As Seen in CFO Studio Magazine Q2 2017 Issue

-By Aldonna R. Ambler, CMC, CSP, The Growth Strategist

Get early warning of strategic inflection points

A company recently brought in my consultancy because the long-awaited risk management analysis was suddenly needed — right now! Media coverage about the spontaneous combustion of the lithium batteries inside Samsung’s Galaxy Note7 smartphones woke that client up. (If your product line involved fancy lithium batteries, you would want to speed up your risk analysis, too.)

Of course, we were pleased to help them pick up speed to make informed strategic decisions more quickly. But frankly, nine times out of 10, when executives feel blindsided and urgently need outside help, one of the underlying causes is that those businesses lack real CFOs, or their CFOs are too buried in the generation of reports or in analyzing the past. And the result is that the company doesn’t get early warnings of the need for a major directional shift ahead.

It seems to me that strategic inflection points no longer slowly sneak up on companies. Rapidly advancing technology, generational differences, the shrinking middle class, populism, and cyber attacks, among other factors, are pushing our clients to change.

A business is much more likely to achieve profitable accelerated growth when its CFO is expected to look and listen for symptoms of change, hints about new opportunity, warning signs of lost competitive advantage, etc. Much of the data first appears in the form of returns, product questions, or whining salespeople. And no, this reconnaissance is not just the purview of a Chief Marketing Officer (CMO). A CFO’s education and training bring different questions and increase the objectivity of analysis.

Change Your Company’s Fate

It was Intel’s late Chairman and CEO Andrew Grove who described the people on the outer fringes of a business as Cassandras (a nod to the priestess who warned ancient Troy about an upcoming attack).

The Cassandras in your organization know about programs or products veering off-track — correctible things — but if you are staring at financial reports all day, the Cassandras may not bring early-warning signs to you.

As a CFO, are you available to learn from middle managers about what does and doesn’t seem to be working the way it was expected to work? Is there any time in your schedule to interact with customers or suppliers? If you were Samsung’s CFO, would you have picked up on some of the early-warning signs conveyed by Samsung’s Cassandras?