Chief Financial Officers are quickly becoming something akin to the CEO’s consigliere, one of the many reasons marketers need to align themselves with their CFOs.
As the former international marketing manager for one of the world’s first commercially successful PC software companies, MultiMate International, I seldom communicated with the finance team.
Instead, I focused on managing marketing programs, global partner events, and product translations, and I did my best to keep up with skyrocketing growth and media attention–I assumed keeping an eye on finances was my boss’s job.
One afternoon, CEO Will Jones announced that he sold the company to Ashton-Tate. I later learned that our cash-flow condition was anemic. On that day, Jones laid off half of his employees–including me.
I felt blindsided and betrayed, and I am probably not the only marketing person who has felt that way in the face of a liquidity event.
Sadly, marketers often learn finance fundamentals through the school of trial and error, not through formal education. We slowly learn the basics of finance, and when pressed, we reluctantly meet with the CFO to review budgets, strategies, and resource requirements.
This attitude is a surefire way to lose control of your career and be perceived as a marketing tactician.
Much like tectonic plates, the CFO role is changing beneath our feet, and we need to adapt.
Finance has greater influence and authority over operations and IT
According to Gary Patterson, CEO of advisory firm Fiscal Doctor, Inc., today’s CFOs are expected to play the role of both COO and CFO.
This means that your CFO may also be responsible for additional activities such as prioritizing a finite set of company resources, communicating the strategy across the company, implementing performance and recognition programs, and overseeing staffing levels and team incentives to fulfill the company’s requirements.
The CFO is also increasingly involved in overseeing strategic technology investments.
In some countries, organizations are also seeing finance gaining more control over IT decisions–almost 83% of respondents in a Robert Half study are citing a rise in collaboration between the IT and finance teams during the last three years.
Crist|Kolder Associates’ Volatility Report 2013 confirms this trend. Their semi-annual study reveals that companies continue to eliminate the COO role, with a 4.2% decrease in 2013, and CEO hires with CFO experience increased substantially the same year.
In a nutshell, the CFO role is evolving into a key consigliore to the CEO.
Both share something in common: the need to carefully monitor and mentor the entire corporate family, which includes product developers, HR, IT, customer service, sales, and marketing.
During my recent CMO Breakfast Roundtable, HelloWallet CFO Aaron Benway stressed that “approaching your CFO to test your marketing budget before approaching the CEO is a great strategy, because the CEO will often ask us what we think first before making a decision.”
The financial landscape is evolving
The accounting profession in America is facing fundamental shifts with global accounting standards being deployed around the world.
Chief marketing officers have two options in this new scenario: to proactively work with their finance counterparts on a plan to adopt these new reporting standards into the marketing planning and budgeting cycles, or to watch what happens and respond hastily.
Over time, the savvy CFO will expect marketing leaders to speak the language of numbers and strategy more than ever before. You need to strengthen your critical thinking muscles to help you explain how new marketing investments will benefit other departments, investors, and customers.
CFOs simply don’t care how many new Twitter followers or live events you hosted. Unless you’re a startup looking for your first set of marquis customers, those metrics just don’t matter.
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Copyright 2014, Lisa Nirell. All rights reserved.
This post originally appeared in FastCompany.
[Image: Flickr user 401(K) 2012]