New rules of the creative economy: The evolving role of the CFO

Creativity is only valuable if you are courageous.

Approximately one year ago I was preparing to embark on the next phase of my professional career as the first-ever chief financial officer for Johannes Leonardo, and my first time in a C-Suite position. Throughout my career I have always been a huge believer that creatively brave agencies will always be healthier businesses than their more conservative, traditionally focused counterparts. And while I believe you cannot solely run a creative agency via a spreadsheet,  it does beg the question - what is the true value and cost of creativity?

Over the past several  years, there have been a lot of reasons for agencies to be concerned about the long-term viability of business. We are currently in an age of advertising wrought with consolidation. In-house agencies, consulting firms entering the creative space, and greater segmentation of the way marketers reach consumers have created a perception currently in our industry of upheaval, uncertainty, and negativity. Layered on top of the fact that the average tenure of a CMO has dropped to approximately 4.1 years, which incentivizes the short-term over the long-term.

In the midst of all of this, what I have realized is that creativity is only valuable if you are courageous. Courageous enough to say no, to have strength in your convictions, collaborate in the right ways, and to give your people and talent the bravery to do so.

As I look ahead over the next twelve months the role of finance sits at an interesting inflection point in the creative sphere. The modern day CFO cannot solely be about efficiency and savings. But rather about brave value creation and culture building.

The power of ‘No’

As businesses grow, it becomes imperative that they prioritize relationships that are rooted in mutual respect, aligned values, and collaboration. These types of relationships are based on trust, honest conversations, and a focus on long-term brand building. From the agency perspective they foster courageous creative output, work-life balances, low employee turnover and sustainable cultures. All of which ultimately begets better work, and greater ROI on marketing spends. It’s a win for everyone.

It can be incredibly difficult to walk away from a creative assignment or opportunity. Establishing clear ways of working and alignment up front is essential. The word ‘No’ can be one of the most powerful tools in the agency tool box, and sometimes the best deals are the ones that you are willing to walk away from.  

The beauty and power of internal collaboration
It can be very easy for a finance person to fall into the stereotype of "bean-counter." You know the type: The answer to every question is a hard no, aversion to risk, and maybe having too close of a relationship with an excel spreadsheet.

As the creative services industry enters its next phase, it is incumbent on the finance discipline to work in different ways. Internal collaboration is the backbone to how creative agencies run in the new economy. I believe that finance needs to be at the forefront of that. Rather than being seen as an impediment, finance should be a valued partner. This can manifest itself in many different ways from compensation models with clients, incentives for staff, and aligning with account / creative / and strategy teams to ensure that the agency is properly staffed for both the short and long-term. 

Is this the hill we want to die on?

A CFO wears many different hats. Every day is filled with choices that have an impact on  creative output, but ultimately lie on the periphery. Those choices include strategic decisions about new business, commercial terms, investment, and operations.

Because of the time demands and pace that the world moves at, figuring out how to prioritize is a necessary survival mechanism. A simple trick that I learned was to prioritize decisions into one of three categories. "Is this going to kill me?", "Is this going to make me incredibly sick?", or "Is this going to give me mild indigestion?"

The idea behind this was simple, I had to dig-in and fight against the things that would kill me, be strategic about things that would just make me sick, and probably let go of the things that would only give me indigestion. This allowed me to focus on the things that truly mattered and not get bogged down with the less important items.

Power to the people

Read any management book, and you’re bound to come across some variation of the idea that people are a companies’ biggest and most valuable asset. Success in business is a team sport. How you build a team can either set your company up for long-term success, or keep you mired in a seemingly never-ending turnover cycle.

Identifying, nurturing, and growing talent is one of the most important skills that any manager can have. Giving young talent the freedom to fail, ask questions, speak openly and freely without fear are traits of successful companies and strong leaders.

Hiring for culture and hybrid skills has brought a differentiated skill set to the teams that I’ve worked with. Having teams that can flex between roles allows me more time and freedom to focus. It also lets everyone have a bigger seat at the table and participate in conversations rather than working in a silo. It fosters a culture of growth and conversation, which ultimately empowers the next generation to be courageous business people who prioritize culture and creativity over EBITDA.

Bill Afonso is CFO of independent creative agency Johannes Leonardo. 

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