CFO Contribution to Revenue- CEO Triangle and Lean Consumption

CFO's see their role in the organization as care takers of responsible investment of operating expense, capital expenditures and working capital with typical performance metrics around profitability and cash flow.  In the words of my CEO, " you can't save your way to prosperity" and in these turbulent economic times, it is worth stepping back and seeing the CFO role as a partner in growing the top line.

CEO Triangle:
When thinking about the value of an initiative, the most important question I ask myself is "will the customer care?"  However, what is good for the customer, like a price decrease, can be at odds with shareholder interests and even the future benefit to the employees.  The CEO triangle is a great visual model our company preaches to help the average employee understand how it must balance and looks like this:

                                               -                          

   Our Customers          -            -     Our Employees

                                 -             -               -

                                Our Business

Over investment in any one side of the triangle makes the business lopsided and the ideal investment grows the whole triangle in a balanced way.  

Lean Consumptions:

How does the adherance to the CEO triangle grow revenue?  First, if you look at the three key strategic options every company has (technology/innovation leader, service leader, low cost leader) they all benefit from the goal of making it easier to do business with your company as a differentiator from your competitors.  James Womack and Daniel Jones published a great article in the Harvard Business Review called Lean consumption (link here) http://www.mindmappingworld.com/files/LEAN%20consumption.pdf which touts the principles to making the principles of lean manufacturing part of your revenue generation mindset.  The key 5 principles from the article are:

1. Solve the customer’s problem completely

by insuring that all the goods and services
work, and work together.

2. Don’t waste the customer’s time.

3. Provide exactly what the customer wants.

4. Provide what’s wanted exactly where it’s wanted.

5. Provide what’s wanted where it’s wanted exactly

When it’s wanted.

Initiatives that I see work under these principles in my business include measured response times vs. customer expectations on lead times, authority to resolve issues up to a dollar amount by customer service reps, technology and communication initiatives that make it easy for your customers to voice complaints and 24 hour resolutions.  Data gathering is also extremely important such as leveraging your contact points outside of sales such as purchasing or customer service or accounting, to understand where your competitors cause frustration so you can have established benchmarks of differentiation.  My company also uses customer surveys.  With the advent of blogs and twitter within CRM systems like salesforce.com, their is much more opportunity to for an open dialogue, not just a transactional dialogue with all levels of the organization and the customers organization.

In summary, customers are not organizations, they are individuals that want their day to go smoothly and to have meaningful cordial relationships and these principles create more connections that are less financially motivated from the customers point of view which creates the opportunity for a premium based relationship and incremental profitability and revenue.

Next Blog Post: Practicing your CFO role outside your Organization