Gaining Financial Sophistication
The financial pressures on provider organizations should sound familiar to health and human service executives by now. The demands of integration and interoperability, managed care contracts, heightened competition from both inside and outside the field, and the rise of value-based reimbursement are gradually—and sometimes swiftly—transforming the market.
The current and unrelenting turbulence of the market raises an uncomfortable question: if a provider organization suddenly finds itself in a challenging financial situation, would it surprise the executive team and board of directors? Or had they seen it coming all along, but didn’t know how to stop it? The answers matter. Surprises are a failure of planning, monitoring, tracking, and adjusting current plans to changing realities. Lack of action speaks to a lack of insight and a lack of foresight. Either way, building, tracking, analyzing, reporting, and acting on necessary financial metrics are all necessary for achieving and maintaining financial sustainability.
Getting ahead of the game by building financial sophistication into an organization’s operations means knowing which financial metrics are critical for tracking financial strength, the implications of changes in trends of those metrics for both strategy and operations, and how to use those metrics to make meaningful “real world” changes to how services are delivered. This knowledge can support the agile decision-making and necessary changes to organizational planning that are needed to keep the entity in the black, especially during times of market turbulence.
For CFOs to reach beyond budgets to effectively partner in leading their organizations, they need strategies and tools to guide financial decision-making that informs operational and strategic directions. First, the finance team must invest in the tools and staff to build and track the “right” metrics to measure performance and manage for efficiency. Then it takes a team that can regularly review the metrics and make strategic adjustments to current plans as required by the organization’s performance and market circumstances. And finally, it requires investing in systems that can optimize financial processes and scale with growth.
The focus of this CFO newsletter addresses just that. In our first article, Diagnosing Financial Health: Metrics Meet Information Literacy, we look at the nine metrics that are critical for diagnosing financial health, while also exploring the equally critical need for executives to have the data and information literacy needed to get the most out of the metrics.
In our second article, Technology-Enabled Financial Health: A Strategic Framework, we dive into the six tech platforms that, when integrated, are critical for successfully managing the metrics and ensuring operational readiness. The key is to align the technology strategy with the organization’s broader strategic vision.
We also present a case study this month, Building A Foundation For Resiliency & Financial Sustainability: The Volunteers Of America Minnesota & Wisconsin Case Study, that reveals these financial management principles in action as a method for building a foundation for long-term sustainability and resilience.
And finally, we have a summary of a recent podcast from ContinuumCloud, Leading In Turbulent Times: Why Financial Strength Requires More Than Numbers, that spotlights how balancing mission and margin has to be more than “the numbers” but also takes executives who can manage in a crisis, innovate, and demand accountability.
The 2025 OPEN MINDS CFO Consortium, sponsored by ContinuumCloud, is an opportunity to take that conversation further—connecting with finance leaders across the sector to share insights, surface pain points, and explore technology solutions that align with mission and margin.
