Tag Archives | financial leader

Quotes Every Financial Leader Needs to Read

A few weeks ago, I started another series of our Financial Leadership Workshop, and in Day 1, we discuss that paradigm shift that needs to take place to go from accounting to financial leadershipSo, I compiled all the quotes from all of my curriculum that make me think… How can I lead my company differently? What can I do to better serve my clients? Take a look at following quotes every financial leader needs to read. Leave a comment below to suggest any other quotes and/or your take on the quotes I listed.

Quotes Every Financial Leader Needs to Read

While each of the following quotes is focused on a specific need or issue, I believe that every CFO, CEO, and financial leader needs to explore what each of these quotes mean.

Having a Plan

So often, entrepreneurs do not have a plan. We hear horror stories of executives telling their teams that there is no plan. Having no plan is a plan and it usually ends in disaster. Or maybe you have a plan but it is in your head and not documented.  You must get your plan down in writing.  Do you remember Captain Sullenberger landing the plane in the Hudson River on that chilly winter day? Here’s his take on having a plan.

“During every minute of the flight, I was confident I can solve the next problem. My first officer, Jeff Skiles, and I did what airline pilots do: we followed our training, and our philosophy of life. We never gave up.  Having a plan enabled us to keep our hope alive. There’s always a way out of even the toughest spot. You can survive.” – Capt. Chesley B. Sullenberger III

Role of a Leader

Do you know the role of a leader? Condoleezza Rice, former Secretary of State, said the following about a leader’s role.

“The role of a leader is to inspire people to a common goal and enable them to get there.”– Condoleezza Rice


Are you financially leading your company (or trying to)? We are starting a new series of our Financial Leadership Workshop this March 2019. Click the button below to learn more about what this coaching workshop is all about.

Learn More About the Financial Leadership Workshop


Leadership Habits

“The 8th Habit is to find your voice and inspire others to find theirs.” – Stephen R. Covey

Attraction

“The iron rule of nature is: you get what you reward for. If you want ants to come, you put sugar on the floor”– Charles Mundger

The Rest is Just Details

Our very own founder, Jim Wilkinson, had this saying that business is pretty simple… It’s all about sales! When a financial leader is able to shift their mindset from accounting to supporting sales and enabling sales to grow, then you become a whole lot more effective. Read more about this phrase here.

“It’s all about sales; the rest is just details!” – Jim Wilkinson, founder of The Strategic CFO

Budgeting

There are several budgeting quotes every financial leader needs to read.

“A well-constructed numerical estimate is worth a thousand words.”  – Charles Schultze, former Director of the US Bureau of Budget

Budgeting is the bane of corporate America.”  – Jack Welch, former CEO of GE

“Without a yardstick, there is no measurement And without measurement, there is no control.”  – Pravin Shah

The Hedgehog concept – created by Jim Collins – is when companies identify what they do best and focus on that. For example, a hedgehog knows how to defend itself. That’s what it does best! It does not try to expend time or energy hiding or fighting.

“The purpose of budgeting in a good-to-great company is not to decide how much each activity gets, but to decide which areas fit the hedgehog concept and should be full funded and which should not be funded at all.” – Jim Collins

“The only things that saves us from the bureaucracy is its inefficiency.” – Eugene McCarthy, US Senator

Problem Solving

Equip yourself with multiple tools, and more specifically, the right tool.

“If the only tool you have is a hammer, then every problem looks like a nail!” – Abraham Maslow

My Own Quotes

Here are two of my own quotes I use with entrepreneurs and coaching participants over the years:

“I do not believe in sacred cows.”

Working capital is like your diet; if you do not manage it, then it can kill you.”

What other quotes have changed the way you lead your company? Leave them in the comments below. Also, click to access our 7 Habits of Highly Effective CFOs – this is everything CEOs have told us what they want from their CFO.

quotes every financial leader needs to read

Quotes Every Financial Leader Needs to Read

2

Do You Hire a Controller or a CFO?

