CJ Gustafson

Strategic CFO: Allocate Resources Using Unit Economics

What does it actually mean to be a (throws up in mouth) "Strategic" CFO? The word “strategic” has become lip service. Jargon. As Shakespeare would say: Full of sound and fury, but signifying nothing. My working definition of what strategic actually means is: "Helping to make resource allocation decisions throughout an entire company using unit economics." Being strategic comes down to making A DECISION based on the BEST TRADEOFF OF DOLLARS. It assumes you have limited resources, and you have to make a call. My friend Steve Isom , COO and CFO at PE backed company Bloomerang, weighed in with a much more succinct answer: "If I’m living in an investor backed or private equity backed company, I would tie it closely to value creation." If you’re hired by investors, or investors are brought on, you need to fundamentally understand what they’re underwriting. And it doesn’t mean that the underwriting case is a hyper specific 5 year roadmap for the company. There are multiple ways to get to the same destination. But you better understand what that expected destination is. Many department leaders are not strategic, not because they aren’t smart and talented, and not because they don’t do meaningful shit day to day, but because they optimize for their own department. They don’t look at what they do as part of a system. I've also worked alongside people who were very, very good at being perceived as strategic. They had the superfluous vocab. They got invited to all the offsites for some reason (good at politicking). They could connect any question back to the company's north star in about forty-five seconds flat (in a hand wavy, ultimately empty way). They also couldn't tell you, when pushed, what they would actually cut if the budget got tight. The did not make decisions. They talked around them. And they were not executors themselves. They didn’t personally go out and “do” a lot of the work we agreed upon. In many ways, they liked playing serious, but were not really serious people. Being strategic, in the end, is mostly just being willing to make the call. Not describe it. Not facilitate the conversation around it. Make it, own it, and show your work so everyone can see exactly why you chose a direction. Then go follow the map and report back later. Ideally it’s all for the greater good. Read on: https://lnkd.in/ebXNJPsC