From CF-GO to CF-NO: the CFO decision-making journey

CFOs focus down to two things: activities that will increase revenue and activities which will reduce costs. Sometimes an undertaking will do both — these are the rare unicorn projects that get fulsome support.

This shows up in the person the CFO adopts in different parts of the cycle. There is the CF-GO, who is the well-spoken cheerleader for growth and expansion, full of metrics that track revenue increase by quarter and year. Then there is the CF-NO — the darker persona that focuses on cutting costs and reducing burn.


The CF-GO assists the business in growing by offering financial advice and support for new investments and projects. The CFO is a tough business partner and an articulate storyteller who can weave the company pitch to show how investment dollars turn into revenue, revenue growth, and ultimately return to shareholders. It’s not that they don’t pay attention to expense management — far from it. They demand a return on what is spent, but the bias is to say “yes”.

The CF-GO is future-focused, constantly searching for new investment possibilities and ways to spur growth. They spend their time offering insightful information and suggestions that will aid them in making wise investment choices and tapping the markets to ensure that all good ideas get proper financing.

The rent

The CFO is always in touch with the capital markets, reading the tea leaves of whether the markets are in greed mode, searching for aggressive growth, or fear mode, looking for defensive investments that will protect their capital. Oftentimes, that signal comes in the form of the rent. Financial markets are simple in sum: there’s a bunch of capital out there to “rent” and its owners rent it to the enterprise(s) that will pay the highest rent.

That “rent” — the academics call it the “required return on capital” — tells the CFO what the markets want. When the rent is cheap…that means the “tenant”, the borrower or the company who raised the capital, can invest in a lot of different things that will pay off in the future. That’s growth mode, also known as CF-GO mode. When the rent is high, the firm can’t afford to invest in everything. In fact, it can’t afford to invest much at all, and instead, the business has to focus only on the most important things.


Markets are bound to turn dark. And when that happens, CFOs put down their pen, stop reading emails, and do everything they can to put the brakes on. They move into their CF-NO job, playing a more cautious role in carefully choosing the very few investments that are worthy of that precious and expensive capital. And they start saying no to the majority of activities that do not correspond with their financial goals, responding to an uncertain business environment.

While the CF-GO is proactive and future-focused, the CF-NO is mired in analysis and questions. They take fewer risks. They slow things down. They don’t just stop supporting things; they kill them dead in their tracks by leaving them hanging in endless approval queues.

The CF-NO uses terms like fiscal responsibility, risk mitigation, and liability management. The CF-NO rejects investment options that may look lucrative but don’t fit with the company’s long-term financial objectives. The CF-NO is brilliant here, coming up with models that demonstrate how the business won’t cover its capital costs with whatever you’re proposing.

Helping the business prioritize its investments is the CF-NO’s main duty. This entails carefully evaluating each investment opportunity to see if it is financially realistic and will aid the organization in achieving its objectives. To enable other employees of the company, particularly senior management, to make informed investment decisions, the CFO must also be able to convey this information to them.

Say “no”

The CF-NO knows when to say, “no”. It’s a crucial responsibility to ensure the firm’s long-term stability. This means keeping tabs on the business’s financial performance, spotting any potential financial concerns, and proactively addressing risks. And it means stopping the patterns of overinvestment that can happen under a more proactive CF-GO. The CF-NO has to make sure the company has enough financial resources to weather any economic downturns or other financial difficulties.

The CF-NO focuses on cost management. It certainly doesn’t win friends, but it keeps people in jobs and companies in business.


Adapted from: “From CF-GO to CF-NO: The CFO Decision-Making Journey”, by Michael Bayer, CFO of Wasabi Technologies (teaches graduate-level corporate finance at Babson College), published on CFO News on 24 March 2023.

Leave a Reply