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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.  

Adaptability – the Key to Leadership (and Business) Success

Adaptability – the Key to Leadership (and Business) Success 

Mindy Barker | Barker Associates

Our world is in constant flux. We know that. We hear it. We see it. We feel it. But what does that truly mean for businesses? Why have some thrived through this prolonged disruption, while others have succumbed to it? What exactly sets them apart? 

Answering these questions is crucial because if anything is clear in this sea of haziness it’s that the change we’re experiencing in business is far from over. We still have remote and hybrid workforces, severe supply chain issues, skills gaps, employee burnout, and a number of other issues that require leadership, and organizations, to be adaptable. 

We’ve heard a lot about adaptability, flexibility, and resilience throughout this time, but they’re much more than words thrown around. In fact, according to research conducted by McKinsey & Company, “[A]daptability is the critical success factor during periods of transformation and systemic change. It allows us to be faster and better at learning, and it orients us toward the opportunities ahead, not just the challenges.”  

Key Areas to Improve Adaptability 

While organizational adaptability is needed throughout every level and every department, permeating the company culture, there are three specific areas on which leadership should focus long term:  

  1. Technology. Without a doubt, the digital transformation allowed us to stay in business during a global pandemic. But, as its name calls out, it was, in fact, a transformation. It was (and still is) change to which we have to continuously adapt. Through it, we have realized new capabilities we never knew we had, or needed, including the ability to provide services virtually, a critical component for survival. The question going forward is – what else can we learn from what we did before, not from a reactionary perspective, but an anticipatory one? How can we remain adaptable with technology to better leverage the efficiencies and solutions it provides? Remember, there are higher expectations all around, especially from clients who know we are “always connected.” While boundaries are certainly needed, we still need to be able to meet their heightened needs. 
  1. Focus on new opportunities. It’s no secret that challenges bring innovation, creativity, and opportunities. Take, for example, face masks. Three years ago, who would have imagined that face masks would be a multi-million-dollar industry? But with change and disruption comes opportunity … as long as you have the ability to adapt. Leaders should always be looking for new opportunities, even if it means rethinking their own processes. This isn’t a case of if it’s not broke, don’t fix it. Even if it seems to work well, it does not mean it can’t be better. Essentially, our processes need to be adaptable too.  
  1. Prioritize analysis of trends. Leaders should stay aware of what is happening in the world in terms of global trends, overall economic trends, and specific industry trends. What some learned painfully is that if we find out about them too late, there often is not enough time to adapt effectively. Leaders must have the ability to shift along with these trends. This doesn’t mean creating an entirely new business model. It means proactively making adjustments to stay competitive by predicting future needs and demands. For example, many businesses have had to adapt to economic changes to ensure pricing is in line with budgets or face the alternative of losing money with every sale. 

Adaptability is not about just getting through hard times, but about long-term success. It requires leadership, discipline, and accountability. Barker Associates provides strategic guidance to companies of all sizes. We can provide the higher level of strategy your company needs to grow. If you need assistance, or have any other questions, please click here to schedule a 30-minute consultation at a rate of $100.  

Help Investors Spend Their Money

The market has really bounced all over the place since the pandemic hit. We have all seen this happen during 9/11, then again when the 2008 recession hit. But there are investors who must invest in companies and if you have a strong revenue stream and positive cash flow, you will be attractive to investment-seekers.

Mindy Barker | Barker Associates

One thing that is dramatically different with the pandemic compared to the previous financial crises is the amount of money in the hands of the Private Equity and Venture Capital firms. The total money raised in 2008 was $392 billion as compared to $740 billion raised in 2019.

These firms have slowed down their new investments as they work to analyze and save their current portfolio companies. The money that has been raised must be invested in new portfolio companies in order for these firms to stay in business. The pace will pick up after they have nursed their current portfolio back to health and you need to be ready to pitch to these investment-seeking firms.

Companies with strong revenue streams and positive cash flow will be as attractive to these firms as ever. You don’t want to risk losing a potential investor by sending the wrong message in your executive summary or pitch deck.

From my experience in private equity, where I reviewed hundreds of submissions from companies seeking investors, I know that if your revenue stream is not apparent in a few minutes – the answer will be No. And No will be a full sentence.

If you are a founder or a C-suite executive of a fast-paced, growing entrepreneurial company, are you confident you have the Seven Essential Tools you need to pitch to investors? Let’s make sure – please join me for a free webinar on Thursday, June 11, 2020 at Noon.