From CFO To Brand Champion

Larry LightDecember 17, 20204 min

In the early 1990’s, Ford Motor Company initiated a sweeping internal branding project. The project entailed articulating the brand promises for the corporate brand, the automotive brands and each brand’s car models. There was a huge 3-day employee event staged in Cobo Hall. As part of the event, each employee received a newly written marketing handbook. The leader of the brand project was the CFO.

When this author joined McDonald’s as the global CMO, my biggest supporter was the CFO, Matt Paull. He understood that how you manage your brand is how you manage your business. Mr. Paull recognized that brand management is business management. From the CFO’s vantage point, the strength of the McDonald’s business was built on the strength of the McDonald’s brand. Keeping the McDonald’s brand relevant in customers’ minds was essential for enduring profitable growth. Matt Paull was one of McDonald’s biggest brand boosters.

Although some finance departments have been complicit in the ugliness of financial engineering, many brand-businesses have benefited from CFOs who are brand champions. These CFOs understand the absolute necessity of investing resources in their brands. For this to happen, however, finance departments must be integrally involved in brand-business management. Effective brand-business management is not an academic exercise. It makes business sense.

Today’s CFO Defined

Some say that CFOs see brand marketing as a bottomless money pit where good money goes to die. Some people see the finance function as focusing only on keeping costs down. However, these ideas are outdated stereotyping. The CFO is the financial conscience of the brand.

In response to an interview with The Wall Street Journal, a finance executive said, “We used to be the bean counters. Today, we have to understand how the beans are grown, how they’re harvested, how they’re taken to market, so we can provide advice in addition to assurance. It’s not good enough anymore for the company to just know how many beans they’ve got.”

Finance helps assure that brands focus their resources on the strategies and activities that really matter. In 2002, Matt Paull knew that McDonald’s had to become more efficient in allocating resources, improving productivity and investing in new restaurants. He also knew that McDonald’s had to invest in updating existing restaurants, increasing the quality of innovations and revitalizing the McDonald’s brand communications.

There are several definitions of the word “finance.” This one makes sense in today’s brand-business context: “finance” means ‘the management of a supply of money.’” In other words, “finance” helps assure that brand-businesses are properly managing their limited supply of monies.

We often also hear that the CFO only cares about the bottom-line. And, yes, being profitable begins with improving productivity and eliminating waste. The more efficient brands become, the more resources brand-businesses will have to spend on those critical brand-building activities. However, for enduring profitable growth of the bottom line, CFOs know that brands must have quality revenue growth of the top line.

As a brand-business’ financial corporate conscience, CFOs and their finance departments have the responsibility to optimize the allocation of limited resources for those things that will build brand preference. As brand preference goes up, customers will purchase more often. As brand preference goes up, price sensitivity goes down. Building brand preference makes money.

Needs-based occasion-driven market segmentation is a foundational marketing construct. The finance department can help by addressing questions such as:

What is the financial size of the opportunity for each brand?

Where are the white spaces?

What are the priorities?

Marketing And Finance: A Critical Partnership

A marketing partnership with finance helps assure that brand-businesses allocate resources to the right geographic markets and to the right brands in the right needs-based, occasion-driven market segments. The real challenge for the CFO is to assure focus on those things that will really make a difference. Finance is the filter for helping us prioritize.

A second quarter 2018 Deloitte (the global professional services company) study among 172 CFOs showed that the role of the CFO had expanded into areas such as business planning, strategic planning, information technology, data management, procurement, risk management, compliance and other operational functions.

Coronavirus has added to CFO responsibilities. As one CFO described, being on top of operations has become essential. CFOs, he said, are fast learners. CFOs must be able to quickly adapt to changed circumstances. Using technology for things such as forecasting, capital management and efficiencies throughout supply chains, finance is leading the way for organizations to become more data-driven. According to the chief accounting officer and global controller of one enterprise, “We’re in a position to leverage data access and our functional expertise to help drive strategy and inform business decisions.”

Moving forward, brand-business planning and financial processes must become so integrated that managing the business and managing the brands are inseparable thoughts. Revenues, cash flow, profit margins, return on investment to all stakeholders depend on having strong, powerful, preferred, growing brands.

Beth Kaplan, managing director for Center for Controllership, Deloitte & Touche LLP said, “The added value that controllers and other finance leaders can offer their organizations derives from providing proactive, predictive insights rather than transactional, reactional historic information.”

Marketers are passionate as voices of the customers for brands. Finance is the voice of the fiscal conscience. CFOs and finance keep brands from going astray on the wings of our hopes. Finance is the inner voice guiding and challenging as marketing builds brand preference. Often these two voices contradict each other. That is healthy debate. Too often passion can get in the way of the best strategies.

With the passionate conviction of brand-business leaders combined with the conscience of strong financial discipline, brand-businesses will go forward generating enduring profitable growth.

Contributed to Branding Strategy Insider by: Larry Light, CEO of Arcature

The Blake Project Can Help Your Brand Grow: The Brand Growth Strategy Workshop

Branding Strategy Insider is a service of The Blake Project: A strategic brand consultancy specializing in Brand Research, Brand Strategy, Brand Growth and Brand Education

FREE Publications And Resources For Marketers

Larry Light

Connect With Us