Many people use Chief Financial Officer (“CFO”) and Controller interchangeably because they think it is the same position. In some companies, a Controller could be the top financial leader. But that does not mean they are a CFO or CFO-level. Before we answer the question of do you hire a Controller or a CFO, we need to understand when companies need to hire a financial leader.

Do You Hire a Controller or a CFOWhen Companies Need to Hire a Financial Leader

Every company needs a financial leader – depending on the stage or life/size of your company this financial leader may be a bookkeeper, accounting manager, Controller or CFO. For example, some companies over $25 million in revenue may want to consider having both a Controller and a CFO. In this blog, we will focus on the difference between a Controller and a Chief Financial Officer (CFO).

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When to Hire a Controller

You need to consider hiring a Controller once the number of transactions in your company increase and the size of your company increases to the level of needing accounting records based on Generally Accepted Accounting Principals (“GAAP”). This may be $10 million in revenue and more. Why? At that level, you are beyond the basic cash basis bookkeeping. You need accounting records that are based on GAAP and accrual basis so that you can better manage your business. Plus, you may have bank debt that requires you to present your financials based on GAAP.

Role of a Controller

Some of the duties that a Controller has include the following:

As your company grows, you should always maintain the Controller function, eventually as the company gets big enough your company will have the Controller report to the CFO.  The Controller “books the past” and continually works with historical information.

When to Hire a CFO

Once your company gets to needing more than good accounting records based on the past, you may start considering hiring a CFO. Things that may require a CFO include forecasting, maintaining debt covenants, mergers and acquisitions, deeper analysis of the financial statements, managing capital structure, investors, banks, and/or taking your company public.

Many companies find themselves in a stage of growth that I refer to as “transitory” – that is, your company is transitioning from small to medium or large. In this stage, you wish you had a financial professional with great experience such as a CFO, but you cannot afford a full time CFO. That is where an Interim CFO makes a lot of sense. Now, be careful as the Interim CFO market has become a popular market where many have jumped in and they lack the true experience. The problem is that you do not need a license or degree to become a CFO, anyone can call themselves a CFO. If you are seeking an Interim CFO, then call us and we can certainly help you identify a solid Interim CFO.

Remember, a good CFO is a great manager, has good operational experience and is the strategic financial partners to the CEO.

Do You Hire a Controller or a CFO

Role of a CFO

While the role of a Controller puts together all the financials and focuses on the historical transactions, the CFO works with the historical information but uses it as a tool that enables him/her to be a strategic partner to the CEO. The CFO then projects what is going to happen, provide strategy for the CEO to implement, and improve profitability. This can include adjusting pricing, increasing efficiencies, identifying opportunities, and enabling the CEO to make calculated risks. The CFO role goes beyond being a trusted advisor. It also includes:

  • Managing capital structure
  • Manage risk management for the enterprise
  • Acting as a figure head for decisions and taking ownership
  • Usually manages IT, Human resources and tax functions
  • Coaching leadership team and employees to get to best results
  • Being a diplomat with third parties (banks, vendors, auditors, customers, investors etc.)

This is very much a multi-functional role within a company. It is a role that truly demands someone with not only good financial skills, but someone with excellent management skills. And as I already mentioned, a really really good CFO has very good operational experience and that person likes operations.

A fish rots from the head down… Ever heard that saying? It’s absolutely true when dealing with leadership. Learn how to hire your leadership with our 5 Guiding Principles For Recruiting a Star-Quality Team!

Do You Hire a Controller or a CFO

Do You Hire a Controller or a CFO?

The big question is, do you hire a Controller or a CFO? It depends… It depends on the size of your organization. We speak to CEOs and business owners all the time, especially those under $100 million in revenue, they are not sure at what point they need a Controller and then a CFO.

Every business is unique, and I do not want to generalize. But for conversation sake, if your business is between $10 million and $25 million in revenue, then a Controller may suit you well. If you are over $50 million, then you are at the size where you actually should have both functions of Controller and a CFO. Now I left the range of $25 million to $50 million without mention on purpose. That is because it depends. It depends on your complexity, industry, number of transactions and many other things.

