When you’ve got a great CFO, it’s tempting to keep her siloed in the “money corner,” slaving away in Excel and making projections. You rely on her to monitor cash flow and paint an accurate picture of your company’s financial health — now and in the future.
To most CFOs, business intelligence means being able to assess the company’s finances. But only looking at marketing metrics, sales numbers, etc., doesn’t mean they completely understand them. If your CFO isn’t engaging with business metrics at a departmental level, she may be missing the bigger picture.
When CFOs are only focused on the company’s financials, they can develop tunnel vision and miss crucial aspects of the bigger picture. Giving your CFO a deeper connection to other business metrics can broaden her understanding of the company as a whole and help her make better predictions for the future. Here’s why:
It gives meaning to the numbers.
When you strengthen the connection between CFOs and business metrics, the numbers they’re dealing with every day make more sense. And just as an educated customer is more likely to make wise purchase decisions, a more informed CFO will guide you to make more intelligent financial decisions.
For instance, when a CFO sees a drastic decrease in revenue, she might communicate that to you and evaluate where cuts can be made. But if she has a strong understanding of what’s being done to bring in new customers, she can communicate to the entire team that the new tactics aren’t working.
It connects your CFO to your team.
When CFOs are more connected to metrics at a departmental level, they can make more informed decisions for the company as a whole. For instance, if a CFO has access to department performance metrics, she can easily identify whether departments are on track to reach larger company goals and identify potential cash-flow problems at their source.
History predicts the future.
Only looking at the company’s financial data in the current market landscape can skew projections, but if you supply the CFO with business analytics, she’ll be able to view the current financial status in a historical context and use this to more accurately predict future trends. For example, being able to see the peaks and troughs of competitors’ performance will help a CFO predict your own company’s trends.
How to Strengthen Your CFO’s Connection to the Metrics
Information is power where your CFO is concerned, but bringing her focus down to the departmental level to understand a range of business metrics will be a big shift in thinking for her.
Here are five strategies you’ll need to remove the blinders and give your CFO a panoramic view:
1. Create a new information chain.
Even at a startup, your team members might envision your company as a kind of ladder or funnel, with department heads feeding information to the CEO. But you need to create a different kind of information chain to foster a more productive, collaborative approach. Your CFO should share her insights with you, but she should also share them directly with other departments — and vice versa. Your metrics will quickly become more integrated and meaningful across the entire company.
2. Foster collaboration between CMOs and CFOs.
This new information chain requires a collaborative attitude and atmosphere between your departments. Explain the importance of connecting to your team. Make more time for group activities and discussions, as well as interdepartmental communication. Ask every department the same questions about big-picture metrics, for example, “In what areas of our business is growth possible?” Giving everybody the opportunity to engage with metrics will encourage teamwork and intelligent decision-making.
3. Adjust until habits are formed.
As you implement this new approach to analytics, take an active role in facilitating collaboration. If you notice that two departments haven’t made much contact throughout the week, spur this connection yourself by starting a discussion or organizing a meeting for them to share their insights. Small adjustments will help you make effective habits second nature.
4. Develop your own capabilities.
Just because you’re the boss doesn’t mean you have a strong understanding of all the information yourself. You also need to work to develop your own cross-functional habits.
5. Make metrics highly visible.
When you encourage CFOs to become more aware of the “big picture” of your business, expect a learning curve. If you want your team members to act on certain metrics, you have to physically put those metrics on display. Make them highly visible in the office, in meetings, and on your employees’ dashboards to build that metrics connection day by day.
By making gradual adjustments, you can open up your CFO and the rest of the team to the exciting world of business metrics and give all your employees the power to become masters, not just of money, but of every aspect of your company.
Asha Saxena is the president and CEO of Future Technologies Inc., an international data management solutions firm. FTI’s Center for Analytics Services (CAS) provides data management and analytics solutions through business strategy and technology development. Through a pre-built data model, FTI CAS takes complex information and helps crystallize KPIs into user-friendly dashboards. FTI CAS also specializes in healthcare, analytics, and higher education consulting.