Why your CFO should pay for and play more golf 

In April 2005, economist Steven Levitt and New York Times journalist Stephen J. Dubner debuted “Freakonomics” which has become the staple diet for those who want to understand what makes things tick.  

To this day, they consistently unpack fascinating topics like “Is Marriage Worth it?” and “Is it good or bad to keep secrets?” as they challenge us to think differently as cultures and economies collide.  

With this in mind, I felt I had a “Freakonomic” of my own that I would like to throw into the mix and it goes like this: “Why your CFO should pay for and play more golf”  

We recently hosted a networking event in Melrose Arch and the keynote speaker spoke about how he had launched his insurance business and the importance of “chutzpah” for getting out into the market and meeting new people. For those of us who are not natural networkers – there were the usual questions around breaking the ice and finding the balance between networking and selling.  

Watching these interactions taking place, it gave me pause for thought on two things.  

The first is that forward-thinking organisations do not confine their CFO to the finance function but rather move them closer to the Chief Revenue Officer’s orbit. Over the years, we have interviewed thousands of CFOs and one of the key differentiators for the top performers is that they all have strong professional networks. If we look across our business, these CFOs have run large listed and un-listed businesses across multiple industries – they don’t just fulfil the finance function, they are constantly scouring their networks for strategic partnerships and other relevant opportunities.  

The second area where CFOs need to add value is by understanding both the “lead” and “lag” indicators when it comes to bringing in business. Too often the CFO is focused on the lag indicator of revenue invoiced and doesn’t spend enough time understanding the lead indicators which will generate the revenue in the first instance.  

A perfect example of this is … Golf.  

How often will you see a CFO berating their sales team for lunches, networking functions or time on the golf course – including the 19th tee?  

While a good CFO should keep tight control on expenses, it is also important that they understand that these “softer” activities are generating an economic return. The CFO cannot limit his or her responsibility to tracking the numbers – they should be engaging with their counterparts at their customers or suppliers to understand the key drivers of their businesses and how they could collaborate in unlocking value in the industry value chain.  

It is not the CFO’s responsibility to manage the Sales and Business Development teams, but they should have an intimate understanding of the level of sales activity taking place in a month and then predict, based on the data, what revenue stream this will produce. 

Similarly, they need to remember that their finance teams have a number of client touchpoints including supplier onboarding, compliance, debtors and creditors. How the client is treated at each of these touchpoints will have a material impact on the commercial relationship through its lifecycle. You can have the best sales team in the world but if you cannot create a low-friction relationship with your clients, it will be very difficult to nurture or expand this relationship.  

By understanding these lead indicators, they can have a closer relationship with the Sales Manager or Chief Revenue Officer.    

This includes metrics such as new client acquisition, retention, margins and spend per client.    

The reality is that organisations are more likely to see greater churn in sales and business development resources than those who are operating in Finance Director (FD) or Chief Financial Officer (CFO) roles – these FDs and CFOs are able to build deep and valuable relationships with their opposite numbers at clients and suppliers … but they can only do this if they adopt a mindset of networking and are proactive around building these relationships.  

Based on our 15 years of experience in this professional sector, we recognise that CFOs who build deep, meaningful relationships become true assets to any business eco-system that they operate in.  

Therefore, it makes sense for your CFO to get out from behind their desk, dust off the golf clubs and work out what delivers a return on investment for the organisation.   

Rowan De Klerk is a seasoned CEO and CFO with a strong commercial and strategic background and over 35 years of experience working with both large corporations and mid-sized entrepreneurial businesses. He is the founder and CEO of The CFO Centre South Africa which is part of a Global Financial Leadership Practice.