Be More Effective in Your Financial Decision Making

Work expands to fill the time available for its completion.

That is the first emphasis behind Parkinson’s Law, created by Cyril Northcote Parkinson, a British naval historian, author, and academic. He published an essay in The Economist in 1955 introducing the law, which he meant to be a satirical observation of how some businesses grow and become less efficient over time.

A quick summary of the Law’s main principles:

  • Work expands to fill the time available, aka if you have a certain amount of time to complete a task, you’re likely to take that entire time even if it could be done more quickly.
  • Bureaucracy tends to grow; the amount of people in an organization will increase regardless of the actual workload increasing.
  • Time is often wasted on unimportant tasks, meaning people will spend more time on trivial tasks simply because they have the time to do so.
  • Efficiency may decrease with time, particularly as organizations have more time available for tasks.

Now, some 75 years later, Parkinson’s Law is referenced in many conversations about time management and project planning. CFOs can apply its principles in many ways to improve their effectiveness in financial management and decision making.

Here are a few ideas:

Establish time limits for meetings and decision-making.
Encourage more focused discussions and prevent unnecessary delays. This can improve efficiency and also ensure that financial decisions are made promptly.

Set realistic and concise deadlines for budgeting and forecasting.
Instead of allocating excessive time for these activities, streamline the budgeting process without sacrificing accuracy.

Prioritize tasks effectively to encourage a sense of urgency.
Allocate specific, reasonable timeframes for financial tasks to prevent procrastination—and make sure critical responsibilities are addressed promptly.

Set deadlines for financial reporting cycles.
Make sure that the reporting process is designed to be completed within those timeframes. This can improve the speed of decision-making based on current financial data.

Create realistic project timelines.
This can help identify and address potential roadblocks early in the process—and prevent unnecessary delays.

Encourage efficient communication.
Establish clear communication channels and deadlines for information sharing, and avoid delays in financial processes due to miscommunication or a lack of timely information.

Foster a culture of continuous improvement.
Regularly assess processes and workflows to identify areas where time can be better utilized.

By integrating Parkinson’s Law into various aspects of financial management, CFOs can enhance productivity, streamline processes, and ensure that the finance team operates with a sense of urgency without sacrificing quality and accuracy.

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