It seems Finance has taken over Strategy’s role in recent years (our fault, not theirs), and we know this can strangle a business. The CFO tells the CEO to keep operating margins up, so pushes down on R&D, marketing, training, and just about anything needed to develop. So we keep slogging along with little growth, just about keeping investors calm with decent ‘returns’.
At least this might keep business risk under control – right? Maybe not. If the business is squeezed so it only just about has enough people and revenue-spending to keep afloat – what happens if market conditions worsen, competition hots up, or some misfortune arises? Our top-line numbers suffer, and we have no slack whatever to respond. If the CFO is still in the driving seat, she or he will likely urge more cost-cutting, making matters still worse.
I hadn’t spotted this before – Finance-led strategy probably gives us the worst of both worlds!