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CFOs Need To Understand How The Business Ticks

CFOs Need to Understand How the Business Ticks
Andy Halford – CFO, Vodafone

When I went out to the U.S. in 2002, the take-up of some of the mobile products— particularly voice and to maybe a greater extent, text messaging—had actually at that  point in time happened a bit later than in Europe. So one of the great advantages I had was seeing the explosion, particularly in text messaging, happen in the European markets before it happened in the U.S.

I can clearly remember when I was in the U.S., there were a lot of discussions when text messaging was in its very early days about the extent to which one should price promote the product in order to stimulate the early growth. This was a phenomena that had a sort of networking effect and one shouldn’t be worried if it didn’t all take off on the first day because the more people that started to use it, and the more people that they knew that then started to use it, this had a natural momentum of its own. Hence, we encouraged the business to remain constant with its promotion, not to take early actions that could have had longer term impacts. Sure enough, over a period of time, the explosion in the level of usage that we saw in Europe did eventually happen in the U.S.

One of the lessons for me was that you can get any number of potential customers in to give you views as to what they might do at different pricing levels but actual real-life experience in other territories probably counts for a lot more.

Secondly, there are times when, as a finance person, you will have views on subjects where you won’t necessarily have all the facts to support them, but that doesn’t mean to say that maybe that view isn’t a well-held view. One should be robust in defending a position and spending some time seeing where the market does go before necessarily feeling that one has to go to a secondary option to stimulate growth.

To me, anything that is going to profoundly impact the future growth of the business, or the opposite, is something which the CFO should have an interest in. The closer they are to what makes the business tick, the more aware they would be of where the key decisions are being made, and the more they should be able to focus their time on those issues and not get so much involved in the other issues. But it all comes down at the end of the day to really understanding what is driving the business and being able to see the big picture.