We have spoken to business owners of $35 million companies and determined that they can function very well with just a strong Controller.  We have also met with start ups with zero revenue but funded $75 million in CAPEX by investors, well we highly recommend they hire a CFO from day one because they have big plans and complexity from day one of their operation.  So every situation is really unique.

Roles are NOT Interchangeable

Many companies opt to hire a Controller when they really need a CFO. These two roles are not interchangeable. Although in the same area of expertise (accounting and finance), these two roles are different. You cannot hire a Controller and expect them to be your CFO. These are two very different functions.  And it is simply a fact, not all Controllers make good CFOs. As already mentioned, a CFO has certain characteristics that many Controllers simply do not have and frankly do not want to have. Take your time to understand the different roles. You are not alone because all growing companies are facing this dilemma. But we are only a phone call away and can help you sort through this challenge and assist you in making the right decision no matter where in the world you are located.

If you are hiring either a CFO or Controller, then take the time to truly understand the difference between the two. Because the financial function is a sensitive one, it’s important to chose someone who will not only be loyal and trustworthy, but will make your team star quality. Check out our free 5 Guiding Principles for Recruiting a Star-Quality Team now! Then answer the question, do you hire a Controller or a CFO?

 

Do You Hire a Controller or a CFO

Do You Hire a Controller or a CFO

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How CFOs Can Drive Revenue Growth

How CFOs Can Drive Revenue Growth

The financial type is stereotypically called a “bean counter” because they focus primarily on the costs or overhead. That’s the easy route to take. They can manage the costs without having to walk outside their office or cubical to talk to another person or department. But a financial leader needs to help drive revenue growth in their company to create real success. We’re looking at how CFOs can drive revenue growth in this blog. First, let’s look at why you should not just cut costs, but drive revenue. Remember, it is easy to cut costs, it is really hard to cut the right costs.

Don’t Just Cut Costs… Drive Revenue

The typical CFO is managing cash flow and profitability. But we have talked with so many CFOs and they say, “revenue isn’t my job.”  Well, it should be. If there is no revenue, you do not have a job.

Why Cutting Costs Doesn’t Equal Success

The sales team is responsible for revenue and the CFO is responsible for everything else… Right? That’s the common misconception among the financial leadership. But the financial function needs to be more involved in sales than they are right now. Cutting costs (aka being a bean counter) does not equal success. Focusing on only cutting costs is a very short-term strategy.  If your organization is a going concern you want a long-term strategy which includes cutting the right costs as well as revenue growth, improved margins and ultimately profitability.

For example, there’s an economic downturn. You as the financial leader are cutting fixed costs, evaluating expenses, not giving out bonuses, etc. Cash is tight. And the money isn’t coming in with this downturn. At one point, you are going to be extremely lean in your overhead and you can’t cut anything else. What happens if the downturn continues another 18 months? You’re going to be out of business or in debt.

The CFO cannot just focus on overhead. They need to be looking at more cost-effective vendors, work on improving productivity and efficiency, innovating with the CEO and sales team, focusing on the more profitable customers, and forecasting the sales potential. Basically, the CFO needs to be thinking of ways to bring in more cash while keeping costs down… hence improving profitability.  Many of the most successful CFOs end up as the CEO.  Well guess what, the CEO worries about everything, including sales and profitability.  If you are next in line as the current CFO, are you really prepared to step into that CEO role?  Are you thinking like a CEO?  A good CFO actually thinks like a CEO.

Click here to access our Goldilocks Sales Method and learn how to build your sales pipeline and project accurately.

How CFOs Can Drive Revenue GrowthHow CFOs Can Drive Revenue Growth

When you look at how CFOs can drive revenue growth, you need to look at leadership. Who is the financial leader?  In other words, they may be chief; but are they able to lead a group of people to accomplish a goal. Let’s look at how a CFO can align finance / marketing departments, and not be a CFnO, but have data transparency, and be a successful financial leader.

