The CFO role has evolved beyond managing finances and ensuring compliance, with a growing emphasis on driving the sales cycle. Kurt Shintaffer, CFO at Apptio, says forging strong partnerships across the organisation and prioritising investments has been the key to success
The CFO role has undergone a significant transformation in recent times; today CFOs must go beyond managing finances and ensuring compliance and help to drive the sales cycle.
Kurt Shintaffer, the CFO and co-founder of US-based technology company Apptio, is a prime example of someone who has balanced this evolution successfully.
Shintaffer’s sharp business acumen was on full display when he observed a sharp uptick in the company’s website traffic in April 2020. Recognising this as a clear growth opportunity, he was inclined to invest more in Apptio’s go-to-market strategy.
However, his chief marketing offer offered a word of caution that the traffic could be mere “tire-kicking” by casual visitors, rather than genuine interest from potential customers. “And she was right,” Shintaffer tells The CFO.
This experience taught Shintaffer that collaboration and working closely with his peers across the various functions in the business was key as they might have more “nuanced filters”.
“The benefits of this [collaboration] include better decision making because the information that we now get is contextualised with all the knowledge of the people in those functions,” says Shintaffer,
As a result, Shintaffer’s finance team was forced to abandon its typical way of looking at everyday data as a result – a turning point for the business. At this point, Shintaffer realised that to be an effective CFO in today’s world, you need to look beyond the numbers and forge strong partnerships across the organisation.
By doing so, you can get a more complete picture of the business and drive growth and revenue.
As the business landscape continues to shift rapidly amidst uncertainty and turmoil within the banking sector (most recently in regards to Credit Suisse and First Bank), CFOs must adapt and evolve to meet the changing demands of the market.
According to Shintaffer, this means taking an even more conservative approach to cash management and capital preservation.
He explains that the current market conditions have led CFOs to rethink their treasury management strategies. This includes considering where they keep their money, how they invest it, and the institutions that hold their investments.
Developing a healthy internal infrastructure that protects against the rising cost of capital is crucial for CFOs to integrate the sales narrative effectively. With the constantly changing economic conditions, businesses are faced with the challenge of managing their costs, including the cost of capital.
This cost can significantly impact the profitability and growth of a company, making it critical for CFOs to establish robust internal controls and systems that mitigate these risks. By doing so, they can better support the sales narrative by ensuring that the company’s financials are stable and reliable, which can help instil confidence in investors and other stakeholders.
Shintaffer explains that a healthy internal infrastructure can enable CFOs to focus on strategic planning and decision-making, driving sustainable growth and profitability for the business.
“Investors are always thinking about the cost of using capital for a particular initiative, rather than investing in something else, like buying back stock or giving dividends to shareholders,” he explains.
“The higher the cost of capital, the harder it is to get a return on investment as compared to other options,” he adds, noting that for a CFO, it creates bigger barriers for deciding to invest in a certain initiative because other alternatives look more attractive.
“This puts a burden on our sales team to create strong business cases for the value that our software can bring to customers. Similarly, individuals working with our sales team have a harder job internally sell the initiative because the implied cost of capital is greater and it’s harder to make a business case for making this specific investment as compared to whatever the range of alternatives could be.”
With the role of the CFO evolving beyond traditional finance and accounting responsibilities, there are several challenges and pitfalls that CFOs may face.
CFOs may lack the necessary sales skills and experience to effectively drive revenue growth. They may struggle with prospecting, building relationships, and closing deals – essential skills for sales professionals.
Additionally, they may not have the same level of industry knowledge as their sales counterparts, which can make it difficult to connect with customers and understand their needs. Furthermore, CFOs may also have limited time and resources to devote to sales activities given their existing responsibilities.
So how can CFO navigate the critical role of managing finances and ensuring compliance, while also recognising that taking on sales responsibilities may detract from these key areas.
Shintaffers tells The CFO that in a finance team whose biggest challenge right now is prioritisation “it really just comes down to people getting in rooms, talking about all the opportunities, talking about all the potential risks, and coming up with the best risk-adjusted investment strategy for your business.”
He says most organisations are facing a similar dynamic where they cannot deploy as much capital as they want to.
“The winners – two, three years from now – are going to be the ones that ran a really good prioritisation process, and picked the right investments and specifically chose not to invest in things that weren’t going to be adding the value that that the alternatives would,” he says.
“So, I think we will look back in and look at some of the things we said no to, and hopefully feel really good about that. Just like we will feel good about the things that we said yes to,” says Shintaffer.
