How to unlock financial data as a growth tool, no matter your business size

This article was originally published on CFO on September 19th 2023.

For more than a decade, I’ve held key financial positions with Mailchimp, Visa, Intuit, and Pipe, with front-row seats to the inner workings of small and mid-sized businesses. During that time, not a day has gone by that I wasn’t immersed in data. But the way we leverage data is changing, and with it, hopefully, the way you look at your own business data. 

There’s a common misconception among companies of all sizes that CFOs are focused entirely on financial statements and should be heads-down looking at that bottom line. But in today’s world, there’s more than one bottom line and more than one way to get there. We’re all looking for an edge—either a way to get ahead of the competition or a way to improve our own performance—and I believe comprehensive performance data is the key to finding that edge.

Data beyond dollar signs

We live in a complex world, and the complexity is only going to keep accelerating. Where CFOs once really were limited to things like financial statements for insights, we’re now connected to more data and potential to measure performance than ever before. We have data measuring every part of the customer experience, from acquisition to engagement, performance, and attrition, all at our fingertips. Not only that, but we also have smarter tools to help us analyze that data with the help of AI and machine learning. 

All of this leads to two major shifts for the modern CFO. First, inputs from so many different places can revolutionize the way we make decisions. Instead of waiting for data that is backward-looking, we have the potential to invest in near real-time information. To make the most of all this data, we must stay connected with the tools and know-how to analyze it. Anything else is just asking to be left behind by the competition. 

Secondly, CFOs must become experts in more than just the dollar signs and contribute to the company more broadly. In a complex market where small businesses and large corporations manage across multiple sales channels, compete for talent, and make financial decisions to grow their business, the world is more centered around data than ever. If you can help drive smarter decisions across functions, you’ll add value our finance forefathers and mothers only dreamed of.

Most companies I talk to ask about the tools and processes to make data-driven decisions. Here are five steps I suggest to them, and to you, to get a handle on your data and make the most of it for your company: 

Commit resources to data quality

Gone are the days of making financially or analytically inclined employees among your last hires. It bears repeating that companies that fail to prioritize data will be left behind. You need to reflect that value in your hiring decisions and the tools you invest in. 

Hire data-savvy people early on and equip them with the technology to capture, see, and analyze data in the best way. This will result in high-quality, usable data that will move your company forward and lead to much better decision-making.

Align your team to what is important 

With so much data out there, knowing where to focus is important. Make strategic choices about the metrics sacred to your sales and marketing funnel, customer satisfaction, and profitability. Once you know what to track, you can align your team around these numbers so everyone is on the same page. There’s nothing worse than monitoring metrics that don’t align with your goals or having your teams pour effort and time into work that moves the wrong needle.

Agree to regular reviews

We all know that setting goals only helps if you track your progress. In the same way, monitoring key metrics in your data is only useful if you review them regularly. Determine the best frequency for these reviews and who needs to be involved and stick to that schedule. Remember, just because you have data does not mean you have to review it with your team every day. Give your data some time to bake so that your reviews hold real meaning.

Choose your battles

With the right people on your team using the right tools, you can be confident that your data is accurate. This sets you free from doubt and lets you foster healthy debate around what to do about the data, not the data itself. This is an easy point to gloss over, but it’s key to the power of good data. With a shared understanding of what the numbers really measure, you can focus your time and attention on building strategies and taking action.  

Commit to action and track the progress 

All of these things move us toward an ultimate goal: a culture that embraces the discussion and evolution of strategy. All this data makes it possible to see shifts beneath the surface and, in some cases, even predict them before they arrive. Meaningful progress in our companies comes from embracing those shifts and taking committed action as a result. That’s how the data-driven CFO becomes a driver of results.

Conclusion

As CFOs, we sit in the perfect position to harness the power of data. We’re well-equipped to make analytical decisions based on hard numbers. Now we need to direct that analytical thinking to more than just the financials. With accurate, reliable data, we can contribute to the company in new and exciting ways that have an outsized impact on the bottom line and beyond.