Earning a Seat at the Table – How to Be a Finance-Led Organization

They want to partner with the management team and help determine the direction of the company.  But how do CFOs achieve this balance?  How do you gain the respect of the organization and take on a leadership role?  These are questions that were answered by the NYC Chapter of the CFO Leadership Council at its February panel discussion titled “Earning a Seat at the Table – How to Be a Finance-Led Organization.”

Led by moderator Bruce Cooperman, Managing Partner at Nereus Advisors, the panel included Peter Lehrman, CEO at Axial, Neal Modi, Head of Finance at Kargo, and Ken Rugg, CFO at Rashti & Rashti.  Here are the highlights of the panel discussion.

What does it mean to be a Finance-led organization?

According to the panelists, this is largely a cultural issue and starts from the early stages of an organization.  CFOs must help the company make the right decisions, and evaluate and assess new opportunities.  Finance needs to be seen as more than just a controlling organization focused on cost cutting.  Besides running the annual budget process, Finance needs to provide information, ask the right questions, and help managers run the business.

A key technique recommended by the panelists was running quarterly business reviews (QBRs) to drive transparency across the business, share information, and get input from other groups on operating decisions.  Organizations need to be Finance-led in good times and bad times.  They need to make required adjustments based on conditions and transitions that may occur.

Leading CFOs can teach the organization to think about the ROI of decisions.  Most employees don’t have the expertise to assess opportunities and returns.  CFOs need to provide this support and guidance.  The CEO should have confidence in the Finance organization to be providing the ROI lens to all decisions.  This includes assessing the return on invested capital of new products, programs, and initiatives.   

How does Finance remain as a leader during transitions? 

bigstock-Business-Woman-876649.jpgIn order to lead through transitions (e.g., reorganizations, IPOs, M&A’s), the CFO and Finance must, most importantly, understand the business goals and objectives of the CEO.  Whether the focus is growth, profitability, cash flow, or other goals, these should drive the focus of Finance.  Finance should try to run similarly in good times and bad times – must be consistent, forward-looking, and transparent.  Some pressures cause extreme situations, but the CFO needs to be the voice of reason in good times and bad.

How to get CEO/founder to support Finance leadership?

This part of the discussion was based on a question from the audience.  One recommendation was to make the focus less about power and more about the business model and how Finance supports the model and helps the company achieve its strategy.  If the CEO/founder is not ready to hear the truth, that’s a big problem.  Investment in Finance needs to match the needs of the business.

In a family-owned business, this can be difficult.  It takes time to build the case for investments in Finance processes and systems.  The CFO must be diplomatic, patient, and persistent.  The CFO plays a bigger role in smaller companies, often playing the COO role.  CFOs must know their audience and adjust based on discussions with the CMO, CRO, CIO, and other executives.  Instead of being a finance conversation, it needs to be a business conversation – CFOs must be curious and consultative.

What roles/tasks have you taken on outside the traditional Finance role?

On this topic, panelists commented that pricing is a critical area for the CFO to be involved.  The CFO doesn’t have to control pricing, but should be close to this process.  Sales compensation is another important area for Finance involvement.  The CFO should also focus on the key area of restructuring the business, evaluating cost-savings opportunities.

Employee recruiting and retention is another crucial area for the CFO to focus.  The CFO and Finance can be effective in reducing turnover and costs if the right programs are in place.  That involves looking at the payback of various employee perks – snacks, gym membership, health, tuition, and so on – and making the right investments.

Software tools or processes that help become a Finance-led organization?

big_data.jpgWith regards to systems and processes, panelists commented that in order to be Finance-led, the organization needs to have strong data integrity and good sources of information to provide to managers and staff.  If this isn’t the case, it can lead to extended reporting and analytical cycles.  The end-user tools are less important – data hygiene is more important.

Panelists also cautioned CFOs to be careful.  No system is 100% complete.  All tools or processes will require some customization in order to meet business needs.  Finance needs to be able to sift out the right information and deliver the right KPIs for running the business.  The system must be intuitive and easy for users – they won’t read the manual.

Data or metric debt can be a big risk.  The panelists recommended rigor around how Finance organizes and shares data and information.  To be effective, Finance needs the right data model – chart of accounts (COA), reporting hierarchies, metrics, and business rules.  Panelists recommended hiring people who are excited about data management and new systems – in other words, data analysts who can crank out the analysis.  Ease of use is critical to drive employee usage.

Culture, communication, processes, and systems

This was a great panel discussion that took on a life of its own as the audience began chiming in with their own questions soon after the panel began.  In summary, being a Finance-led organization is dependent on culture, communications, and having the right processes and systems in place to empower managers across the enterprise with timely, accurate information.  It requires the CFO and Finance to be a strategic advisor, evaluating and assessing new business opportunities, and to be consistent in good times and bad.

Cloud-Accounting_1.jpgAs usual, I’m always looking for the role cloud-based, enterprise performance management (EPM) solutions can play in helping CFOs become more strategic and for Finance to take on a leadership role.  There are many opportunities here, including using EPM solutions to build the annual budget, report on actual results vs. budget, and support regular business reviews.  EPM solutions can also be used to update budget assumptions on a periodic basis, using techniques such as driver-based rolling forecasts on a quarterly or monthly basis.  EPM solutions can also be leveraged to model new scenarios and evaluate new business opportunities.

And with regards to the last section of the discussion on the importance of data integrity – EPM solutions often are implemented as a replacement to spreadsheets and manual processes.  Why?  EPM solutions streamline planning, reporting, and analysis – providing a single source of the truth for decision-making.  They can integrate data from multiple systems (ERP, HCM, CRM, etc.) and provide a common chart of accounts, reporting hierarchies, KPIs, and metrics that are used for enterprise-wide decision-making.

To learn more about how EPM software helps reduce reliance on Excel and improves Finance processes, check out the white paper “5 Signs You Are Abusing Excel.”

Download My Whitepaper

Latest Posts


Interviews, tips, guides, industry best practices, and news.

Get Started with Planful

  • LinkedIn
    How much time will you save?
  • LinkedIn
    How will your finance team evolve?
  • LinkedIn
    Where will technology support you?