watering can pouring molten gold

The CFO as Catalyst for Growth

How CFOs can drive change and create value.

Kurt Kuehn | UPS

As demands on performance continue to increase, corporations and professional firms are realizing that chief financial officers can be catalysts that drive change and create value. The CFO’s knowledge of finances, coupled with an intricate knowledge of the business, helps bring a new level of strategic thinking to any company.

Pullquote share icon. Share

The CFO also must challenge his staff to determine if the processes in place promote or hinder the business.

As the chief financial officer of a multinational company, I know this expanded role can be a blessing and a curse. It also involves change. Some will embrace it; others will find it uncomfortable, if for no other reason than change is not something that comes naturally to many CFOs.

The curse is that our primary responsibility – to report high quality, rigorous financial statements – is still a critical function if our companies are to perform at their best. That’s our “day job.” When we do it well, we help revenues grow, we keep cash flow strong and the balance sheet in good shape.

However, providing these essential finance and accounting functions don’t necessarily drive business growth. The CFO must develop the most efficient ways possible to provide these functions, relying heavily on key professionals in the organization to help standardize and automate processes that will achieve maximum efficiency.

The CFO also must challenge his staff to determine if the processes in place promote or hinder the business. Questions to ask: Do everyday functions, such as billing, flow through the accounting process quickly and efficiently? And do processes facilitate growth or slow it down?

Once the CFO has established this base of operations, the ball is now in his or her court to advance the organization in more strategic ways. When we drive company strategy and create value that makes business healthier and more successful, that’s when we really earn our pay.

Pullquote share icon. Share

When we drive company strategy and create value that makes business healthier and more successful, that’s when we really earn our pay.

Unique perspectives

Today’s CFOs bring a unique and varied perspective to their organizations.

First, the CFO has a bird’s-eye view into how revenues and expenses flow, how cash flow moves and how the balance sheet changes. The ability to understand and analyze this information gives the CFO a leg up on nearly everyone else in the organization.

It means we can often see the best moves available to the company and provide insights into strategy that other top officers cannot. By understanding the core mechanics of how a business creates value, the CFO can provide valuable input into a company’s most important decisions.

Next, the chief financial officer can take a leadership role by sharing our perspective and insights with other senior managers and executives. These actions will build credibility and demonstrate how the finance and accounting group can help drive businesses run by these executives. Once we share our expertise for the overall good of the organization, the CFO becomes one of the most trusted and valued members of the team.

Keeping a wide range of perspectives

As the CFO takes on broader responsibilities, it’s important to understand the business from a wide range of the perspectives. The top financial executive needs to have a sense of how customers view their product or service. They also need to know how people within their own organization are affected by internal financial decisions.

Pullquote share icon. Share

Once we share our expertise for the overall good of the organization, the CFO becomes one of the most trusted and valued members of the team.

The best way for CFOs to gain varied perspectives is to serve in roles outside of finance, so they experience the impact of their decisions on the organization. For example, I headed UPS’s sales and marketing group for several years. Dealing with hundreds of customers helped me better understand the impact of our company on their businesses and how we could add value.

I was also there, on the front lines, when our finance group came up with new ideas or processes that frustrated the sales and marketing group, as well as our own customers. Having walked in the shoes of both groups, I think I weighed options and consequences a little more carefully. The benefit is understanding how your actions affect the customer experience and the impact your decisions have on the sales team.

Armed with knowledge and experience, the CFO can become a tireless proponent for changes that help accelerate growth. The changes can affect the entire company, ranging from decisions about products and services to outsource to which processes should remain inside the company because they’re strategic.

The role of growth catalyst may be new for many CFOs, but it’s one we are well suited for and one we should embrace. goldbrown2

KK
Kurt Kuehn is the former CFO of UPS. He retired in 2015

Click the RSS icon to subscribe to future articles by this author. RSS Feed

Reuse

We welcome the re-use, republication, and distribution of our content – just as long as you credit us. So we ask that you insert the following tagline when you use our content:

Reprinted with permission of Longitudes, the UPS blog devoted to the trends shaping the global economy.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s