Driving Business Performance
CFOs ARE PLAYING EXPANDED ROLES in driving business performance. Not content with being the scorekeeper, they are actively partnering with the CEO and business leaders in generating organic revenue growth and managing the company's cost structure.
ORGANIC REVENUE GROWTH
As any CFO can attest, it is much easier to increase profitability if a company is growing its revenue. If dealing with a stagnant or declining revenue base, CFOs start each year with the challenge of reducing costs just to stay even with the prior year. It is a treadmill that becomes almost impossible to sustain, especially when the ability to shrink headcount is constrained by costly severance payments.
Therefore, contrary to their out-of-date image as impediments to growth, today's CFOs are focused as much on the revenue side as the expense side of the income statement. Indeed, several recent surveys have identified “generating revenue growth” as their number one priority in the current environment.
This does not mean that CFOs should embrace growth strategies that are undisciplined or unprofitable; however, it does recognize that the question is not whether to grow, but how to grow, and that the CFO should foster growth initiatives that are meaningful, profitable, cost-effective, and consistent with the company's risk parameters.
They can pursue a number of potential strategies to achieve this goal, including prioritization of focus, use of financial tools, partnering ...