creative and innovative energy provided by a team of two.
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