The CFO'S Perspective

How to Strategically Invest in your Business During a Downturn

A recession or downturn in the market is one of the most demanding scenarios for senior leadership to weather because there are so many possible responses to consider. Each decision leadership makes during this critical time can have a significant effect on the company’s ability to come out on the other side at all, let alone seize available opportunities to grow in the process. So, how can you strategically invest in your business during a downturn to increase the likelihood that it will be able to emerge stronger?

It is critical to act swiftly instead of ignoring the warning signs that a downturn is coming, worsening, or may last longer than anticipated. However, that does not mean giving into kneejerk reactions. A Harvard Business Review article summarizes it best by saying,

“Inaction is the riskiest response to the uncertainties of an economic crisis. But rash or scattershot action can be nearly as damaging. Rising anxiety (how much worse are things likely to get? how long is this going to last?) and the growing pressure to do something often produces a variety of uncoordinated moves that target the wrong problem or overshoot the right one.”

Have honest conversations with your leadership team to solicit feedback on how to proceed while leaning on the data. Focus on efforts on strategically managing expenses, acquiring assets to achieve your goals, prioritizing customer relationships, and developing new markets while focusing on your core competencies.

Topics: Economic Trends Leadership Growth Risk Management Strategy COVID-19

When to Use a ‘Decision Tree’ for Business Planning

For those not familiar with the term, a decision tree is a flow chart that works through all possible response options in a scenario to analyze resulting outcomes. Basically, it is a visual version of an “if this then that” statement across all possible alternatives.

The “branches” off each decision alternative that result use data analysis to forecast the most likely outcome of each decision. When one decision leads to another decision that must be made, that branch splits to continue extrapolating the effects of each subsequent decision. The result is a tree-like diagram (hence the name) that is easy to understand and interpret.

Decision trees can be more conceptual in nature or have numbers to back up decision scenarios, as is the case of pricing changes affecting revenue figures. For decision trees with complicated calculations, a software program can assign values and probabilities to streamline decision-making. A decision tree is a critical part of strategic planning because it allows decisionmakers to analyze the effects of a significant change throughout different areas of the business.

Topics: Data Analysis Planning Analysis Leadership Growth Forecasting Risk Management Change Management Strategy

What are the Benefits of Business Process Outsourcing?

Business process outsourcing (BPO) allows CEOs to focus on the job of running the entire business instead of getting bogged down with the management of individual departments and teams.

Effective outsourcing allows both large and small companies alike to lean on senior skillsets outside of the company to provide accurate information, offer impartial feedback, and inform strategic decision making.

In fact, according to a recent Intuit study, 65% of business owners surveyed said they would be “better positioned for long-term growth if they could take a step back and look at the bigger picture.” These business owners also reported that they were involved in areas of the company such as sales, marketing, customer service, human resources, and accounting, instead of outsourcing them. It is no coincidence that these activities were taking away from their ability to focus on their core business functions. When they were asked what they should be spending their time on instead, their top answers included developing business strategy, making an impact on customers directly, and innovating product/service offerings.

Business process outsourcing allows business owners and CEOs to utilize highly experienced professionals without needing to hire internally, both managing costs and improving business agility. Furthermore, outsourcing allows business leaders to reduce stress, lessening the likelihood of executive burnout.

Topics: Recruiting Trends Planning Cash Flow Leadership Growth Budgeting Strategy

Options for Hiring a CFO

When your business gets to the point where it needs to hire a CFO, what are your options?

  • Full-time In-house
  • Interim Outsourced, virtual or in-house
  • Fractional Outsourced, virtual or in-house

These days a lot of organizations are looking to hire virtually, which makes “hiring a virtual CFO” a hot topic. Amidst all the remote work buzz it is easy to lose your focus and forget what you were trying to accomplish in the first place by outsourcing the role.

Topics: Recruiting CFO Hiring Staffing Leadership Growth Interim CFO Transition

Growth Strategies - Risks and Possibilities

There’s nothing wrong with taking your business in a different direction. Some of the world’s most successful companies started out doing one thing and ended up succeeding at something else. Cell phone giant Nokia began as a rubber bootmaker, and oil conglomerate Shell was an importer of actual seashells. 

You can certainly reinvent yourself at any time, and sometimes it’s the best idea to guarantee success and longevity. But have you considered all of the risks and possibilities as you plan your roadmap for the next chapter of your organization’s growth?

Topics: Planning Growth Risk Management Strategy