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The New Role of the CFO: The De Facto Chief Growth Officer

The New Role of the CFO: The De Facto Chief Growth Officer 41

By Fuad Ahmad, Chief Financial Officer, Chargebee

The New Role of the CFO: The De Facto Chief Growth Officer 42

Fuad Ahmad, Chief Financial Officer, Chargebee

We all learned in 2020 that the world can change in an instant. Shifts happen faster. Effects last longer. And impact reaches wider. Markets no longer transform in years. Instead, they shift in weeks or months. Adaptability is a necessity, and it forces a growth mindset that involves moving fast and experimenting more. The payoff: adaptive businesses grow three times faster than the Fortune 500.

To ensure sustained growth, adaptive businesses tweak in real-time any of the four critical parameters: product, pricing, go-to-market strategy and revenue models. They don’t get slowed down by siloed operations and cross-leverage capabilities across all business units, including: sales, marketing, customer success, product, finance, and so on. 

 

The CFO as Chief Growth Officer

All this has changed the role of the CFO. In the past, CFOs were focused on administrative business: cost-efficiency, metrics, and compliance. They still have to preserve the assets of the organization by minimizing risk and getting the books right—and they have to run a tight finance operation that is efficient and effective. But today, COVID created an increasingly competitive business environment with more competition on the buyer side and on the talent side. Companies need to execute beyond one or two quarters with greater precision and visibility. That shifted the CFO’s role to both keeping the lights on and enabling growth. 

CFOs now have to give direction, shape overall strategies while instilling a financial approach and mindset throughout the organization to help all parts of the business perform better. They have to identify, evaluate and execute strategies, and serve as a business partner to other key decision-makers across the executive team and throughout the various business units. 

Their focus on growth is also becoming a major benefit for marketing leadership. CFOs are not just budget managers; they are budget supporters for marketing experimentation, channel expansion, and other marketing-led initiatives. CMOs and CFOs now have mutual goals and priorities, and are of similar minds when it comes to the importance of serving customers, creating brand awareness, building the right talent, and driving insights from data.

These varied roles make a CFO’s job more complex and demanding than ever. Essentially, the CFO has become the de facto chief growth officer of the company – which had always rung true in the startup stage of the Saas environment but is becoming the norm as large companies are looking for a more modern, digital approach to business. 

Managing growth in uncertain times: it depends on scale and growth

In a recent conversation between Chargebee’s CFO Fuad Ahmad and Joyce Mackenzie Liu, founder of Pegafund, I’ve learned a lot about how to manage growth in uncertain times and how CFOs can help drive positive change. According to Liu, a lot depends on where the business is in terms of scale and growth.  

$30 million in ARR or less

Liu notes that startups with less than $30 million in annual recurring revenue often do not have the benefit of a strong balance sheet or hundreds of millions of dollars in funding. They need to focus on profitable growth and predictable unit economics, as well as cash management. These companies need to be able to measure the experiments that will contribute to future growth and determine which channels will be most predictable. This requires robust solutions for billing, expense management, and revenue visibility to measure and track the right data, and then use that data to derive insights and make better, faster decisions—ultimately creating more options for growth. 

$30 to 80 million ARR

At this stage, companies need to be analyzing which channels are the most efficient, and which can be scaled predictably across different segments and geographies. Now, it becomes even more critical to have billing, expense management, and revenue visibility solutions. And as companies move up-market, the tooling will change as well to accommodate different business needs and sizes.

$80 million-plus and beyond

At the pre-IPO, late-growth stage, the focus needs to shift to making the organization as productive as possible. These organizations are still looking for growth, but very efficient growth and building a strong balance sheet.  

Ensure a single source of truth for data and don’t postpone tooling

Ahmad’s advice: don’t postpone the adoption of the right tooling. It could come at the cost of growth and competitive advantage. And make sure the solutions integrate easily. The CRM solution should be integrated with customer support, billing, invoicing, expense management, and so on, so there is a seamless customer and employee experience across the entire business lifecycle. 

Integration is essential to obtain a single source of truth for data across the entire organization. Only this way can organizations avoid missteps and miscommunications in order to achieve real-time decisions and business velocity. The good news: SaaS solutions have made integration far easier than it was in the past with on-premise point solutions. In many cases, SaaS solutions are pre-integrated by the vendors via partnerships, making the process faster and more scalable.  

A final thought

For Liu, building and scaling a business is like building a house. The basement for the house is solid accounting with strong data quality and integrity. The next phase is to build up the walls and the visibility on the revenue side. Then, companies need to build a roof by continually iterating and aligning with the business strategy and the company’s position in the market. The guide in the process, and the primary arbiter of change in today’s business world? The modern CFO.  

About Author:

Fuad Ahmad is a Chief Financial Officer of Chargebee and Iridex, and Partner at FLG Partners, a leading CFO consulting and board advisory firm in Northern California. Fuad brings in over two decades of rich experience in financial advisory and consulting services to Boards and CEOs. He’s a key contributor to the enterprise-level vision and strategy. 
He is a high-energy and analytical executive with high-caliber management qualifications, acute technical skills, and vast experience in building and leading corporate finance and general accounting organizations. He is a key provider of financial advisory and consulting services to the Board and CEO, and contributor to enterprise-level vision, strategy and decision-making. Visit chargebee.com for more information.

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