Wednesday, September 14, 2022

Getting investors and internal leaders to focus on the right things...

In startups, it's common for founders and leaders to pitch a promise of a bright future to investors.  They get aggressive in projections, growth strategies and investment options.  And often, they start believing in their own spiel - they start smoking their own vapor.  As the CFO, you need to steer people to see past the sizzle, get to the steak.  It is critical to keep people focused on the right metrics and allocating on real basis (not allocations only to attain an investor promise).  This is the sure way of building the business for long term.

Similar to business leaders, it is important for the CFO to get the investors to focus on the real growth story.  Sometimes companies are saddled with businesses that create a drag to the overall growth.  This could be a set of customers, products, or markets.  But investors often focus too much on the drag - since that presents risk.  It is important for the CFO to carve a story that drives focus to the growth pieces.  eg. in akamai, when the Giants (Apple, Facebook, etc) went DIY, Jim had to carve the story saying "internet platform companies are not on Akamai anymore as they build their own capabilities, but the core business continues to show momentum and growth" 

No comments:

Post a Comment

On transparency between Management, Board and Investors...

I asked Jim the question about the level of transparency he maintains with the board.  He divided his response in multiple layers. The CFOs ...