CFOs and product strategy: much more than just numbers
It was challenging times when Tim Wakeford became the UK CFO of Cushman & Wakefield. It was 2010 and the commercial real estate business was still punch-drunk from the financial crash.
“My first two years was telling the CEO ‘We missed target again’,” Wakeford told AccountingWEB. “We became really good at forecasting headcount.”
These sorts of sombre conversations presented Wakeford with a career minefield. He ran the risk of just becoming the avatar of bad tidings; not necessarily a guy you want to include in the more interesting, strategic conversations. “If you’re just the rain cloud, that just says no, you get kept out,” he said.
But Wakeford survived the crucible presented by the 2008 crash. “But I learned you can do it in a way that doesn’t just invite doom and gloom. Really good finance people can give the bad news while offering a strategic vision to go along with it.
“Sometimes, of course,” he added wryly, “you can’t and you just need to put on the suit of armour and take the punches.” Those occasions have been mercifully rare.
There’s often talk about CFOs being more than just CFOs. But to Wakeford, it’s the wrong way to look at it. His command of a business’s strategic and product vision is because of, not in spite of, his expertise.
In his new role as VP of financial product strategy at Workday, Wakeford still sees himself as a CFO. Operating at the intersection of Workday’s sales and product teams, his aim is to inject in the pragmatic realism of a seasoned CFO into the process.
“It’s about adding value and guarding against innovation for innovation’s sake. CFOs and finance professionals are perfect for that because we’re focused, we anchor the innovation in what the business’s financial goals are.
“You’ve got to be selling something that’s going to make someone’s revenue grow, cost shrink or pain point disappear cheaper and more easily than I can make it disappear today. Shrink it down to what I understand. I’ve got revenue, cost, profit.”
Although he still utilises many of the skills he cultivated as a CFO, Wakeford’s focus is now solely on the product side. But at Clear Books, David Carr has taken this a step further, fully hybridising product strategy and the CFO role.
It’s not just a temporary measure. It’s Carr’s full time role. “Obviously, I’m responsible for the finance function,” he said, “but I’m also effectively the head of product.” This dual focus means prioritisation is key, but Carr agrees with Wakeford’s assertion that there’s a natural crossover between product strategy and the finance function.
“Finance serves the business. It’s a way to understand what’s happening to the business, to model it,” he said. “It’s quite similar to a product space, where you want to read what a market is doing, what customers are saying, what new markets there are. You do work and you measure your success.
“Most of the time, the outcome of that will be financial results. It’s numbers at the end of the day. It’s analytical skills, and building systems to manage those numbers and control those numbers throughout the process.”
It harks back, again, to Wakeford’s point that the analytical skill and appreciation of internal control systems grants the CFO a uniquely powerful insight. “It’s the same problem space and application of skills, and it all leads to the same business success in the end.”
Despite all these strategic benefits offered by a CFO, it’s still quite rare to see CFOs as co-founders. Perhaps the most famous example is Facebook’s Eduardo Saverin, a partnership that ended rather ignominiously.
Outside of Saverin’s blockbuster example, it’s generally tricky - but not impossible - for FDs and CFOs to act as co-founders, according to Ciaran O’Donnell, a virtual FD that works with ambitious startups.
“I know FDs who’ve co-founded businesses and doesn’t last mainly because a point is quickly reached where the business cannot justify or afford a full-time FD or is unable to reach agreement on equity,” O’Donnell said. “It is a challenge to get it right for all sides.”
Despite the difficulties, O’Donnell has co-founded businesses successfully. Having the finance function from the outset has numerous benefits. It puts “slicker models, outputs, investment focus/agile reforecasting” in place from the outset. Forecasting and revenue models.
“It leads to better management accounts,” said O’Donnell. “Not slow/poor reports from external accountants that is not the right format for non-financially qualified readers and/or boards.”
For most finance professionals, the move toward product ownership is a more attainable step. It does come with its challenges, but it's certainly not an illogical continuation of the finance role.
“I have to keep myself in check at the same time. There’s so much we could be doing from a product perspective, but there's only so much resource,” said Carr. “So my role is about what’s good for the business as a whole not just about the product side.”