I know that analogies work better when they are not based on things that became obsolete in the 1980s but I have an excuse. I am the son of a machinist who worked for Holley Carburetor for 19 years. And as a youth, I worked in gas stations in Detroit where I watched mechanics tinker with carburetors to improve a car’s performance. Forty years later, I still think of a CFO as the carburetor for your business.
Optimizing the Mix to Drive Performance
Before electronic fuel injection obsoleted it, the carburetor was an integral part of the internal combustion engine because it determined the optimal mix of fuel and air for the engine.
Determining the optimal mix of resources for businesses is something we CFOs train ourselves to master. Experienced CFOs know that a strategic allocation of a business’s resources can dramatically improve the performance of a business.
This “CFO Thing” in our Heads
I often imagine that I am creating this “CFO thing” in my head that acts as a carburetor and looks something like this:
This “CFO thing” is the collective knowledge we gain by assessing internal and external conditions to guide a business planning process that also entails monitoring performance to learn how investments and initiatives effect performance. We develop metrics that teach us what works (or doesn’t work) across the broad range of economic and competitive landscapes. We develop instincts that help us strategically allocate time, money, and energy to drive performance.
Improving with Experience
Here’s where the “carburetor analogy” breaks down: Carburetors do not improve with experience, but CFOs do. With each passing decade, we add the lessons learned under various economic cycles and competitive landscapes to our knowledge base. With each planning process and subsequent review meetings, we learn how to get better at developing strategies and tactics to drive business performance.
The pace of improvement accelerates for fractional CFOs with multiple clients as we get to learn from each of our business planning and performance monitoring experiences. What we learn from one client’s success or shortcomings helps us with the other clients we serve.
The Multiplier Effect of the Florida CFO Group
There is a multiplier effect when we CFOs can tap into the collective brain trust of the 32 Florida CFO Group partners. Our secret sauce is the way our 32 experienced CFO partners share their insights with each other to help us better serve our clients.
To learn more about how your business can add an experienced fractional CFO from The Florida CFO Group to your team, click here.
