The role of a CFO is changing. From someone focussed on the numbers, to a person who more and more is required to focus on the growth of a company. Traditional financial control is nowadays not enough as more and more automated solutions take over the basic work. With good analysis of the data you have available new insights are created. The role of the CFO has never been so dynamic as it’s now. Traditional views are slowly being replaced by dynamic 360 views of your business operations and agility. Powerful Free and paid BI services are available, bringing a different dynamic to analytics.
The continuous balance between taking risk and mitigating risk has a thin line. It requires continuous focus on your ability to fund the risk you are taking as in most cases the higher the risk, the higher the financial benefit. What can you do as CFO to ensure your risks are educated ones, and how can you in the changing environment you operate make sure that your policy stay’s in line with the growth objectives.
Is your growth strategy based on real facts and figures?
This is an interesting question as often growth strategies are based on last years number + XX%. Understanding the growth rate of your product is one thing, but having a clear view on the market sizing and competition is another. If you are the best in what you do, tomorrow you probably won’t anymore. Ensuring you make the right decisions and derive the right KPI’s to measure success, requires you to partner with all parts of the organization.
Financial versus operational focus?
Investments are often based on product improvements, Personnel cost, business strategy (As far as you really have one), Emotion…. You’ll see that when you ask your sales business partner where they see growth, it will often be based on what they have experienced in customer meetings in the past months, and mainly focussed on what they lost. Driving product growth analytics, and supporting them with customer benchmark analysis (Which customers are large, grow and stable, and mirror them on your target market) will help you be the trusted advisor.
What about Marketing investments?
A key pilar in growth is how your brand is perceived by your audience. Although Marketing is not something which is easy to measure in respect to new customers, It is an important tool to make sure customers understand your brand, quality and solutions. Marketing can make of your brand perception a key differentiator, without resulting in direct hard financial measurement. Making sure you use their persona information in defining if a certain investment still is in line with your customers expectations, is an important asset when building the business case. As CFO you will need to get more involved in understanding the branding behind the product/solution you bring in to market to validate target groups and future opportunities of growth. Making sure your marketing investments drive the correct outcomes and their business cases are sound and in line with your business ambitions, requires a broader view then just the financials involved.
How close are you to your services organisation?
Service organizations are the first place where customers arrive when things are not working well. We always recommend your service department to be part of understanding which investments are required to make customer successful. The key data points they deliver, can help get insight in future needs of customers. IN addition the better the service, the more loyalty you gain from your customers. Take a critical look of pending your business model retaining customers does not prevail over just gathering new customers. Your investments in retention and digital dynamical solutions, can pay off more on the short term.
Building a customer centric/Intelligent business case isn’t easy, It requires thinking out of the box and involving the organisation.
Above we touched just on a few internal sources which you can use to gather information and validate if the investments you are agreeing too, are the right ones. It’s not just number crunching which will get your business case valid. It’s also looking at to less obvious (non tangible) sources within or outside your company, which will help drive the growth business case for your company.
About the author: @Rahim Gulamali Strategic Customer Experience focussed Transformational Leader with outstanding track record across BPO, Strategic Change Management, Corporate Risk Management, Information technology, Technical and Financial Project Management. Proven track record in; designing, guiding, clarifying and completing (international) strategic programs; motivating teams and individuals to deliver; streaming and energizing existing business processes where People drive/own the success.