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Collaboration Between the CFO and CEO

To effectively grow and scale a business, the following key items must be present: strong, decisive leadership, strong partnerships that extend beyond organizational boundaries, and the ability of a CEO and CFO to identify good business opportunities to take full advantage of. A strong partnership between the CFO and the CEO can help companies not only adapt to the continually changing business landscape, but thrive in it.

When new opportunities as well as threats, such as the growing digital landscape, are transforming whole sectors and causing CEOs to question their strategy, operational model and team, CEOs need a solid ally and trusted business partner by their side. One such ally is the CFO, who is a knowledgeable and strong advocate and support for growth.

Expert CFOs can and should be, strategic advisors to the CEO. CFOs are acutely aware of where the market and competition is heading, as well as having unparalleled financial and strategic insight into their company.

Increasingly, CFOs are participating in greater collaboration and involvement in corporate strategy with the CEOs, in addition to being cost discipline champions and overseeing the management of cash flow and budgets.

CFOs should strike a balance between control and growth. They need to be able to display agility and flexibility — both personally and organizationally, as the organization’s strategy and economic situation are continuously evolving. CFOs that have successfully made this transition to business partner are those that have taken a step back from just finance operations, to also focus on taking a strategic view on how they build and structure the entire finance function.

To partner in a strategic way with the CEO, CFOs need to redefine the principles of the finance function. They need to ensure the larger finance function has a balanced skill set that covers cost control, treasury, analytics and strategic forecasting.

For CFOs to maintain their role as a key ally to the CEO, CFOs must always be at the table during key discussions and asked for their input on strategic decisions. Organizational boundaries and a lack of demand from CEOs for insight from finance into strategic issues can be barriers preventing a closer relationship between the CEO and the CFO.

The responsibility on the CFO to become a value and creation-focused business partner to the CEO falls upon them both. So what does it take to become trusted allies? Commitment must be made by both parties to strengthen the CFO-CEO alliance:

CFO commitment — Develop the right strategic skills and mind-set and build a finance function with the right balance of skills to give the finance leaders the breathing space to step away from the details.

CEO commitment — Break down the organizational barriers and rethink the contributions they require from their CFOs.

While not all CFOs are involved in the implementation of technology, they do hold enormous opportunity to play an important role in the selection and standardization of software as a service (SaaS) business applications within their organization. Some of the digital priorities that both the CFO and the CEO can work together on include:

1. Use data analytics to gain greater strategic insight, measure performance and respond quickly. CFOs are uniquely positioned to gather and analyze data from across the organization, which can provide an early warning indicator of any potential threats and opportunities.

2. By sharing their insights, CFOs can help the CEO and the organization better develop strategic responses and consider pre-emptive changes to the business model as needed.

Creating a powerful synergy between the CFO and the CEO, and potentially, other C-level executives, can contribute greatly to the overall positive business performance.

If you are a small business or middle market business owner or CEO within the San Francisco Bay Area or Silicon Valley, in need of an experienced part-time CFO to help your company scale effectively, while improving cash flow and profit margins, our highly skilled outsourced CFO services provide direct access to high-quality expertise in a cost-effective manner.

CFO Growth Advisors (CGA) specializes unique and highly effective growth strategies that are tailored to help companies grow more quickly and efficiently while improving sales & profit growth. Contact us to learn more.

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