Align Finance & Marketing Departments

As an example, finance, marketing and sales should be close to one another as one is managing the money and the later wants to spend the money to make more money. These three departments should be on the same page and in sync with one another. Think about when you (the CFO) create a budget. That budget is useless unless your company follows it. You need to manage the marketing department and your sales people need to inform you with their sales projections, what they need to accomplish their goals, etc.  Hopefully this was all captured when you created your annual budget.

For example, I work with my Director of Marketing to make sure we are on the same page as far as marketing goals are concerned, see what she needs to accomplish her job, and to hold her accountable. It could be easy to let her just be a detached marketer, but I would risk spending money that we don’t have, pursuing customers that aren’t profitable, and focusing on the wrong things. We talk about our budget on a weekly basis.

Don’t be a CFnO

We’ve talked about it before on our blog as well as in our coaching workshops. To be a successful financial leader, do not be a CFnO. What is a CFnO? It’s when the CFO only looks at the numbers and rejects every idea that the management team or CEO has or wants to pitch. Imagine you are trying to drive the company forward and invest in areas that you think will be profitable. Then imagine someone looking over your shoulder repeating no, there’s not enough money for that, not until you do X, Y, and Z, etc. You probably wouldn’t like that very much. They don’t either.

Instead, give them the chance to elaborate on their idea. Ask questions like:

  • What would success look like to you?
  • How many sales do you think this would generate monthly/annually?
  • What do you need to make this successful?
  • What are some of the risks or challenges you foresee?
  • Where does this align with the rest of the priorities of the company?

You can also tell them this is what we need to do first before we can venture into this new idea/product/investment/etc.

How CFOs Can Drive Revenue GrowthBe Transparent With Data

Do you ever feel that you’re missing a figurative piece to the puzzle? If so, you’re not alone. Many financial leaders are not able to make the right strategic decision (or any decision at all) because they don’t have all the information and analytics they need to budget, forecast, anticipate disruptions, etc. In “Dun & Bradstreet’s recent 2016 Enterprise Analytics Study, [they reported that] only 38% of companies share analytical insights across departments” (Dun & Bradstreet). That is a big problem. Dun & Bradstreet also argued that “with a cross-functional foundation and analytics toolbox, CFOs can improve their organization’s position in the industry, better manage assets, budget more effectively, and predict potential organizational disruption.”

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How CFOs can drive revenue growth revolves around the data they have. They should have access to the following:

Transparency of data helps the CFO or financial leader see the entire picture and steer the CEO in the right direction towards revenue growth.

Be a Financial Leader

In conclusion, the CFO needs to be a financial leader. We emphasize leader because it requires you to communicate, have vision, be honest, and make confident decisions. As you learn how to drive revenue as the financial leader, rebuild your sales pipeline and project accurately with our Goldilocks Sales Method whitepaper. This is one tool that will help you project just right – not too high or low.

How CFOs Can Drive Revenue Growth

How CFOs Can Drive Revenue Growth

1

Flash Reports Are a Game Changer

Flash Reports

When we talk to people who have sales or operations backgrounds, we quickly pick up on their hatred/dislike/disdain/etc. for accounting. We get it. Accounting can be boring, especially if it’s not used for management purposes. But when we talk with the management team either in our coaching workshops or our consulting practice, we always implement a flash report in their company. Why? Because it’s a management tool that should be used by every leader in an organization! Flash reports are a game changer when it comes to leading a company financially. In fact, I will be bold enough to say every company should be using a flash report to make any decision in the company. (Keep in mind, we are not recommending that this is the only tool you should use to make decisions.)

What is a Flash Report?

First, what is a flash report? We have defined Flash Reports (or financial dashboard report) as “periodic snapshot(s) of key financial and operational data.” It measures three factors in your company, that include liquidity, productivity, and profitability. Unlike what sales and operational leaders typically think about accounting, this tool is supposed to guide them with the numbers. In addition, the numbers from flash reports aren’t going to be a 100% accurate. But if they are 80-90% accurate, then they are accurate enough for the management to make decisions.

Flash reports have changed how financial leaders lead the rest of their team. It’s just one of the ways that you could be more effective in your role. If you want to learn more, click here to access our free 7 Habits of Highly Effective CFOs.

