Guest column, Jon Strudwick, Chief Financial Officer at MPP Global, discuss how CFOs acts as a bridge across different silos in the business, to better understand customers’ needs
I’ve worked in corporate finance for over 25 years. That’s basically five lifetimes in the internet world, where the last handful of years has seen so much disruption, it’s hard to recognize half the industries we’re now working in. (Free smoothies on the job has definitely been a huge step in the right direction, however.)
But in the same way that the lines dividing industries have begun to blur, it has also happened in once tightly-defined roles, like that of a CFO. At its core, a chief financial officer’s job remains monitoring costs and driving growth. But it comes with a greater—and I’d say more positive—focus on the role both customers and employees play in bringing those goals to fruition.
As companies grow, either through size complexity or the desire to get external investors involved, they require wider financial flexibility. This isn’t surprising, but accessing that today is about more than tightening costs and finding new opportunities. It’s about ensuring we can coherently communicate our promise, from the newest employee, to the oldest client.
A CFO will always need to come in bearing key business drivers and a clear business strategy. But the role today also acts as a bridge across different silos in the business, to better understand customers’ needs and how we’re meeting them. So how do we get there?
As in love, so in business: Be a good listener.
Bridging the cultural barrier between departments like sales, marketing, IT and accounts sounds like an impossible task, something akin to learning four different languages overnight. But it’s critical to remember we’re dealing with people, not robots. People understand you don’t know everything about what they’re doing … and they respect you more when you are honest about it.
The best way to gain credibility within silos is to have a baseline understanding of what a person’s job is. When something isn’t clear, clarify that immediately—don’t be afraid to tell someone you need simplified topic information from them.
The client is central to everything we do.
Last week I was talking to our developers about a client issue. The biggest point of conflict was that they were approaching the problem from an architectural point of view; the attitude, understandably, is “I’m here to build a solution and solve a problem.”
My role was to help them see the commercial perspective. I put it in simple terms: Who pays you every month? Who gives that company the money to pay you?
The people who pay everyone’s salary are the people buying our product and our promise. So what our developers—and everyone else in the company—do for them is critical to ensuring they go on sustaining us. It gets everyone paid at the most basic level. And when clients are happy with the baseline product, its much easier for sales teams to win business.
Focus less on business development and more on client happiness.
From a practical perspective, it’s simply cheaper to retain existing clients, and keep them happy, than it is to expend energy winning new business to replace clients you lost. Long-term clients are also likely to pay more for the service and updates. They are literally building the business with you … and their happiness, of course, results in word of mouth, and more organic sales. That makes a happy client more valuable than an advertising and sales investment combined.
When I was a business solutions purchaser, the first thing I would do was call an existing client to get an honest opinion about the company. Knowing whether my peers believed the solution was good made a huge difference in my buying decisions. Indeed, 92 percent of customers credit word-of-mouth recommendations as the top reason they purchased a product or service.
This makes both customer service and product quality critical for the future of our business. And we’ve managed to plug the importance of peer opinion directly into our model, using workshops in which clients can talk about the product to each other.
There is only so much you can learn by talking to a customer support representative. But when you’re talking to another user, you’re talking to someone who’s encountered similar problems you have. As a company, listening to those discussions is infinitely valuable: It tells us what we’re doing well (and what we should more clearly promote) and where we must improve, and at what level of priority.
There is nothing worse than ambiguity in a company.
Ambiguity is the biggest killer to growth. This applies to everything, from what a sales guy on the ground thinks is happening, to what investors think about your future prospects.
For this reason it is critical to maintain transparency and clarity between departments, ensuring nobody has an opportunity to “invent” a potentially worse story about why a given decision was made. Client-side, this means being open about our plans for growth and long-term intentions: The worst thing a growing business can do is take investments out of the baseline product and start packing it aggressively into sales or advertising. That signals to the client that retaining their business is less important than winning new ones.
On the investors side, a CFO also has a responsibility to clarify both where a startup has been and where it will go. Client retention isn’t exactly a “sexy” pitch, but my job is to demonstrate why it makes long-term sense in an “incredible” fashion. So when I put processes in place to evaluate long-term financial opportunities, I do it from this perspective: How does it make existing clients happier and create more cohesion between employees
The trick to selling this notion to investors is to establish the idea that it is more disruptive to be a stable long-term player. Today, over 90 percent of startups fail within the first year, and over half won’t make it to the next four years. The biggest reasons for failure can be attributed to lack of planning or the emotional behavior that comes with coming into lots of money too quickly: Pricing strategies that lacked forethought, living too high for the business to manage or simply failing to pay taxes
The job of the CFO is to ensure none of this happens. That hasn’t changed. What has are the expectations people have for the companies they want to succeed. I’m not here to run numbers. I’m here to ensure that everyone understands their role in our success, and that we keep our focus where it should be: On the people who’ve trusted us enough to invest in what we do. They are literally the only reason we are here.
Jon Strudwick is Chief Financial Officer at MPP Global. With over 25 years’ experience in the technology and payments markets, Strudwick is responsible for advising the company’s board of directors about growth opportunities, overseeing all fiscal reporting and risk management activities and managing the accounts team. He is a qualified member of the Chartered Institute of Management Accountants (CIMA) and a Chartered Global Management Accountant (CGMA).