The relationship between a CEO and CFO is one of the most vital partnerships in any company. In the almost two-years since assuming my co-CEO role, I have come to even more deeply appreciate the value a CFO brings to a business and the immense complexity of the job.
Technology Provides the Finance Essentials
I depend on our CFO for three essential things (of course there are others but I will focus on these three):
- The financial and operational data needed to effectively run our business
- The reporting and supporting communications required for financial compliance, as well as for keeping our board and other stakeholders well-informed
- For strategic insights and guidance, decision-making support, and what I call risk sensitivity – the ability to help identify potential risks (and opportunity) lurking around corners and insights into potential impact via what-if scenario planning.
Technology Brings Confidence
You don’t become a CEO without a certain level of self-confidence. I am confident in my knowledge of our business and my “gut instincts.” But it is monthly re-forecasts, what-if scenario modeling, and daily monitoring of KPIs that inform my decision making process. My business knowledge and instincts supplement the decision-making process; however, they don’t drive it. Like most of our customers, we operate in a hyper-competitive market where change is a constant. Annual budgets, monthly reporting, and gut instinct – no matter how good – just aren’t adequate for decision-making in today’s business climate.
As I’m sure you would expect, we use Tagetik as our sole Financial Performance Platform. Without it, we would have to hire several more accountants and IT staff to do the work that our small finance team accomplishes. And even then, the quality of results, timeliness, and “anywhere” access of information would be missing. As a global company doing business in multiple fluctuating currencies with a business model that includes direct, distributor, and partner sales, the need for confidence and transparency in the data is essential. If I’m on the road and accessing results on my iPhone, I don’t have the time to confirm that the numbers accurately reflect currency impact or intercompany eliminations. I have to have full confidence in the data I see or I will not use it. With Tagetik, I have that confidence.
Technology Aids Agility
In addition to helping me keep the company operating smoothly and according to plan and meeting the financial compliance requirements of more than 50 countries, I rely on our CFO and our finance team to help me identify new business opportunities, find ways to increase our profitability, and ensure that we’re continually satisfying our customers. By tracking and monitoring important KPIs, the team gives us early warning when something important goes amiss or is trending in the wrong direction and helps us respond immediately. Such agility would not be possible without our financial technology.
Direct Conversation Is Still Critical
However, one of the biggest things I’ve learned over the last months is the importance of ongoing collaboration between a CEO and CFO. Technology certainly can support collaboration, but you also have to have real conversations. Our CFO knows our business and growth strategy intimately, and I rely on him for his insight and advice. I frequently use him as a sounding board for ideas and the associated financial implications and risks. We brainstorm on a regular basis. We don’t always agree, but I always know he has only the best interests of our business in mind. I also know I can totally trust the information he and his team provide to me and the Tagetik board. This mutual trust is incredibly important to virtually every significant business decision we make.
There’s no doubt my CFO makes me a better CEO and our company a stronger one.
Read the first post of the series
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