CFO: Chief Financial Officer or Chief Forget-About-It Officer?

"Don't get your hopes up. I'm demanding a freeze on all new spending!" Those words temporarily dampened an otherwise sunny start to my great day on the road recently. They were mouthed by an independently contracted CFO whom I happen to know and serve with in a civic organization. I was calling on one of his clients while he was there. After my brief but positive meeting with the Director of Business Development, a shadow was cast over prospective new business and a potentially rewarding opportunity for the client.

That company's online presence is nowhere near representative of the value offerings of the firm. They provide services which save their customers millions of dollars. One new client is worth hundreds of thousands in additional revenues to them.

Why do so many bean counters completely overlook the positive side of the ledger? Is their only mission to cut costs regardless of diminished customer service and lost sales support in the process?

From my perspective and long-term experience, CFO consultants often come into a struggling company with the best of intentions: to organize the books for good order and legal compliance as well as to turn an ailing business back around to profitability. What may unintentionally happen in this process is a cheapening of the functions that are the company's best chance to thrive again. Those would be the functions that keep customers loyal and that woo profitable new clients. In a nutshell, sales and marketing budgets are optional to these hired guns.

The deep surgery with the sharp knife can surely stop the bleeding of red ink for awhile. Then, after a few quarters, customers notice a marked quality difference and are already shopping the competition. The absence of robust sales activity for lack of any good marketing support shuts off the pipeline of vital new business leads and new customers.

The CFO consultant might say: Look, we're back in the black in just five months ahead of projections! Meanwhile the competition with the strongest brand and the best reputation for quality service is quietly winning over the soon-to-be former clients of the struggling firm.

Consider this quote from Ted Hurlbut, Inc. Magazine's Retail columnist: If you think you can cut costs by cutting customer service, plan on cutting customers as well.

Lea A. Strickland, President/CEO of the consulting group FOCUS Resources - www.focusresourcesinc.com, makes the following points: Wise spending on your marketing efforts is an important part of generating revenues make selective investments toward generating qualified prospects and getting them in the door to buy.

Cutting costs those that aren't contributing to revenues, capacity, or activities that impact profits may be necessary. Eliminating marketing, business development, and sales efforts to save money may cost you more money in the long run. Invest in growing the business. Conserve on the business expenditures that don't impact your ability to generate revenues and serve your customers. Keep the business growing and going with sound investment in marketing, business development, and sales activities and the cash will start flowing.

Ms. Strickland's credentials include an MBA in Accounting and certifications in Management Accounting, Financial Management, and Business Management as well as key positions at Ford Motor Company, Newell and Solectron-Flextronics. Her successful business consulting track record is one of which CFOs and CEOs may be wise to take note.

Returning to my earlier example, the knee-jerk, Forget-about-it attitude I got from my CFO friend makes me think of someone hiring a mortician to be their life coach, especially if his spending freeze order is implemented. Hmm, just how does one implement nothing? Perhaps the president of the client firm will understand that lucrative new business is a key to surging black ink and sustainable, profitable growth.

A strong brand which exhibits industry leadership on the Web is vital for serious players in any field today!

Cutting brand value and sales support by way of spending freezes on high quality communications is certainly an option. It's an option, however, that should only be risked if you have no competition.

Carry on!

Chuck Sink is the vice president of marketing for Big Hit Media LLC, a website design, online marketing and multimedia production company in Rollinsford, New Hampshire. For more information, visit www.bighitmedia.com or e-mail  chuck@bighitmedia.com