Financial planning and analysis can no longer be done well in a silo, according to Sara Nichols, CFO of Appspace, a Dallas-based provider of workplace experience software. Nichols spoke with StrategicCFO360 about why CFOs need to focus on collaboration, be part of workplace decisions and become better communicators.
In the current macroeconomic climate, how are CFOs resetting priorities and strategies to drive profitability?
As a CFO, I’ve always strived to stay in front of the market conditions that can impact my organization’s profitability, including inflationary pressures, foreign exchange rates and rising interest rates. These are all especially important in my role at Appspace, which is a global, high-growth company.
With that, the current economic environment hasn’t caused a complete resetting of my strategies as much as a clarification or reshifting of priorities. I’m confident many CFOs are taking a similar approach—remaining cautious and preparing for the unknown while not making dramatic changes. As an aside, I’m fortunate to work for a CEO, Tony DiBenedetto, who maintains an optimistic market view rather than a “the sky is falling” approach.
For me, the reshifting of priorities has included increased alignment between my team and other company stakeholders across product, sales, people and culture, and marketing. General and broad awareness of individual business units’ efforts and plans may work in more predictable economic climates. In times of uncertainty, CFOs must be fully aware of customer acquisition strategies, marketing initiatives, sales targets and workforce planning—as all these areas drive profitability.
Building trusted relationships with peers is important for CFOs in every market environment, but undoubtedly is even more important when market shifts are happening. There’s no secret formula for building these trusted relationships and increasing collaboration. I make sure to participate in ongoing and regular meetings to review relevant company data and market trends to evaluate risks and identify areas we need to address.
In some cases, I’ll lead the charge in facilitating the meetings and bringing key stakeholders together.
Most CFOs today want the proverbial seat at the table rather than working behind closed doors crunching numbers. Great company leaders also want CFOs to play a key role in overall company performance and strategy. Thankfully, CFO cross-team collaboration is expected and encouraged at Appspace.
How can CFOs work more effectively with HR leaders to measure hybrid and remote work success?
Many business leaders are mandating return-to-office policies stating that working together in person drives collaboration and builds culture, and this may be true for some organizations. What’s interesting is that these mandates—at least publicly—are not tied to measurable business outcomes.
As the modern workplace continues to evolve, CFOs can work closely with human resource teams to establish clear and measurable success metrics for hybrid and remote work models. While HR has a clearer view of employee engagement and productivity metrics, CFOs can analyze data around talent acquisition, office leases and other relevant metrics. CFOs can conduct ongoing cost-benefit analyses related to business performance and how and if hybrid and remote work is impacting business outcomes.
We know philosophically that an overall better workplace experience leads to more productive and engaged employees. For data-driven companies, data specific to hybrid and remote work can help shape workplace policies and provide concrete business reasons for doing so.
What are some of the new ways CFOs can leverage FP&A to improve overall business performance?
First, I’d say the primary new way of leveraging FP&A goes back to our earlier conversation about fostering collaboration with other business leaders in the company. Today, more than ever, financial planning and analysis is a team effort, not something that can be done in silos, at least not successfully.
While it’s not a new concept, many CFOs are embracing rolling forecasts as part of their financial planning and analysis strategies. The “set it and forget it” FP&A model doesn’t work in fast-changing markets. Rather than relying on annual or static budgets, rolling forecasts allow us to continuously update and revise our forecasts based on market conditions and actual performance.
Finally, as a CFO of a technology company, it’s probably no surprise that I’m leaning in on technology adoption for data accuracy and insights. By leveraging process automation and artificial intelligence, CFOs and their finance teams can focus on more strategic decision-making and collaborative efforts that I touched on earlier.
What are the best ways for CFOs to hone soft skills that are in high demand while managing their departments and day-to-day tasks?
According to a recent survey by Oracle NetSuite, 40 percent of non-finance execs and managers do not believe their company’s CFO is an expert communicator, and 35 percent do not believe their CFO is an expert at managing the team.
At first glance, my reaction was, “Ouch.” Kidding aside, once I honed in on the word “expert,” I believe these same findings could easily apply to other leadership positions, such as a CTO or COO. The true definition of an expert is someone with superior skill in an area, and, as CFOs, we were hired for our financial and business knowledge.
As CFOs gain more influence and visibility in their organizations, I agree that communication and other soft skills are becoming more important. These are areas where I want to continue to grow. One of the ways I am strengthening my communications skills is through our regular town halls. These are company-wide meetings in which I present revenue numbers and forecasts to the team in, hopefully, an informative yet relatable way.
I recently needed to communicate information companywide in a timely and effective manner and collaborated with our chief people officer, Holly Grogan, and our people and culture team to develop the most impactful and clear messaging on the event.
Throughout my career, I’ve also sought out opportunities for leadership development and worked closely with other executives who have mentored me and, equally important, demonstrated what it means to be an effective leader from the ways that they motivate and inspire teams to how they resolve conflicts.
In my role at Appspace, I often look to Tony and Holly as examples of leaders who effectively communicate across a global and remote/hybrid workforce. I worked with Tony many years ago at Arthur Andersen and have known Holly professionally over the years through a women’s forum. As finance professionals develop and manage our careers, we should certainly look to all types of executives, not just CFOs, to broaden our leadership and communications skills.