3 Things Strategic CFOs do to Galvanize Business Growth
New ideas are always on the horizon and you as the business owner or CEO need a partner that can look at them through a different lens to understand their true value to the business.
A strategic CFO is constantly open and receptive to new opportunities that will exponentially grow the business. It’s equally as important that this person knows that the budget is important, but it isn’t the only thing that matters.
Your finance partner must understand that new areas of growth are required to deliver profit and your finance professional needs to be focused on making this growth happen by holding your team accountable.
When you need a partner that is receptive to new opportunities and can drive ideas into profitable initiatives, turn to a strategic CFO.
While the CFO builds and monitors the budget, you must remember that it is just a plan, an expectation, or a guess. No one in your business has a crystal ball to tell you what will precisely happen over the next 12 months.
As new opportunities arise, they must be evaluated. You may be thinking that this is just common sense, and I would say that it is. However, if your finance partner is laser focused on budget execution, they will miss the surrounding opportunities. Strategic CFOs are absolutely looking at the budget, but they don’t let it distract them from business growth. They are always processing new information and determining the impact to the company.
To better accomplish this, strategic CFOs use flexible forecasting to build a better story of what is happening in the business environment. A flexible forecast can be done quarterly or even generated monthly, but the point is that the CFO is adapting and taking in new information to help you capitalize on opportunities.
If your finance professional only talks about the budget, do you think your team can really move on new growth ideas?
2. Strategic CFOs don’t make ‘no’ their default answer
CFOs can get a bad rap for being an automatic “no” on new spending.
Strategic CFOs know that it is not about saying no to everything but saying yes to the opportunities that will grow the top line and the bottom line. A strategic CFO will challenge the merits of the opportunity to ensure that it is not a shiny object but has real profit potential.
Your finance partner must see how your vision and strategy can become a reality. When I was the CFO of a growing manufacturing company, we decided to move our facility and double our production capacity. This was a tough process as this big change would not pay off immediately. We knew the growth in business was coming, and we knew that we had to have more space to make it work, but we just couldn’t fully see the uptick on the horizon yet. The easy (and wrong) answer would have been to say we should wait until we have the business to think about expanding. Had I done that, we would not have grown in the way we did.
Just because a CFO is receptive to new business opportunities, doesn’t mean that they are abandoning any bottom-line discipline. The art and skill is in being able to do both. Big growth initiatives like expanding a facility require discipline, but also vision.
Do you have a partner who stands with you and is bought in to your vision?
3. Strategic CFOs hold the team accountable to their growth goals
Seizing an opportunity can be the easy part—turning that into real profit dollars is where the rubber meets the road.
The saying “if everything is important, then nothing is” has much truth when it comes to holding people accountable. Even just establishing key performance indicators and metrics is saying that THESE are the things that matter and that other priorities are not as critical as what we are doing right now. Your finance partner needs to be the one establishing the cadence of reviewing the right KPIs to help you focus on the big things.
Monitoring the progress on opportunities helps get buy-in from the team, and that drives performance. Strategic CFOs know that they need to help the team recognize progress or lack thereof on opportunities to get to profit faster. They are in a unique position to see the lay of the land and can communicate what is and is not working on new opportunities.
Is your CFO helping you to hold the team accountable to deliver results of growth opportunities?