Mini MBA in Strategic Finance: Making Strategic Financial Decisions

Mini MBA in Strategic Finance: Making Strategic Financial Decisions Strategic Financial decisions determine the future performance of a business and are vital to get right to win value for your organisation. If you are either making these decisions now or you are on the brink of this, either in this or your next job, then this is the course for you. These decisions may entail capital expenditure or be about operating expenditure with longer term benefits. They are also frequently clouded by external and internal uncertainties, and their value is often entangled in other projects and activities, or is contingent on a number of things all lining up. These decisions also demand a lot of thinking about the competitive markets besides the finance aspects, and whilst you may know quite a bit about one or even both of these things, there is more to learn about how they should be linked. Ignoring this linkage has been one of the major causes of the global financial crisis and dipping profits. So what are “Strategic Financial Decisions”? Decisions that will substantially determine business performance and value generation beyond the current accounting period and possibly over a period of years The General Manager, the Head of Function Manager, the Planner and the Finance Manager all face major challenges in evaluating these decisions .This intense three day “Mini MBA” gives you the best Leading Business School thinking set in a very practical context, combined with theory and concepts not even taught there. Indeed in many Business Schools’ strategy and finance are taught very independently of each other. For the present or aspiring General Manager / Director this programme both demystifies Finance and also helps him/her to put numbers on Strategy. For the Planners and Finance staff, it opens their thinking up to how the General Manager does - or should - see the world in making these critical decisions. It is an “MBA By-Pass” for those busy executives who don’t have the time to do a full one, it is an ideal MBA taster course. It is relevant to: a) Mature economies where growth is much harder and the capturing economic value too b) Developing countries where investment decisions are made to grow fast and in conditions of some uncertainty. In both contexts this is a truly unique course in its breadth both in its knowledge foundations as well as in its topicality, relevance and timeliness. The Programme will Feature: What are Strategic Financial Decisions? What is “Strategic Finance”? How to manage the process of making those decisions What is “Economic Value” and how does it both relate to, and go beyond, conventional, limited and short term financial thinking? How to go behind “the numbers” into the more fundamental performance drivers, different Business Models, Value and Cost Drivers, and dealing with the world of uncertainty, intangibles and interdependencies: the “Three Curses of Value” and how to dispel them Learning how to read accounts at a much deeper level – and to be able to ask exactly the right questions Demystifying the technical issues including Discounted Cash Flow, the Value to Cost Ratio (“VTCR”) How to value different things economically: valuing a business, valuing options for developing it strategically, more specific projects, special cases like M&A, alliances, divestment, change programmes, evaluating less tangible capital and operating expenditure What is “Strategic Finance”? The process of translating these decisions into economic value, and targeting these to optimise value creation Attend this programme and you will: Gain a much deeper and broader understanding of finance and how it can be used to help make value-added, strategic decisions Become more able to “read between and behind the lines” of financial statements, to ask the right questions from these and to draw key and incisive insights out Understand the language, concepts, the tools for Managing Economic Value, to gain experience and in applying these tools at the corporate, the business, the project and the everyday level Demystify the technical aspects including Value and Cost Drivers, the Cost of Capital, Terminal Value, NPV versus IR versus Payback , Value to Cost Ratios (“VTCR”) metrics and to understand how, ultimately, the financial assumptions largely drop out of the strategic analysis Learn about how to use these to help create and evaluate new strategies, to convert them into persuasive business cases and to deal with “special cases” in strategic cost targeting Increase your long term upside career potential and flexibility-and to have the satisfaction of having made value winning decisions throughout this Who Should Attend This programme has been carefully designed for the benefit of: Business Managers and Directors whom need to grow profit and to add longer term value Managers aspiring to roles as Heads of Functions, General Managers, Directors, Directors and CEOs Finance staff aspiring to be Heads of Finance Functions, planners, FD’s, or roles in General Management; also Accountants in practice with ambitions to be Partners Business advisors and Consultants who want to understand their clients’ business models Corporate Bankers who need to be able to see inside clients’ businesses not just financially but strategically Key Account Managers who want to be at ease in meetings at CEO/ Director, level and who want to make the optimal business case to their clients and win major contracts Planners, project managers involved in making business cases: for M&A, alliances, major capital expenditure and organisational change programmes All those engaged in strategic cost reduction /restructuring All managers who wish to be exposed to MBA learning–whether they never wish to actually do one, or maybe to have a taste before doing a full one Pre–Work To get the very most out of this intensive course you are encouraged to read several very short, accessible articles by the Programme Director before the start You are also asked to bring a set of your company’s annual set of accounts and annual report or those of another company to review and analyse on the first day. Features A full toolkit of strategic finance tools and techniques is handed over to you with support afterwards… An email help line is maintained with all attendees after the programme to ground in the learning, to deal with participant queries, and to encourage more experimentation and change
