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The Value Of The CFO As An Operational Partner…

June 11th, 2014

For those that have followed my posts over the years, I have always been a strong advocate of the CFO not just being the financial partner to other functional areas, but a true operational partner. It was great to see the recent article in CFO.com, “Double Duty”, outlining the trends of CFO’s assuming the role of COO.

http://ww2.cfo.com/leadership/2014/05/double-duty/

While some might view additional title as a bit of a “land grab”, it really comes down to the CFO’s desire to partner with the other stakeholders in the company and provide as many tools and insights, which are aimed at increasing the financial & operational performance of the company. One of the statistics mentioned in the article was the decline of the COO role at companies, which fell from 48% in 2000 to 35% in 2013. As one person interviewed mentioned, It was a layer of management that caused the CEO to be a step removed from the business at times”. While it will not always be the CFO that necessarily assumes the COO role, it will really depend on the type of company and the how specialized the underlying COO responsibilities are. However, as I have also mentioned in prior posts, it’s critical for the CFO to be involved in the daily operations of the company in order to quantify what the developments or strategy changes will mean to the Forecast and reported financial results. It’s about working with the broader team and ensuring that the deployment of resources are appropriate to support the mission at hand and that all areas are aligned in their execution. By being involved at the operational level it’s pretty easy to see where promises are being made to customers, timelines are being communicated, and expectations placed on internal resources, and if all the parties aren’t working together….then what that will mean to the actual achievement of the Forecast.

Whether my role has been at a mission critical IT infrastructure company, Retail and Apparel, or now Security, the focus has always been on ensuring that Finance is truly operating as a strategic business partner to the other functional areas. While there was always some level of resistance in the beginning, it ultimately developed into a great relationship and one that was valued on each side. In instances where that wasn’t the case, then it was usually due to underlying agendas and actions that weren’t ultimately in the best interest of the brand or company.

My involvement from an operational aspect has also been to achieve further clarity to all the inputs contributing to the achievement of the Forecast. The worst disservice a CFO can bring to an organization is to treat the forecasting process as simply a spreadsheet exercise driven by assumptions cells that are updated to provide the desired output and then push out the changes to the rest of the company. It’s about being involved and knowing if the assumptions are achievable, sustainable, and if not in the long-term, are there operational changes that can be made to ensure they are.

Part of the value I’ve always strived to bring to a company is the implementation of both financial and operational platforms that deliver sustainable results. Results that are not the product of short-term or one-time low quality deals or internal cuts, but platforms that create longer term relationships and financial results. In the end, happy customers that are properly supported by their chosen partner…us.

One of the closing points brought up in the article, and one I’ve also always tried to see realized, is the “CEO understands that the overall risk to the company will be diminished if the CFO has some direct involvement”. If you’re ultimately striving to operate in a “company first” environment, then it’s not just the CFO that can provide this value, but every member of the team.

Thanks for reading…

Jeffrey Ishmael

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