Flash ReportsHow a Flash Report Changes the Role of the Financial Leader

Stereotypically, an accountant or someone with accounting/finance background is a numbers cruncher. They want to look at all of the numbers and want the management team to also get excited about every number. In reality, there is not enough time to focus on every number. Instead, you should be looking specifically at 6-8 numbers that drive your business. We call them your key performance indicators or KPIs. Anyone in your company should be able to look at your flash report (a one-page report) to assess what the KPIs are doing.

Not just anyone in accounting cannot create a flash report… It would quickly get out of control because there are so many angles, numbers, and perspectives that you could interpret the data from. Unfortunately, there is not enough time in the day to look at all the data. It would take forever for management to look at all the information and make a decision. We know there is an art to be a financial leader. There is also an art to creating flash reports or dashboard reports. The goal is for the flash report to be prepared and completed within 30 minutes. It should cover a week’s data for the company to quickly pivot or adjust if need be.

How to Prepare a Flash Report

For a flash report to be a game changer, you have to set it up correctly the first time. Prepare a flash report by producing the following sections in consecutive order.

Productivity

First, the financial leader (CFO/Controller) needs to meet the owner or executive leaders to come up with some metrics for the productivity section. Both finance and operations need to be involved in this conversation because this section is what sets up the next two sections. You will know you have succeed when you have an indication of the key performance metrics of your company. These metrics also connect operations to the financial performance of the company. It’s an accountability partner. If you are looking to improve productivity in your company, then click here to read about our insights on how to do it.

Remove some of the barriers between departments in your company to increase your value to the company. To learn more how you can be effective, click here to download our 7 Habits of Highly Effective CFOs.

Liquidity

When you prepare a flash report, this section is where your CEO is going to look at first. It’s the pulse of the company because it tells them how much the company is generating cash (or not generating cash). The cash situation is often the first issue we discuss with consulting clients. Unfortunately, we find a lot of companies are not able to tell you if they have enough money to pay the bills and keep the lights on. Remember, cash is king.

Profitability

This is going to be accounting’s favorite section because it deals with what they focus on! The reason why you need to produce it last is because it needs to connect with the rest of the business. It should give management a rough idea of how much money they made during a given period. You will need to have a good understanding of your accruals if you are going to provide profitability in as part of the flash report.

Remember, timeliness is more important than accuracy in this flash report. There’s a reason why it’s called a flash report! Furthermore, management needs to focus on how the trends change over time.

Flash Reports Are a Game Changer

Flash reports are a game changer in the business world because it pushes companies to break down barriers in the business. We frequently say that CFOs and the financial leader of a company should walk around the office/warehouse and talk with sales managers, warehouse workers, operations managers, etc. Financial leaders need to get out of accounting so that they can lead financially. But the same goes for operations and sales persons. It may not be exciting, but they need to visit accounting.

This past week, we hosted a live webinar for those operations employees that were promoted to a P&L Leader. They were great at their job, but now they manage an entire department/division/etc. So, we touched on how they should be using flash reports as they manage their operation. Anyone in your company can be a financial leader. You just have to have the right tools, and flash reports are a great way to start.

Tips for Monitoring Your Business

Your flash report should be a living, breathing document that your business uses. As a result, we wanted to share some time for monitoring your business as you move forward with your flash report. Include the 3 most recent historical periods in addition to the current period in the flash report. This allows you to analyze trends in the same document. Have your entire management team agree to commit to the document. You may need to adjust it as time goes on, and that’s okay. Review weekly with your management. During these meetings, it may be useful to convert the sections into graphs so that the non-accountants can see what the numbers are communicating.

Producing a flash report is just one of many ways to be highly effective as a financial leader. Download the free 7 Habits of Highly Effective CFOs to find out how you can become a more valuable financial leader. Let your flash reports be a game changer in your business!

