So we’ve been thinking about those 30 minutes.
Accountants are smart so why is it they gravitate towards cost despite the studies and the common sense telling them that 30 minutes focused on $30 revenue will have an exponential impact of a repeat client, a referral and other growth? While 30 minutes spent saving $30, saves $30.
We think it’s fear of failure.
It is the probability of success that stops the stereotypical and old-fashioned accountant from prioritizing a focus on revenue over cost. It is staying in their comfort zone and their domain of control vs. getting into the business.
Think about it, an accountant who has 30 minutes to spare and says, “I’m going to use this time to save us $30” likely will do exactly that. If they start out thinking they can do it, the probability of them succeeding is super high! After all it’s often just cutting something, calling a vendor, doing a price comparison or other simple tasks. They can do it within their office, at their desk, or with the support of their finance team.
And, as we’ve said, this isn’t a binary choice. Saving costs and reducing your spend has merit. Having a finance team successfully support the business by managing costs is very valuable. It also lets them feel like they are making a difference and contributing. A modern CFO supports and coaches their team in these efforts. Cost matters. It’s not a waste of time to focus on it.
But, there’s a hierarchy and the priority should be growth and revenue. So why do so many accountants gravitate so strongly towards a cost focus?
The more we think about it the clearer it gets: it is the probability and fear of failure. Spending 30 minutes on revenue to earn $30 isn’t quite as easy. In fact, the probability of even the best CFO accomplishing this single-handed is very low, maybe even nil. They are back-office after all and not the linchpins or moneymakers. So those revenue-focused 30 minutes is going to require they get out from behind the desk. They’ll have to venture into the business and they’ll have to business partner and strategize as an executive. They can’t succeed on their own or in their own domain.
If your Finance Leader doesn’t prioritize business partnering with operations and working on strategy as an executive you’ve got additional problems. But that’s arguably a different topic.
But back to the 30 minutes.
So now that the CFO is out in the business focusing on revenue they really have only 15 minutes because in most cases they need someone to coach and work with (15 minutes per person for that same 30 minutes spent by the organization). And let’s face it, two heads might be better than one, but there’s no guarantee that we are going to achieve that original goal “30 minutes to earn an additional $30”. The probability, even with us working together is still not extraordinarily high.
But if the goal is reasonable, it’s still probable enough. And the $30 we earn will exponentially impact our business so the math still works. The exponential impact grows if you’ve lit a fire with operations to stretch their revenue and be creative and focus on growth.
It’s still clear that we need to spend time on revenue and growth but now more obvious why it’s infrequent.
Contact us to learn more about #financeleaders, #businessadvisors that focus on growth and use the modern CFO methods. We might be a little different than your typical number counter!