I recently attended MIT Sloan’s annual CFO Summit in Newton, Massachusetts; not just to earn the CPE credits needed to maintain my CPA certification, but more importantly, I wanted to gain an understanding of CFOs’ perspectives in this difficult economic environment. This is something that every CMO should understand to help optimize their management strategy as well as their tenure.
It was no surprise that the theme of the conference was “Relentless Volatility”. Jack McCullough, one of the two co-chairs of the event, put it well in his opening remarks: “My investment banker friend in London described this environment as being similar to a divorce but worse. . . ‘I’ve lost half of my net worth, but I’m still stuck with my husband.'” I’d like to summarize several key comments from the event that may offer you some ideas for how best to not only ride out the storm in the upcoming year, but even perhaps to leverage the situation to improve your position and take share in this tough market:
- As part of your annual and intra-year planning process, ensure that you leverage scenario planning to best identify what challenges you may encounter in the next quarter or year, as well as what steps you need to take to minimize the potential damage from these risks;
- Communication in this volatile environment increases in importance. . . not just with your functional team, but also with senior management; (i.e., don’t be intimidated to better engage your CEO and CFO, especially when you need help or need their advice)
- Ensure that your executive team knows that you not only understand the current challenges you face, but that you also have a plan to address them; (and meeting with the CFO offers a great chance to ensure that your plans are grounded in reality, as well as a chance to share your vision and increase their comfort level with your management framework and strategy)
- “We’ve spent a significant amount of time reallocating our budgets to ensure that we’re focusing on investment in the high growth, high profitability areas vs. in the “harvest” areas that may not need as much investment”, Norman Robertson, CFO Progress Software; (e.g., IDC CMO Advisory Practice research indicates that the average technology vendor allocates 38% of their marketing budget to newer, higher growth business areas or product lines vs. existing, more mature business areas or product lines)
- The large companies will no doubt be reducing their on-campus recruiting efforts this year. Therefore, now is a great opportunity to hire the best and brightest individuals from the top schools.
- And finally, continue to drive innovation within your team, motivating individuals to take chances in an effort to change how they do business today. We need to give our staff the opportunity to be leaders, stepping into the light that no one else may see.