At the Intersection of Finance and Operations

At the Intersection of Finance and Operations  
Navigating the Relationship Between the CFO and COO  

Mindy Barker | Barker Associates

We’ve talked extensively about the relationship between the CFO and CEO—the give and take, the benefits of collaboration, and the impacts of a strong connection between the two. In fact, that relationship is generally the only one anyone talks about in the C-Suite. But what about the CFO’s relationship with the COO? Shouldn’t it be just as important? Is it getting lost in the shuffle? 

Life in the C-Suite has been nothing short of a whirlwind over the last few years. Leadership has had to be agile in navigating the obstacles of shifting economies and markets, while coping with the ramifications of a global pandemic. Adapting to these changes has required those in the C-Suite to ask themselves which practices are still relevant and why. They have examined their own roles within their systems, both individually and collectively, often blurring the lines between them. With a shift in how companies operate and a prioritization of strategic decision-making, the relationship between the CFO and COO is emerging as just as important as the relationship between the CFO and CEO.  

External Changes Bring Internal Cohesion 

A cohesive, collaborative C-suite has always been coveted, but somewhat difficult to achieve. And, once again, it was overwhelmingly centered on the CEO-CFO relationship. The COO was simply an extension of the CEO, carrying out the operations needed for the company to reach its goals. The roles of CFO and COO were aligned, of course, but separated. Simply, the COO was busy managing operations, while the CFO was busy crunching numbers. They were in their own lanes. 

However, the world we live in today is vastly different from the one we lived in just a little over two years ago. Both CFOs and COOs have had to be exceedingly agile since the start of the pandemic. The COO was thrust into an all-hands-on-deck situation, making the operational transition to digital communications and remote work as quickly as possible, all while adhering to the new Covid-19 procedures and regulations. Then, they had to reverse it all, to an extent, as regulations began being lifted. Not to mention this was at the same time as major supply disruptions and a labor shortage due to the Great Resignation.  

While the COO was managing never-before-seen challenges, the CFO had the weight of navigating the company financially through two years on near-constant change and uncertainty and then record inflation. Both roles have been pushed to the limits. But through this strain, it became clear that they are inextricably linked. And when making operational decisions, the C-Suite found that financial considerations were more important than ever.  

A Cohesive Understanding 

CFOs and COOs do not need to be a match made in heaven to generate a positive relationship. Just as with any two people, each will have their strengths and weaknesses. The benefits of a strong relationship will come from the alignment of financial and operational strategies, decisions, and goals. When both parties are equally informed and able to consistently stay aligned, they are better equipped to collaborate, breeding innovation into the company’s processes and systems and developing longer-lasting solutions that maximize benefits for the company overall.  

Greater knowledge of the company’s financial standing and goals will allow the COO to make more data-driven decisions when handling operations. In the same vein, operational knowledge may impact how the CFO allocates large investments or budget cuts. They become more than expenses on a spreadsheet when the CFO understands the strategy and reasoning and was involved in both. So, how can this understanding be implemented in your company? 

Getting Your CFO and COO Aligned  

Cultivating a positive CFO-COO relationship does not have to be an intense process, nor does it have to take an exorbitant amount of time. Much of it is ensuring they are provided with the same information, preferably, at the same time. This can be achieved by:  

  • Having them attend each other’s meetings, allowing them the opportunity to hear team members of the opposite department and bring up their concerns with any proposed ideas or strategies.  
  • Encouraging more one-on-one meetings between them as weekly check-ins where they can discuss strategy and upcoming decisions.  
  • Emphasizing the need for transparency and accountability.  

While the CFO and COO do not need to be best friends (no one in the C-Suite does), they do need to work well together and fully understand each other’s roles and responsibilities. This cohesiveness will pave a much smoother path to a more successful future for the company. 

Barker Associates provides strategic guidance and outsourced CFO services to companies of all sizes. We can provide the higher level of strategy your company needs to grow, including advising on systems and process updates. If you need assistance, or have any other questions, please click here to schedule a 30-minute consultation at a rate of $100.  

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