As the new Star Wars movie approaches, I recall how much I enjoyed the movies when I was a young boy, and I’ve been watching Star Wars all over again with my sons. The classic scene in Return of the Jedi where Admiral Ackbar cautions “it’s a trap!” caught my ear even more this time than before, because of something that’s been bugging me.
As a CFO I get a lot of calls from vendors promising to cut my costs. Really people? I’m the CFO of the company. Do you really think I need help to cut costs? Think about it. Even a terrible CFO has as their biggest achievement a good record of cost cutting. You know why? It’s easy to do. Even if you just had a protocol droid from Tatooine like C3PO running excel as your CFO it would probably do a good job at cost cutting. So are the vendors who message me saying they can help me cut costs telling me that they think I’m worse than a terrible CFO? Insert Chewie growl here!
I know I should not take it personally, it’s just that some people are out of touch with the modern CFO. The things that a CFO really enjoys doing are solving strategic business problems. Identifying ways to grow revenue and influencing change to enable it. Helping to improve customer satisfaction throughout the organization. Managing risk with the appropriate degree of balance by using timely information and analysis. Communicating with customers, partners teams and the community. I just recently read an article from CEB Finance that said they see 3 critical competencies for finance leadership today: Builder, Persuader, Strategist. None of those are “financial” in nature; that’s because the finance stuff is assumed; it’s table stakes. It’s easy to show a business case with cost reduction, because it’s “just” numbers; however, you really need to be a good persuader and strategist to convince your peers or your boss or your board to invest in a project that relies on future revenue growth which is inherently more unpredictable; you needed to have built your credibility in yourself and your teams in advance to pull that off.
Those are the things I want to talk about instead of cost cutting. The kind of vendor I want to talk to is someone who knows me, knows my industry, knows the kind of problems I have, is willing to be flexible and creative in order to deliver solutions, and has the network to bring in experts in a particular niche if they don’t have it themselves. That’s valuable to me.
To be clear, it’s not that cost savings are unimportant; they are important. It’s just that if a project features only cost savings, without the tie in to a strategic initiative that’s tied to an organizational priority, that project risks dying on the vine as it goes up the organizational chain of command. The key is to build an appropriate business case that’s relevant to the company’s strategic objectives. Take note, it’s a business case, not a cost cutting case.
Master Yoda would probably say: “Make a valuable CFO, a cost cutter only does not.”
So heads up vendors, please stop calling me or messaging me about how you can help me cut my costs. I assure you, it’s a trap!
Randy McCoy is the CFO of DataKinetics – the global leader in Data Performance and Optimization. In his role, Randy regularly works with the C-level of Global Fortune 500 firms to provide insight into complex technologies and their operational impacts – leading to thriving, long-standing client and colleague relationships with mutually beneficial outcomes.
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- It’s A Trap - Dec 17, 2015