Flash Reports Are a Game Changer

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Flash Reports Are a Game Changer

2

The Next Generation of Financial Leaders

Next Generation of Financial Leaders

As the baby boomers are retiring from the workforce and Generation X are becoming the most senior employees, it’s time to start looking at the next generation of financial leaders. Currently, the Millennial generation is the largest working generation in our economy. They have some quirky habits and behaviors – namely, their use of technology. That leaves some executive clueless on how they will eventually take over the leadership of their organization. With the average age of retirement being 61-65 in America, we are quickly approaching a workforce that is solely comprised of Generation X and Millennials. You may be asking questions… What is your part in raising the next generation? How will you pass on the figurative baton (if you are a Generation X or Baby Boomer)?

It’s important to not neglect the next generation, regardless of how their habits might annoy you. Let’s look at where previous generations have adopted their financial leaders.

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Where the Next Generation of Financial Leaders Comes From

Just like when you acquire talent for other positions in your company (especially high-level positions), there are two options. Either you promote from within or you hire new talent outside your organization. There are benefits to both options. Regardless, as Millennials start to climb the proverbial ladder in your organization and baby boomers retire, it’s critical that you start mentoring and providing some structure for them to climb.

Similarly, last year we wrote a blog about one of our interns going to Japan because the workers were not concerned about who was to take over their positions. Japanese workers were so focused on their work that they weren’t having babies. As a result, the Japanese government was facing a pending economic crisis because there were not enough Millennials to take over. The time is now to start looking at potential financial leaders and how to further develop them.

Baby Boomers          1946-1964          Ages 54-72

Generation X          1964-1980          Ages 38-54

Millennials           1980-2000          Ages 18-38

(Keep in the mind that the above age ranges may be different from what you have read. This is because there are no standard start/finish dates for each generational cohort.)

Next Generation of Financial Leaders

Promoting From Within

The first option to replace high-level leadership is to promote from within. This is a great option because they will have seen multiple areas of the company from different positions. They also know the culture and experience how the organization reacts in good and bad times. Although promoting from within is the ideal option for continuing an organization’s mission, it comes with significant costs. Some of those include training, mentoring, and salary and benefits over the years. It takes time to prune talent to eventually promote them.

There is also time to tone parts of the Millennial down as well as enhance the current leadership’s weaknesses. This not only creates a stronger organization now, but it also prepares the organization for the future.

Hiring New Talent

Conversely, hiring new talent brings in some fresh perspective into the company. This would be ideal for a company who does not have the right talent to promote or needs a change in direction for the organization. Many companies use headhunters, retained search firms, staffing agencies, recruiters, etc. to find the talent take over after the current talent either leaves or retires.

The risk of hiring new talent is not knowing how they react to situations in real time. Unlike promoting from within, you are not able to predict the hire’s reaction (at first).


Click here to download: The Guide to Outsourcing Your Bookkeeping & Accounting for SMBs


The Difference Between the Next Generation and the Current Generation

The main difference between the current generation that holds those top roles (Baby Boomers and Generation X) and the next generation of financial leaders (Millennials) is the world they grew up in. For now, we’ll focus on the two largest generational cohorts in the workplace: Generation X and Millennials.

Millennials experienced two economic crises (2000 and 2008), a war on terror, social media, growth of student debt, advanced technology becoming more available, and information at a moment’s notice. They have a reputation for moving around jobs, focusing on technology, and being more risk tolerant. But one of the most important factors in a Millennial career path is that they are mentored, cared for, and valued in an organization. Furthermore, they want to feel a sense of purpose.

Although this description seems far from Generation X, we have found that more than half of Generation Xers want to mentor and give their mentees a sense of purpose. The Association for Talent Development says that, “Through mentoring, Gen X can help Millennials learn crucial people skills—such as empathy, adaptability, group dynamics, employee motivation, communication styles, and relationship building—as well as management and leadership styles. They can therefore increase the odds that younger Millennials will be successful in a future management or leadership role.”

In addition, the next generation of financial leaders are going to be more risk tolerant – knowing that success only comes from failure. They will test more ideas than the current generation. In fact, the current generation could capitalize off of the Millennials to take more risks.

