You may be familiar with the quip: “When times are tough, the marketing budget is the first to go”. If you have any friends in the advertising field, you’ll know that they often feel like they’re walking a long road uphill. “Even when we create brilliant adverts that bring in loads of new business for the company, the CEO dismisses it as an ‘upturn in the economy’”, these friends can be heard to say. “We’re never fully appreciated for our contribution.”
Part of the problem, of course, is measurability. Unless you’re surveying every new customer about whether they’ve chosen your product as the result of an advert, it’s impossible to know – beyond reasonable estimations — whether sales are attributable to an advertising effort or another coincidental external factor. But digital advertising has helped to change this. Nowadays, companies can see exactly how much interest an advert is generating. They can measure the number of clicks, the amount of time a person spends on a page, and – if sales are being driven online – they can often determine whether or not this behaviour translates into a sale.
In a similar way, it’s been historically difficult to determine the impact of a great CFO on a business. If a company does well, it could be due to the combined leadership of the senior management team, or a favourable turn in the environment, rather than thanks to the chief financial officer alone. But nowadays, increased measurability and research techniques have enabled analysts to get a better idea of the impact that a fantastic financial leader can have on your company. Using that rationale, here are some valid (and often un-thought of) ways in which a great chief financial officer can influence your business.
- Find and retain great talent
If you’re looking at hiring a chief financial officer for the first time, chances are that your company is currently growing, and will continue to do so. With the global economy finally on the uptick, projections for the South African GDP are slightly more optimistic for the upcoming years than the last. Absolutely key to your success is finding and keeping the right people to grow with you. And that’s where your chief financial officer comes in.
According to a survey cited by the Controllership Group, 66% of finance chiefs are concerned or greatly concerned about talent acquisition and retention. This obviously applies to the finance department, which your CFO will head up. But it also applies to their savvy when it comes to increasing annual pay and structuring bonuses and incentives for the entire company. A clued-up chief financial officer will know how much to offer to keep employees happy and motivated without putting the company under strain in the process.
- Find the right balance for advertising spend
We’re all well aware that the finance department and the marketing department often view their objectives as separate and almost oppositional in nature. A great CFO, however, recognises the importance of the marketing effort and drives understanding and collaboration between these two departments. As a result, she is often able to determine the optimal amount that should be apportioned to marketing efforts. The payoff is growth at the right time and at the right pace.
- Use technology to create forecasts that are more accurate than ever before
A valuable chief financial officer has harnessed the latest tools that technology has to offer. As a result, he can develop reports based on real-time, rather than historical, information. His forecasts are reflective of the most recent, relevant data rather than outdated material that only offers limited insight for the future. This optimises cash flow and enables the company to save sufficiently without wasting its resources in a cheque account.
A great chief financial officer helps keep staff happy, optimises marketing efforts and budgets efficiently. Contact The Finance Team to find out how this kind of resource can be available to your company on a part-, full- time or interim basis depending on your needs.
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