Great CEO’s and CFO’s see both the inside and outside of the firm. The inside perspective is natural, it is the default mode in corporate life. The outside viewpoint is harder but it offers a wealth of insights. Although there are many outside perspectives, a crucial one is the customer’s viewpoint. When I work with a company I am vitally interested on how customers perceive the product and the company. Here are five questions you can ask yourself about the customer’s perspective.
1) Do you respect the customer? The customer perspective doesn’t come easy to finance executives. I’ve heard senior executives refer to their customer base as stupid and cheap, and similar to cows. Although you don’t have to use your company’s products to be a good executive, it helps.
2) Do you get customer feedback? There is a saying “the best fertilizer is a farmers’ footsteps.” Great executives get in the field and see how customers react to the product. I hate business travel, but there is no substitution for getting great customer feedback. Although CFO’s can’t spend the same amount of time the CEO spends talking to customers it is an important part of the executive role. I know a lot of marketing execs swear by big data analytics. I love big data but stories drive passion and illuminate the data.
3) Are your customers thrilled or merely satisfied? Are we promising one thing and delivering another? Often the internal “story” we tell in the office is not connected to the reality in the field. My rule of thumb is to never give a customer something they don’t want and won’t pay for. Additional features increase price without increasing value. Engineering teams will design the ultimate product, management egos get wrapped up in featurism, and pretty soon that great little software tool bloats up. Be clear about what you are promising, make sure it is what the customer wants and then deliver on that commitment.
4) Are your operations streamlined to deliver on the promise you’ve made to the customer? The CFO has a key role in identifying where efforts (and costs) should be placed. Sometimes you centralize (and sometimes decentralize) but figuring out the best tradeoff in location, cost and service can increase profits significantly.
5) Is your business model congruent with what you’ve learned? Although the CEO owns the business model, the CFO is key in developing the strategic plan. I’ve always drafted the agenda for strategic planning sessions, including identifying the key strategic questions. Having a handle on the customer allows a CFO to ask the right questions, and shape the strategy so that the intersection between your company and the customer results in profits.
Alan Kay said that “A change in perspective is worth 80 IQ points.” The fastest way to be smarter about a problem is to change your perspective.
Dr. John Zott is the CFO for Carlson Wireless Technologies, and Principal consultant at Bates Creek Consulting. John is the chair of the Careers Committee at FEI Silicon Valley, a senior adjunct professor at Golden Gate University and comments regularly on issues that affect consumer businesses. If you are a former student, colleague or would just like to connect – reach out.