Building the Next Generation of Financial Leaders

When building the next generation of financial leaders, start early and know how to optimize your relationships with the next generation. Deloitte reports that the 6 most important leadership qualities to develop as you are building the next generation of financial leaders include:

  1. Maintain Strong Executive Engagement
  2. Align Leadership Strategy with Business Strategy
  3. Define Tailored Leadership Competencies
  4. Target All Levels of Leadership
  5. Integrate with Talent Management Processes
  6. Apply Blended, Targeted Solutions

As the current financial leader of your company, guide your CEO on how to prune your employees to take over your role when you retire or move onto another position. Download our free How to be a Wingman guide and take your career to the next level and step up into the trusted advisor role.

Next Generation of Financial Leaders

Next Generation of Financial Leaders

 

0

Marketing Fraud

See also:
Intangible Assets: Protecting Your Brand and Reputation
The Red Flags of Fraud
Dealing with Employee Fraud
Marketing Plan
7 Warning Signs of Fraud
Marketing Mix
Protect Yourself: A Guide to Non-Compete Agreements
Does Your Business Need A Financial Audit?
Becoming a Smart CEO

Marketing Fraud Definition

The marketing fraud definition is the false promotion of a product or service and/or the making of false claims. Some of the most common forms of marketing fraud is selling authentic versions of a product for it to only be an imitation or knock-off brand. This issue of false advertising led to the famous expression, “if it’s too good to be true, it probably is.”

Mass Marketing Fraud Explanation

There’s a significant difference between marketing fraud and mass marketing fraud. The US Department of Justice defines mass marketing fraud as “any fraud scheme that uses one or more mass-communication methods – such as the Internet, telephones, the mail, or in-person meetings – to fraudulently solicit or transact with numerous prospective victims or to transfer fraud proceeds to financial institutions or others connected with the scheme.” Marketing fraud can occur anywhere as it doesn’t need to reach a massive amount of people for people to fall for it. But mass marketing fraud is typically hosted on a web-based platform (email, telemarketing, internet, etc.).

Examples of Marketing Fraud

Some examples of marketing fraud include exaggerating claims, false advertising, and misrepresenting the product. Although it is sometimes difficult to see your own company’s marketing fraud,  it is easy to identify other company’s participating in this fraud. Ever seen a commercial for the next supplement that will magically loose weight? If you pay attention to what they are saying, then you may find that they do not mention medication, prescription, FDA, etc. All you hear is about the results, the method, and how taking it will give you six pack abs.

How to Prevent Fraud in Your Marketing

When a company deals with marketing fraud, there are a myriad of issues that stem from it. Some of those consequences include bad reviews, customer backlash, lawsuits, and even prison time depending on the severity of marketing fraud. Needless to say, your company needs to have processes in place to prevent fraud in your marketing because it can have financial repercussions. As the financial leader in your company, you need to know know what marketing fraud looks like and how to flag it if it’s happening in your company.

Know What Marketing Fraud Looks Like

Before you can prevent fraud in your company, you need to know what marketing fraud looks like. It can come in the form of overnight engagement sensation on social media, significant boosts in traffic or followers, and emails made to look like they are coming from someone else. For example, a company that uses social media heavily got 20,000 more followers in a day. That company also saw a 400% increase in comments (and those comments all raved about the product being sold). Although some companies may naturally experience this, you may want to look at the quality of followers you have and if they are even real. Unfortunately, some marketers manipulate the analytics to please the financial leader. But that is fraud.

Flag That Company

If your company is dealing with marketing fraud, then it is destroying the value of your company. But you do not have to continue in old habits anymore and can remove those “destroyers” of value in your organization. Download your free Top 10 Destroyers of Value guide to avoid letting the destroyers take value away from you.

Marketing Fraud definition

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Marketing Fraud definition

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Why the CEO Needs to Like Their Financial Leader

When The Strategic CFO was first founded in 1999, there was a lot of disregard for financial leaders and CFOs. If accountants could do their job, there was no need for a CFO. At least, that’s what many CEOs have thought. But we have been writing, consulting, and coaching those in leadership roles to lead the company financially. Companies cannot simply rely on great salesmen or impeccable marketing campaigns. They need a real strategic financial leader. As the relationship between the Chief Executive Officer and the Chief Financial Officer has evolved, we have concluded that the CEO needs to like their financial leader and vice versa.

