Strategy is one of the most important aspects of a company and it is essential that everybody contributes towards it. The CFO is a key player in this process as you play a critical role in shaping and influencing strategy.
The modern-day CFO is well-placed to provide a unique financial perspective and knowledge of the performance data to help influence the strategy of the company. You are ideally positioned to provide powerful insights based upon your ability to see the bigger picture, alongside a strong understanding of how your business operates and the key drivers within your marketplace.
In this lesson, we will explore the CFO’s role in influencing strategy and how you work with other members of the executive team to create a plan that will lead to success.
We will also look at some of the challenges that you may face when trying to influence strategy and how you can overcome them. By the end of this lesson, you should have a better understanding of your role in influencing strategy and how you can make a positive impact on your company’s future.
The first step is to develop a deep understanding of the company’s financials. This includes both the current state of affairs and the historical performance. It is essential that you explain the numbers in simple terms so that non-financial stakeholders can understand them. You must be able to tell stories with data and show how different actions have led to specific outcomes.
This knowledge will help you build credibility with other members of the executive team and give you the ability to challenge assumptions that may be made about the business. It is also essential in helping you identify risks and opportunities that can impact the company’s strategy.
Once you have a good understanding of the company’s financials, you need to start thinking about how they can be used to influence strategy. This includes both short-term and long-term planning. You should think about what needs to be done to achieve specific financial goals. For example, if the goal is to increase profits, what actions can be taken to make this happen?
You should also consider the longer-term implications of different strategic decisions. For example, if a decision is made to enter a new market, what are the risks and opportunities that come with this? What are the potential financial implications?
It is important to remember that you are not the only one who will be influencing strategy. Other members of the executive team, such as the CEO, will also have a say. However, your role is to provide a unique perspective that can help shape and influence strategy.
There may be times when you disagree with other members of the executive team on what the best course of action is. In these situations, it is important to be able to explain your position clearly and back it up with data. Remember, you need to be convincing in order to make a positive impact on strategy.
One of the biggest challenges is trying to get buy-in from other members of the executive team. This can be difficult because they may not understand the financial implications of certain decisions. In these situations, you should try to explain your position in simple terms and use data to back up your arguments.
Summary
CFOs play a key role in influencing strategy and it is important that you get the opportunity to contribute. There are many challenges that you may face when trying to influence strategy. However, by following the steps outlined in this lesson, you will be well-positioned to make a positive impact on your company’s future.
