If Your CFO Isn’t Doing These 2 Things, They Don’t Understand Your Business
Running a successful business requires that you have the best insight on where the market is headed and a handle on what your competitors are plotting. On top of that, you need to have a pulse on your own business to be able to drive your growth.
Strategic CFOs have a grasp on your market and business that rivals and challenges your own understanding of what is happening. A CFO partners with other business leaders to connect operations and financial performance.
Strategic CFOs understand the dynamics of your market.
Spending time with customers and trade associations is not just for your sales team. To have a broader perspective on the financial situation of the company, your CFO needs to know it from the outside in.
A CFO may be well-versed in the numbers, but they may not comprehend what those numbers actually mean for the business. When I became CFO of an aerospace and defense contractor, I immersed myself in the industry to better understand how the current trends would impact our top and bottom line. This was a critical step, as having a wider lens helped me to make better pricing and strategy decisions. Without this insight, I could have unintentionally scared away customers by making poor pricing recommendations or providing our board of directors with inaccurate or incomplete information.
Having a broad viewpoint of the market and competitors helps strategic CFOs to be ready with the right information. In today’s world, the pace of change accelerates with each passing day. This in-depth understanding of market dynamics will have an immediate positive impact on your business.
Is your senior finance person absorbed in your market and your industry issues?
Strategic CFOs partner with the business to connect the “shop floor” to the bottom line
A strategic CFO knows that the monthly financial report is only an outcome of what is happening in the business. The most informed view of performance emerges when there is a connection between the CFO and the wider business.
Listening to people at all levels in the business forms relationships, builds trust, and eliminates surprises. As the CFO of a manufacturing company, I gained valuable insights from the shop floor as well as the front office that impacted the bottom line. Having those relationships was key to minimizing surprises and taking advantage of opportunities. Paying attention to the concerns and excitement of people in the business will pay dividends when everyone is looking at your CFO to explain what happened last month.
You can’t explain the business if you don’t understand what’s going on. The relationships I forged helped me to learn of surprises in the business before the CEO—this was key, as I had time to think through reactions and plans. If your CFO is not an active member of the team and does not have a deep understanding of the value chain, you have something to worry about.
Do you trust that your finance partner has a firm perspective of what is happening in the industry and on the shop floor?
Crown CFO consists of experienced and seasoned strategic CFOs that are ready to help you grow your business. If you would like to discuss your business or have related questions, please email me at heath@crowncfo.com.