Why the CEO Needs to Like Their Financial Leader

These two roles have two different responsibilities in the company, but they also need each other desperately. They are the yin and yang to each other.  This is truly a partnership and without the chemistry, this is a dysfunctional relationship. The CEO has the vision and drive; whereas the CFO has the financial data that should back up what the CEO wants to do. Simply said, CEOs and financial leaders need each other.

CEO Needs to Like their Financial Leader

CEO and Financial Leaders Need Each Other

While we’ve been talking about how the CEO needs to like their financial leader, the financial leader also needs to like their CEO. We have seen that when the CEO and their financial leader (CFO, Controller, etc.) have a good relationship, transparency and confidence is increased. This is a critical part of a CEO/CFO partnership.

Russell Reynolds Associates surveyed more than 100 CFOs and found that, “82% of CFOs surveyed gave their CEO high marks for overall effectiveness. Further, the vast majority of CFOs said they trusted their CEOs. But there’s still plenty of room for improvement. Less than half of our respondents gave CEOs a high score when it came to their ability to coach and develop the CFO. And only 49% of CFOs surveyed said they had a “very strong” relationship with their CEOs, the highest relationship ranking in the survey’s 5-point scale.”

It’s a two way relationship. If the financial leader trusts the CEO’s vision, they will be more likely to support their decision. Conversely, if the financial leader does not trust the CEO, then they are less likely going to support them with the financial information they need to make a strategic decision. Likewise, a CEO is going to trust their financial leader if they try to find a solution to implementing a new strategy, campaign, vision. But they will be less likely to trust their financial leader if they are what we call a “CFnO.” In addition, the CFO must have the confidence and relationship to question the CEO and his conclusions without anyone getting their feelings hurt.

CEOs Need Financial & Strategic Direction

Our team has worked with plenty of entrepreneurs and entrepreneurial leaders over the course of our companies life. That being said, we have also seen how much the CEO needs financial and strategic direction. CEOs need to focus on the future of the company – the captain of the ship. They need to steer the ship to success. But they need someone to analyze the data, advise, and help them direct the ship forward. Furthermore, the CEO needs a wingman – a trusted advisor.

CEOs need a trusted advisor or wingman to guide them financially. Click here to access your free How to be a Wingman guide.

What a CEO Needs Most

The CEO needs to like their financial leader because they need someone to make their flight path clear. As a result, they need more of you (the financial leader) and a wingman to guide them.

They Need More of You

What do CEOs want from their CFOs? They need more of them. There is a misconception between what the CEO needs and what the CFO thinks they need. Check out the results of a recent KPMG survey below:

“In a worldwide survey of 549 chief executives by KPMG, 30% said their CFO doesn’t understand or assist them enough with the challenges they face in running the company. “One thing is clear: something has to change if CFOs are going to close the gap between the expectations of their CEOs and the reality on the ground,” KPMG said in its survey report, “The View from the Top.””

They need more of you, not your “no’s.” Start by providing your insight on how to make their ideas come to fruition. As the financial leader your job is not to be a road block, it to understand the operations and the financials and come up with solutions.  In addition, get involved and start collaborating with your CEO. This will both increase the amount of communication and help them with their challenges.

The CFO should be CEO’s wingman, but it’s often difficult to learn what they want and need. Learn how you can be the best wingman with our free guide

The CEO Needs a Wingman

What is a wingman? It’s a trusted advisor that guides the CEO through business challenges. One way to be a wingman is to stay current with the trends. For example, keep your CEO out of trouble.  Look at trends in your financial statements, your industry and the economy.  Know your ratios, working capital and debt covenants so your CEO does not have any ugly surprises.  A good wingman always has his CEO’s back. Click below to learn How to be a Wingman.

CEO Needs to Like their Financial Leader

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CEOs Want a Wingman

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