The Role of a CFO Partner in Diverse Industries
In the age of remote work, generalists are in higher demand than ever. And companies need high-level employees with multidisciplinary experience to stay competitive.
This is especially true of CFOs. While specialists are incredibly effective in traditional industries, generalist CFOs are able to connect the dots in more blended and diverse industries—which is especially helpful in today’s interconnected world.
That’s why we sat down with Amanda Morgenstern, a Propeller CFO and highly skilled generalist, to discuss the unique role CFOs play in modern business—and how they can (and will) be successful no matter where they’re placed.
Industry Lines Are Starting to Blur
According to Amanda, there are two main reasons why industries no longer exist in silos and are more interconnected than ever:
- The Bifurcated Marketplace: Traditional markets keep splitting into more distinct segments, which means the most successful businesses in any sector are forced to adapt to different niches.
- The Scattered Consumer: With modern consumers more dispersed than ever before, businesses must employ flexible, diverse targeting tactics to effectively reach them.
These blurred lines present a new opportunity for companies to create their own consumer bases, often allowing for engagement before purchase. Now, more than ever before, businesses can outpace the market by carving out digital encampments, where they have a high degree of control over their intended consumer journey from start to finish.
This establishes a new paradigm for success. “For example, sales and outreach must now be measured and understood in touchpoints, not just conversions,” says Amanda. This shift manifests itself in innovative approaches to established industry norms.
- New ways to understand and present data: Incorporating marketing data, such as touchpoints, is crucial for obtaining a comprehensive financial overview.
- Rethinking stakeholder communication: Key info should be presented in a way that resonates across perspectives, including operational and sales insights.
- Multifaceted understanding of the customer: Categorizing customers into distinct segments like owned, earned, and paid helps develop a more robust financial strategy.
Industry Crossover Examples
Here are a few examples where Amanda is seeing significant industry crossover.
Example 1. CPG Companies With a SaaS Component
A CPG (Consumer Packaged Goods) company develops a SaaS (Software as a Service) component. This involves integrating an app into their traditional product lines, adding complexity but also significant value. This provides additional touch points that can be tracked via the app, where the company can engage with clients in new and unique ways—offering rewards and prices and meeting people where they already are.
Example 2. Retail Brands Accepting Cryptocurrency
A retail brand begins accepting cryptocurrency as a form of payment. While this introduces a new revenue stream, it could also be a significant risk vector. A generalist CFO must understand the financial implications of these types of decisions, balancing potential gains with the inherent risks.
Example 3. Sourcing from Small Mom and Pop Shops
A grocery chain sources material from small, local suppliers. This has both pros and cons. It leads to fluctuating costs and less consistent inventory on shelves at any given time. But it also lowers warehousing costs, supports local businesses, and diversifies the supply chain. This type of transition requires a generalist CFO who can manage variable expenses and develop strong relationships with multiple suppliers, ensuring a steady flow of goods.
Integrating Marketing And Sales Into Finance
Every CFO’s north star is clean and accurate data. Proper data analysis reveals key trends and hidden customer behaviors essential to confident, strategic decision-making.
But when you start to care about where your customer is going on vacation, you begin to enter the world of marketing—and that’s not a bad thing.
CMOs and marketers typically think of terms of big, bold campaigns, but they might not always be as effective as a simpler, turnkey plan of action. As a modern CFO, you should intimately understand how and where your marketing dollars are spent to ensure you’re getting the best bang for your buck.
Or, as Amanda explains, “I need to understand marketing choices to determine success metrics, pivot strategies, and customer acquisition.” She also emphasizes the importance of being familiar with marketing terminology. “Conversion rate, open rate, bounce rate—all of that matters. How many customers are unique? What’s your retention?”
Knowing where your marketing is most efficient (and effective) is vital to any company’s continued success. For example, if your SEO efforts are boosting viewership but not conversions, then your marketing strategy needs some adjustment.
Asking “Why” For Every Spend Decision
Of course, marketing is just one department generalist CFOs should be comfortable asking questions in. Amanda also emphasized the need to understand the “why” behind major business (and spending) decisions across the board.
“I’ve worked in a lot of different industries. The theme is the same: accounting is accounting is accounting. Everything has a financial beginning and end—so, how do I use and interpret those numbers to get to the future I want to get to? I love using the past to inform my future.”
In other words, CFOs need to grasp a company’s history and the decisions that led to its current state. It’s why Amanda routinely investigates anything that she feels doesn’t make sense or that she needs a bit more clarity on.
“I ask a lot of questions,” Amanda says.
The Difference a Generalist CFO Can Make
A skilled, generalist CFO should have expertise in Operations, Marketing, and Sales across various industries, offering a comprehensive view of any company’s operations. They should help you make strategic decisions on resource allocation, such as hiring new sales leads or cutting underperforming products, that require a deep understanding of unit economics, marketing efficiency, and sales cycles.
In today’s complex and evolving world, the paradigm of “right” is always changing. Every business must discover what is right for them, and a strong fractional CFO, like Amanda, can help you get there, with key insights and deft guidance.
