Sometimes getting a glimpse of the wrong path is a useful confirmation that you’re on the right one. When you see the mistakes others have made throughout history, you’re better able to avoid them yourself. That’s especially important for CFOs, who control the life-blood of their organization – its finances. With that in mind, let’s take a look at the road not taken and all the pitfalls along it that can limit your company’s growth, stunt its resources, and drive business elsewhere.
Hire the Wrong People
Too many CFOs have found themselves with a group of outstanding individuals who somehow never manage to develop into a team. Resumes and work histories are important, but company philosophy and office culture matter too. Startups are especially likely to be guilty of hiring standout superstar employees who don’t necessarily fit with the culture that’s been established. Hiring from outside can also mean overlooking the talent the company already has.
Don’t hire a rock star if your organization’s into classical music. Start by hiring people who fit with the overall company culture, and then invest in the talent you already have. Once you’ve taken stock of what you’re working with, you can hire to fill the gaps you know you have rather than the gaps you think you have.
Ignore Customer Experience
Price, quality, and convenience used to be the greatest considerations for customers. They still matter, but with the internet, your company’s prospects can get just about anything from anywhere. If you don’t separate your business from the competition, you risk losing customers to your competitors – and that isn’t just a concern for the marketing department. The finance team also plays a role in making sure customers feel at ease doing business with your organization. You’re also a vital part of ensuring that investors and stockholders are well informed and consider themselves integral to your company’s success.
Spend some time outside of your office and talk to the marketing and sales teams. You’ll learn more about the people who supply the revenue on which your budgets and forecasts are built.
Scaling Too Fast
Growth is a good thing, right? Of course it is, when it happens at a pace you can manage and sustain. Scaling too quickly can put immense strain on the resources you have, leading to the quick accumulation of debt. You can probably think of more than a few businesses that expanded beyond their means and later folded when they saturated their market and could no longer sustain their size.
Untrammeled growth and being first to market with a service or product is the dream for many start-ups, but sometimes it’s better to offer the right solution, not just the first one. Taking your time to learn about your marketplace and the competition you’ll face can pay off as you learn from their mistakes and roll out a superior product.
Be Where Your Customers Aren’t
The ubiquity of digital technology and social media has put pressure on businesses to grow at an exponential rate. Often, this means considering opportunities that aren’t necessarily a good fit for the business. Tech firms are notorious for over-valuing and over-purchasing hot new apps, only to find that once they get there, the market has moved on.
To keep the business on track, make a list of what not to focus on. It sounds counterintuitive, but with a list of what you don’t want, you can develop a laser-like focus on projects and acquisitions that truly benefit your organization. Evaluate your not-to-do list from time to time, for instance, when your initial product or service is successful and generating enough revenue to support an additional venture.