Guest post by Robert Herzog, chief financial officer at Harrison College.
You’ve been in this meeting. I know you have.
“We can’t afford that. We’re not going to make our numbers this year, and this will only put us further out of reach.” Or better yet, “Social media is for the college kids, it has no discernible impact on OUR business.”
Yes it came from the corner office, the one held by the chief financial officer. And if you heard those words, chances are your organization is already falling behind the competition.
Have I lost my mind? The finance execs are supposed to be the ones testing all the new organizational theories, right? They are the ones who should be funneling new investments through the coveted ROI model to ensure cost of capital is exceeded. Well sure, that’s still the case mostly. Except when its not.
While the Internet was blowing the organizational model of the 20th century to shreds, the way in which businesses fundamentally ‘account’ for return has also been tattered. How exactly can you quantify the increased conversation around your product or service? How do you measure your increased brand awareness in a new market that you’re penetrating with two million dollars of venture funds?
The answer depends on your organizational aim. In today’s environment you need to contextualize your goals to the specific time in your organization’s life cycle. Yes, there are different answers if you’re a Fortune 1,000, or a start-up. Even within the Fortune 50, different rules apply. How your finance team models these investments just might be the difference between your capturing that new client, and being beaten badly by your quicker, smarter competitor.
Once you’ve mastered the measurement models with your finance chief, start talking. Literally. Talk about the conversations.
The conversation inside your company around acquiring new customers. The conversation with the client you just lost. How about the online conversation describing your brand?
The fundamental business challenge here is: How can you apply resources to expand the conversation that’s most important to your success. Get creative. Get everyone involved. But get busy. Yes, I know that can be difficult. To go back to that meeting you’ve been in, if you’re hearing, “That campaign is great for marketing, but won’t help us make any money,” chances are you need to spend some time educating your CFO. Take the time. Your organization’s future depends on your success.
What do you think? Are the finance execs in your company up to new measurement models? Are they open to investing funds in the right profitable conversation?
Robert Herzog is chief financial officer at Harrison College, a higher educational institution committed to serving the needs of 21st-century students. Follow his tweets for random musings on leadership, change, the future of higher ed, and baseball.