Day 1 What is Strategic Finance? Key Concepts and Tools How do Strategy and Finance need to be Linked: and Vice Versa? What is “Strategic Finance”? The linkages of strategic and financial analysis The Strategic Finance process and tools: an overview How does this process relate to others e.g. strategic planning, budgeting, financial reporting, investment appraisal, performance reviews, project management, change management, governance etc. Translating performance drivers into cash flows and thus into value: through market, competitive, economic, behavioural, psychological and numerical analysis Modelling the value flows outside and inside a business and its competitors How is the World Seen through Traditional Finance? How does finance traditionally work? Demystifying balance sheets, P&L accounts and cash flow What you may have missed through just knowing about this before: interpreting conventional annual reports and accounts strategically: major case study of a PLC using Ratio and Performance Driver analysis A quick analysis of your own company’s accounts - teasing out the strategic, performance and financial issues: review of selected ratios, Performance Driver analysis and “fishbone” analysis Deficiencies of conventional finance: accounting distortions, short term thinking, absence of uncertainty analysis, objectives and gap targeted planning processes, cost reduction myopia Taking a more Strategic Approach Managing for “Economic Value“(or “Shareholder Value”): cash flows and their timings are key The seven generic value drivers, including Sales Growth Rate (SGR), Operating Profit Margin (OPM), Weighted Average Cost of Capital (WACC), investment rates, tax rates etc. What goes inside the ”WACC”, or the cost or equity plus cost of debt and how these are calculated Introduction to seeing these in a competitive context including the “Competitive Advantage Period “ CAP” Case study: Disney and Marvel Disney bids for Marvel: Case Study (a Classic MBA case) The theory behind the Disney and Marvel case (A): technical issues: deriving the Cost of Capital, “Gearing”, terminal values, testing the realism of assumed synergies, risk and sensitivity analysis -and tolerance testing, scenario thinking Applying theory to valuing a business: Disney’s valuation of Marvel (1) the value assumptions behind the current share price Day 2 Enhancing Economic Value - Competitive Strategy and Economic Value Added (“EVA”) Review of Day 1 Revisiting the Strategic Finance process and tools e.g. “EVA” and the “Value Gap” Learning lessons Q&As Disney and Marvel Case Study: the Battle for Value Disney and Marvel case (2) Where is Marvel headed on its current strategy in the foreseeable environment? The base case valuation (same as before, similar to before)Disney and Marvel case (3) What is Disney’s strategy for Marvel? What is Marvel’s defence strategy: what are these different valuations? Disney and Marvel case (4) - what should Disney bid for Marvel to maximise its share of value and how should Marvel’s board optimise the value of their shareholders? Here participants role-play either being on Disney’s board or Marvel’s board More Theory behind the Disney and Marvel Case Technical issues: testing the realism of assumed synergies, risk and sensitivity analysis, and tolerance testing Revisiting the linkages between the strategic and the financial: understanding the competitive pressure and competitive advantage, and the impact on margins: creating unique competitive space “Blue Ocean” value creation: to achieve superior and sustainable sales growth and profit margins Value segmentation: assessing where and how assumed value would be created and also how value wouldn’t be destroyed (e.g. in integration) Acquisition deal-making and the behavioural/ psycho-dynamic factors behind strategic financial decision making How Value is Created through Economic Systems: Modelling Value in the Football Industry Creating economic value in novel and inventive ways Understanding the “Business Value System” - the business model The case of Manchester United with some strategic techniques: Porters’ Five Forces which shapes the Operating Profit Margin (“OPM”), customer value capture which shapes Sales Growth (“SGR”), and the General Electric Grid which predicts economic returns Elements of strategic project appraisal: NPVs. IRRs, payback and “VTCR”: or the value to cost ratio Coming up with some strategic investment project for Manchester United and using more specific value and cost drivers to do a business case for these, with simulated presentations to the Manchester United board Using Strategic Finance on Operational Issues The case of coin-locked supermarket trolleys (1) Brain storming the value and the cost drivers The project brief: where do you collect the data from, how and how long should it take you? market, operational, behavioural and financial data Day 3 Economic Value in Practice: Operations and Cost Management Review of Day 2 Dealing with the three “curses” of Economic Value: intangibles, interdependences and uncertainty Thinking about Value Creation, Value Dilution and Value Destruction in your businesses: past, present and future Q&As Using Strategic Finance on Operational Issues The case of exploring the value drivers coin-locked supermarket trolleys (2) Putting together the business case for converting to coin-locked supermarket trolleys Managing key stakeholders through the language of economic value and through business cases Presentations to the CEO (simulated) of a UK supermarket company and feedback with “What is the one big thing that we have missed”? Some tips on Stakeholder Analysis: back to behavioural finance issues Dealing with Special Cases In this session we guide you through “best practice” in dealing with a wide spectrum of Strategic Financial issues M&A and Divestment Alliances Restructuring Particularly uncertain or “Contingent” investment decisions “Protective” or “Defensive“ investment decisions Brand and Marketing investment Diversification International development Investment in capability, change, and organisational transformation Major, long term capital projects “Bet your business” and governance issues Who is involved in these at the different levels: corporate, divisional, business unit and external shareholders and bankers Relating these decisions to the corporate planning, controls and rewards processes, and links to corporate governance Strategic Cost Management - Bringing it all Down to Earth The “Strategic Cost Management Process” (SCM): managing costs for value to add value and not to undermine the strategy Cost leadership strategies and Strategic Cost Targeting Applying the SCM process and the “Challenging Cost Checklists” to an issue in your own organisations Managing for Value in Everyday Life: “Everyday Value Winning” Tips on using Strategic Finance at CEO and Director Level: position papers, presentations, workshops and meetings Career development opportunities using “Strategic Finance” Is a full MBA useful to you? Action planning and using the programme director’s help-line to encourage further application Course summary and close