As the first pillar under our CFO on Demand or Part-Time CFO service, Strategic Finance is an important aspect of our business partnering.
Strategic Finance involves a holistic look at the business model, product market fit, and a continuous focus on optimizing the business operations and strategies to leverage changes in customer expectations. There are many incremental forces over time that can impact the growth of any business. Changing customer requirements brought on my new technologies, economies of scale, changing preferences, climate change, efficiencies and a whole host of other factors. Strategic Finance is an attempt to allocate limited resources and utilize them in the areas that will generate the best long term benefits by prioritizing tasks that generate the highest Return on Investments or enable the organization to get closest to their objectives.
Strategic Finance also includes validating existing assumptions about the existing operational capabilities, product market fit, customer expectations and determine whether the current course and the trajectory of the business is heading in the right direction or needs course correction to be where the market is expected to be in the next 2-5 years. Flexibility, adaptability and focus on the customer at all times is critical to ensure that the business remains relevant and investment dollars are maximized to generating the highest returns.
If the CEO is the pilot of the business, then the CFO wearing the Strategic Finance hat is the navigator to ensure that the business is heading to the right destination.
Strategic Finance involves a few components
For business partnering to work effectively, three things are important.
- A seat at the table – where decisions are made jointly in a constructive dialogue
- open, honest and real-time communication and
- integrity – to establish trust in any relationship.
There is a fourth very important item – which is skin in the game which then creates the right incentives for the advisor via an equity stake to ensure that the CFO on Demand has the interests of all stakeholders at heart when making decisions.