100. Don’t Make This Fractional CFO Mistake In 2024 (Or You’re Fired)

Foreign.

What do you do as a fractional cfo if one of your clients is stuck in the mud when it comes to setting strategic goals for their company, they just can't figure out what their goals should be. As I've told you before, as a fractional cfo, you need to know what their strategic goals are so that you can put the strategic financial plan in place. And if you're not doing that, you're not going to have a job for very long. I'm really excited about today's episode because I've got a case study where I'm working with another fractional CFO who's struggling with this exact problem.

In today's episode, we're going to work.

Through that case study together and I'm also going to share with you some very specific things that you can say to your clients. Some non obvious kind of metaphors that you can give your clients that a lot of times will unlock their roadblocks. It'll get them past those roadblocks so that they can put some strategic goals in place and you can do your job. If you've ever had a client that struggled to get goals out, you don't want to miss this episode. Let's dive in.

My question revolves around a relatively new client that I've got. I've had them for about four months. They're growing quickly. They're. They were less than a million dollars in annual revenue last year, but they're expecting to be about $24 million in annual revenue next year. And in the past few months, they've come in with about $2 million worth of annual revenue or $2 million worth of revenue. So they're growing quickly and there's a whole team of them. There's a CEO, a CEO, there's a key stakeholder shareholder, there's somebody else who's in on the executive team who hasn't really got a title yet, and they're hiring salespeople and a whole bun happening and it's going great. I've been able to give them some good direction. They've worked fairly well with me. But when I have a CFO report meeting or CFO check in call meeting with them, there's a whole panel of them. There are four or five of them plus an executive assistant. And so it's a little bit like herding cats. And I've got my scope of work nailed down pretty tightly with them and I'm trying to track action items and I'm trying to get them to dial in on their Goal setting. They haven't got a corporate set of goals to this point, so I'm trying to lead them in that direction, but there's so many of them, I'm having trouble driving depth. I've been attempting to get them to spend some real time on goal setting, either on their own and then come back to me or with me or something. But the most I can get them to do so far is, is throw a little bit of, of this and that during our meeting. So my question, I guess is if there's some better way to attack a situation like this, or if there is a specific way to attack a situation like this, I'd love to hear it. Or just even just your high level thoughts, if you've got any. I know it's, it's very specific, but, but still, if you could speak to it, I'd love to hear what you have to say.

That's not an uncommon problem like this. This is actually something that, especially when you start having, you know, we call it like a leadership team or an executive team, this is part of what you gotta solve for as, as a fractional cfo. So just know that you're not unique, you're not doing something wrong. This is just part of, of what we do. So a couple questions to really, to be able to give some, some more specific answers. And so what I heard you say is you're having a hard time getting them to define like strategic goals, which is making your job harder. Did I hear that part right?

Yeah, that's fair. Yeah, I'd love to have some goals laid out. And so far we're just, we've got a few laid out, but it's not comprehensive enough to really drive the strategy yet.

Yeah, so one thing, change the language. You wouldn't like to have some goals. You will fail miserably as a fractional cfo absent goals. So like, let's just understand that this is an actual important problem that is critical to you staying employed by them. Because without goals, your light, you have a shelf life that is probably measured in months, not years. Okay, so let me just start by saying that this is a problem you must solve. Okay, so that said, one of the other things that you mentioned, I want to get clarity around this word is you said, I have asked them for goals. Who have you specifically said to come up with goals? Did you give it to them or.

Last CFO report called, I was speaking to the group, I was trying to establish who the task holders would be for coming up with the goals. So the CEO spoke about it, but he had, hadn't really spent a lot of time thinking about it. It was to COO and another one of the people on the operation side and, and told them about, you know, here's why we need them. This is not just a, you know, minor thing, it's an important thing. I'm going to focus on it in the next call. But you guys don't even have like a mission vision, value statement at this point. We need to really dial that in. So I'm at the point of, yeah, I'm floundering and that's why I'm asking the question. But yeah, that's kind of where I'm at. Does that help?

Oh yeah. Well, that was the answer I was expecting.

Okay, okay, so.

So we're good. I just had to validate, but I didn't want to make an assumption. We got tragedy, the commons. And so what you've got to do, all of the things that you just mentioned, they have to fall on the CEO. That setting company goals isn't the job of the COO. Setting values and vision that's squarely on the CEO's shoulders. And so what I want you to do is direct the CEO, like really help them understand, like, look, without goals, comprehensive goals that are aligned with the vision of the company, we're all just wandering around in the dark here. And what I heard all of you guys say is that we want to strategy, we want direction, we want clarity, we want the roadmap. And all of that is predicated on having a very clear understanding of where the company's going and what the goals are. I can't do my job to give you guidance on what's going to help you get there financially if I don't know where we're going. And so every month that we don't have those goals, we're wasting money, right? Maybe this is a one on one with the CEO or the CEO and the coo, but I would give the direction to the CEO. Like listen by our next call or buy whatever date I want you to come back and you can send me these ahead of time if you want. But we need three very clear goals that are at least one year or three years in the future. A lot of times if they've never had goals, thinking three years or five years or 10 years in the future is daunting. So you might say, what are the goals that we want to hit by the end of this year? This is a, this is a great example to give them. Hits the light bulb. It's December 31, 2024. We all meet up to toast in the new year together. We literally raising our glasses and we're toasting. What an amazing 2024. We just had specific things that we're toasting to that we accomplished this year that make us super excited for the next year. So if they're stuck on coming up with goals, just put it in terms of like, we're having a toast. Why are we so excited on December 31st of next year? They're like, well, we had record revenues, we got all of that debt paid off. You know, we paid back our, a bunch of our shareholders or like, whatever, give them some of those things. But put it in terms of that, like, we're making a toast. And a lot of times that'll unlock some of those ideas that get them kind of forward looking and goal setting. Now your job's a lot easier. You're like, okay, got it. I can work with those things. And then you can start putting different strategies and tactics together financially. You can start putting projections together that are going to result in those toastable things. But I tell the CEO like, look, I'm going to challenge you right now. You've got to, you've got to spend the next 30, 60 days really thinking through where you want to send this company. And if you want to, I would say like, look, if you need help, CEO, let's hop on a call step separate from this and I can work with you one on one. If you want to get some input from your COO or you want to get input from the investors, that's great. But you can't delegate setting the vision and the company goals. You can get input, but you can't delegate that responsibility. You got to do it. I'm happy to walk alongside you in that journey, but that needs to be one of our big focuses over the next 30, 60, 90 days is figuring that out and be that person. I talk a lot about executive level leadership. This is where you can step in and provide executive level leadership. This is where you can step in and provide executive level accountability. Right? You've got to put it on the CEO shoulders. Anytime you're coming up with those goals in the tactics, you got to assign it clearly to one person. When we hear them, there should be a flag. Hey, I'm tasking you guys. Use guys. You know, if you're from like Brooklyn or forever, people say that, I don't know, it's not Alabama. We don't say that in Alabama. But you got to step in and be that person. Like, no, no. We're going to have Tragedy of the Commons. We're going to be back on this call next month. Who owns this? And then put their name in there on the CFO report or wherever it is you track that stuff.

Okay.

Okay. Is that helpful?

It helps. It helps validate a lot of what I'm thinking and gives me. Yeah, it gives me a bit of inspiration. So that's exactly what I needed. Thank you.

All right, my friends, I hope you.

Found this week's episode helpful. I cannot wait to see you back here next time.

I'll see you then.