For the past year of ideating, building, and launching FOL-IO, we’ve been talking multiple times a week to CFOs and finance leaders at creative companies: agencies, production companies, media companies, and the like. As a former creative CFO myself, this process has been part product discovery, part sales effort, part affirmative therapy session (unlike at Thanksgiving, my jokes about revenue recognition always land with this crowd). What’s been interesting to me has been the consistency of the conversation - across company sizes and types, we see the same holes in data, the same process breakdowns, and a number of different creative solutions to the problem set. Across those conversations, a consistent picture of the modern creative CFO has emerged: 

But beyond shared attributes, the fastest-growing organizations we've seen also share a set of CFO behaviors. Through dozens of conversations, we've identified four behaviors that consistently show up in the best creative CFOs - forecasting, pricing strategy, operational expertise, and change leadership.

The classic role of the CFO is the person who controls the narrative on what’s happened. Creative principals make the magic and mess; the CFO comes behind with the mop and tells you how big the magic and the mess was (and does their best to clean it up). But as the creative landscape has gotten more and more fractured, and revenue has become more volatile, the finance function has evolved. No longer is it sufficient for the finance team to simply be able to summarize what’s happened; the highest value finance teams are far more focused on what’s going to happen in the future. 

In fact, most of the creative principals we speak to refer to their financial leader as their most important thought partner; the person they turn to ensure the strategy they have set is the right one going forward. To do this successfully, the CFO needs to work hand in glove with the operational teams; and to think in a language beyond just dollars and cents. They need to be fluent in creative resourcing, in production nuances. They need to understand their organization's cost structure, and how that can (and can’t) support their revenue projections.

The TLDR: If you’re finding problems when you’re closing your books, that’s two months too late.

There’s a lot of noise around pricing, pricing strategy, and changing value perceptions in today's market, particularly in the creative services space. What we’ve seen in many of our conversations is that the CFO is emerging, but not yet fully emerged as a key constituent on pricing. Oftentimes, the new business or accounts team are put in charge of pricing client work, and the CFO is stuck in an “approval” position. However, in this moment of developing pricing strategy, we’re seeing successful organizations pull their CFOs to the front of the pricing discussion. They treat pricing not as a sales decision, but as a strategic finance decision. 

Why? Well, deliverables and outcomes-based pricing require more than just a cost calculation; as we’ve discussed here before, they are fundamentally a risk transferring mechanism. They require a strategic financial lens, based both on past performance and an understanding of what the client and market will bear. CFOs are the holders of that information internally (your head of sales probably can’t tell you your margins from the past 6 months), and successful orgs are asking the CFOs to bring that understanding and knowledge to the table as they work through this change with client-facing teams. If you're a CFO contemplating a change in how your organization prices its work, this is your call to move from approver to owner.

If there’s a through-line in all of the above, it's that the finance leader needs to be second to none in their understanding of what makes the organization tick - of how, and why, the work is priced and executed in the way it is. Creative CFOs, unsurprisingly, need to understand the creative process. They cannot feasibly tell you why it isn’t working without a healthy understanding (maybe even respect) for its various peculiarities. They need to understand the workflows to a relatively shocking level of granularity, so that they can sufficiently understand how the small details change the larger financial outcome - and most importantly, identify where processes are broken so that they can use their authority to fix it. 

What holds back finance leaders from leaning into the creative workflows is usually either fear or disdain; if it's the latter, there are certainly other fields that will cause fewer headaches. I used to fear “overstepping” into creative territory, where I felt like I was either beyond my depth, or where my voice wasn’t wanted. But as my co-founder always says: “if I find a helicopter in a tree, I don’t need to be able to fly a helicopter to tell you the pilot fucked up”. At the end of the day, the CFO owns the EBITDA number. If you're accountable for the outcome, you need to be willing to engage with the process that produces it. Gone are the days when the “suits” lived in a separate world from the people doing the work. The best creative CFOs aren't just experts in finance - they're experts in how their organizations create value.

In the organizations we speak to, the CFO is often the person leading the charge on pushing new systems and workflows forward. Not because they’re the power users of systems - that usually resides in the hands of the ops teams - but effective CFOs tend to see a bandaid and want to rip it the fuck off. 

That’s because CFOs spend all day seeing the results of failing to make change - they see the slipped timelines, the leaking margins, and the bottom line outcomes. They are the people best-positioned in an organization to use data to drive process changes. Our onboarding work often puts us directly in the middle of organizational change - whether that's implementing time tracking where none existed, bringing production and operations teams together, or rethinking how people are incentivized. And in every organization, there will be stakeholders whose primary concern is how teams will react to change. We find that the best CFOs keep one foot in that present, but the other foot firmly in the future. After all, what’s the point of all that power if you’re not going to use it to move the organization forward? 

In my time as a creative CFO, I often joked that the majority of my job was being the “No” Witch. But the modern CFO can, and should be, much more than the scorekeeper or the person always stuck saying “no”. (You can’t stop being the adult in the room, though). The best creative CFOs are forecasters, pricing strategists, operators, and change agents. As revenue becomes more volatile and organizations become more complex, the companies that win won't be the ones with the most data. They'll be the ones whose finance leaders can turn that data into decisions. 

If you can’t see the chessboard, you can’t play the game. 

As always: shoot us an email to find out how FOL-IO can help your organization use data to drive change.