- 28 de November, 2023
- Posted by: Filipa Ferreira
- Category: CFO
There’s a common misconception among business leaders that CFOs are focused entirely on financial statements and always looking at the bottom line. But in today’s world, there’s more than one bottom line and more than one way to get there. We’re all looking for an edge — either a way to get ahead of the competition or improve our performance — and comprehensive performance data is the key to finding that edge.
Availability and analyzability
At their fingertips, most companies have data measuring every part of the customer experience, from acquisition to engagement, performance, and attrition. We also have smarter tools to help us analyze that data with the help of artificial intelligence and machine learning.
All of this has produced two major shifts for the CFO. First, inputs from so many different places can revolutionize our decisions. Instead of waiting for data that is backward-looking, we have the potential to invest in near real-time information. To make the most of all that data, we must stay connected with the tools and know-how to analyze it. Anything else is just asking to be left behind by the competition.
Second, CFOs must become experts in more than just finance and contribute to the company more broadly. In a complex market where small businesses and large corporations manage across multiple sales channels, compete for talent, and make financial decisions to grow their business, the world is more centered around data than ever.
Here are five steps to help get a handle on your data and make the most of it for your company.
- Commit resources to data quality
It bears repeating that companies that fail to prioritize data will be left behind. They need to reflect that value in hiring decisions and investment in tools. Hire data-savvy people early on and equip them with the technology to capture, see, and analyze data efficiently. This will result in high-quality, usable data that will move the company forward and lead to much better decision-making.
- Align the team to what’s important
CFOs can be inundated with data, so know where to focus. Make strategic choices about the metrics sacred to the sales and marketing funnel, customer satisfaction, and profitability. Once you know what to track, align the team around those numbers so everyone is on the same page. There’s nothing worse than monitoring metrics that don’t align with goals or having your teams pour effort and time into work that moves the wrong needle.
- Agree to regular reviews
We all know that setting goals only helps if you track your progress. In the same way, monitoring key metrics in your data is only useful if you review them regularly. Determine the best frequency for these reviews and who needs to be involved. Stick to that schedule. Remember, just because you have data does not mean you have to review it daily with your team. Give your data time to bake so that your reviews hold real meaning.
- Choose your battles
With the right people on the team using the right tools, you can be confident that your data is accurate. That frees you from doubt and lets you foster healthy debate around what to do about the data, not the data itself. This is an easy point to gloss over, but it’s key to the power of good data. With a shared understanding of what the numbers measure, you can focus time and attention on building strategies and taking action.
- Commit to action and track the progress
All of the above move the team or organization toward an ultimate goal: a culture that embraces the discussion and evolution of strategy. Data makes it possible to see shifts beneath the surface; in some cases, it can even predict them before they arrive. Meaningful progress comes from embracing those shifts and taking committed action as a result. That’s how the data-driven CFO becomes a driver of results.
Adapted from: “The Data-Driven CFO: 5 Steps to Unlock Financial Data for Growth”, by Ben Goodyear, chief financial officer of Pipe, a modern capital platform for recurring revenue streams (before joining Pipe in 2023, he was CFO of Mailchimp, finance director of Intuit’s small business and self-employed group, and senior director of North American business operations at Visa), published on CFO News on 19 September 2023.