CFOs are increasingly being tasked with defining and leading the growth strategy at their companies. I would like to offer the following as keys to success in this endeavor:
- Understanding that a
CFO needs to become the Chief Trusted Advisor across the enterprise to have the relationships necessary to lead successful growth initiatives. - Defining and understanding the strengths and weaknesses of your company. How do leverage your strengths? Do you address weaknesses or pivot strategy away from them to remove them?
- A comprehensive definition or re-definition of addressable markets.
- Understanding the current and emerging competitive landscapes of addressable markets.
- Identifying and leveraging strategic partnerships among the players that serve your addressable markets including customers, suppliers, and even competitors.
- Assessing your
management team to be sure you have the right team in place to execute your growth initiatives. This includes an assessment of the management teams at any companies that are acquisition targets, and how they would fit with your company post-acquisition. - Understanding that a growth strategy should be dynamic, and should contain a portfolio of growth initiatives that defines a growth strategy portfolio which should be managed to optimize the
risk verses return of the entire portfolio. - Not ignoring what drives your company’s competitive advantage in pursuing growth. Taking on initiatives or buying companies that negatively impact what currently makes a company successful is a common mistake.
- Determining the impact of growth initiatives on all of your current employees. How will their roles change? How will processes change? Do they have the bandwidth to take on more responsibility? Do they have the skillset to take on more?
- Not getting drawn in by short-term unsustainable growth opportunities. Initiatives that offer short term growth can also give the gift of long term liabilities. An example is setting up a legal entity in a new foreign market that is costly to unwind to capture a short-term win in terms of increased market share.
- Conducting an honest assessment of the impact of growth initiatives on your company’s ability to deliver the same quality of your current products and services. Sacrificing the current level of quality and customer service (both internal and external) is a critical mistake.
- Not sacrificing the attention and level of commitment to your company’s current customers, both internal and external, in your quest to obtain new customers and drive growth.
- Realizing that communication is king in executing an effective growth strategy.
You can learn more about how the evolution of the role of the CFO into Chief Future Officer at the CFO Dimensions conference being held in NYC from October 19-20.