Your peers aren’t ahead of you on AI…they’re just louder about it.
89 finance leaders told Pulley what’s actually happening; where it’s paying off, where it’s stalling, and why the gap between deployment and transformation is wider than anyone’s willing to admit.
I've shared a lot of growth horror stories in this series. But very few of these businesses were truly doomed from the start.
There was almost always something real there:
WeWork: Coworking spaces have endured (I'm writing this from one right now).
Blue Apron: The economics of meal kits, sold to time-poor people who like cooking, are genuinely good. They just optimized the wrong unit, as we saw earlier in this series.
Lime: Shared electric scooters solve last-mile city transport (and again… I’m a big fan). Plus the ride economics on paper look fine. But when you let them out of the test market and into the real world, they get vandalized, dumped in rivers, and ridden into the ground.
Allbirds*: OK… well, maybe not them. Those are some ugly-ass shoes. Although they are comfortable, and I'm at an age where that matters more.
* Note from editor Drew: My wife calls Allbirds ‘birth control shoes’
Cheaper than a vasectomy
It's easy to pick holes in these business models, especially in retrospect. But that's not the interesting learning for CFOs. The more interesting question is why those poor decisions got made at all.
Where was the finance team?
Where was the CFO?
Welcome to the final part of this four-part series: The Growth CFO
In week one, we cleared up exactly what role a CFO should be playing in business growth.
In week two, we defined what growth actually means and how it comes in ten flavors.
Last week, we broke down the math of growth: Thinking at the margin, and how to make those crucial calls on when to step in new sticky costs to support it.
This week, we return to where we started, the CFO's role in growth. But now, we focus on how to build the team and finance function that unlocks growth.
Stepping back…
One of the biggest challenges for a CFO in a growing business is to avoid becoming the bottleneck themselves.
Whatever mercurial brilliance they may (or may not) have for the snap commercial decisions… left unchecked, it becomes a bottleneck. And the more successful the growth, the worse the jam.
As we said in week one, setting guardrails for growth is a big part of the job. Waving the green flag on when, where, and how it's OK to grow. But as you add products, channels, geographies, and the rest (which you will, if your growth is working), those decisions get more and more multi-dimensional. Impossible for one person to make well, however good you are.
By that stage, the job changes. It's no longer about being the guardrail. It's about building the global system that sets the local guardrails. A function and a team empowered to help the business grow without you in the room for every call.
Growing pains
So, back to those poster children of growth gone wrong. What actually failed?
Well, I'd bet there were robust unit economics very early on - that’s where the capital would have come form. As is so often the case with these stories, what works on a small test case gets extrapolated to a whole population (backed by hundreds of millions in firepower) only to find the assumption didn't hold once it made contact with the real TAM.
So, the real question is why finance never scaled beyond a few individuals into a system that could spot those warning signs early, and help the business pivot and replan before the money ran out.
When growth outruns you, there are two easy failure modes:
You don't let go of anything, become the bottleneck, and end up making poorly informed snap calls anyway, however finely tuned your judgment. Or…
You sign it all away and let people run without any control at all, and assume it will be ok (it won’t)
The hard road is the third one: building an empowered team to make local decisions inside a disciplined framework they can be trusted with. That's real work. Easy to fake around a few early employees who feel the economics in their gut. Much harder to build, so it holds with hundreds of people, none of whom were there at the start.
A growth finance function
I could talk a lot here about the kind of top-down culture and tone you need to set to build a function fit for growth. But I've covered that elsewhere, in different forms, and I'm not sure that's really where it goes wrong.
Those top-down roots show up in something much more concrete: doing the right things, at the right time, function by function. The culture isn't separate from the build. It is the build.
So instead, I'm going to focus on the key practical enablers, the things to get right to set your finance function up to support growth at scale. We'll go one by one, across:
Accounting
Reporting
FP&A
Funding
Strategic finance
Accounting: The unsexy foundations
What's the job: Eliminate manual work everywhere else by getting things right at the source. Weak accounting creates compounding downstream work as you scale.
Growth-specific focus areas
Frictionless cash collection: A smart CFO told me early in my career that rule number one of finance was to "not interfere when people are trying to give you money." But that kind of frictionless cash movement takes real design: accurate, fast billing, simple payment integrations, clean dispute resolution, and robust credit control.
A thoughtful chart of accounts: Nothing in finance creates more spreadsheeting than a shitty chart of accounts (COA). I wrote about this at length last year. The essence: build profit definitions that suit how you make decisions, not what's convenient for your financial controller and tax advisors. And make sure you can tag transactions to the dimensions you actually manage.
Scalable procure to pay (P2P): As you grow, you spend more and create far more purchasing transactions. Left unmanaged, that becomes the bottleneck. The instinct is to peg decision rights to commitment size. But a $200k COGS invoice might be routine; a $10k software subscription nobody approved is the one that should stop. Build a P2P process that makes it easy to spend good money and hard to spend bad money.
Signs of accounting bottlenecks to growth
Almost any time you see finance people handcranking data into different formats in spreadsheets, it's a failure of your COA and data capture somewhere underneath.
A slow close. If you can’t close your books quickly, it’s because your core processes need work, and those core processes will choke you growing at some point.
A volatile 13-week cashflow forecast. Yes, it’s a funding problem (more on that in a mo), but it’s also a symptom of poor transactional accounting.
Every cost is going "up" for approval. If everything has to escalate, your P2P cycle isn't making the easy spends easy.
Reporting: Is the mirror broken?
What's the job: A growing business throws off a lot of noise. The job of reporting on growth is to tell you which numbers moved because the fundamentals changed, and which just moved because you did more.
Growth-specific focus areas
Disciplined monthly management accounts: I frequently hear this isn't necessary in a growth business, that you need something more fluid instead (you do, more on that in a moment). But you also need a static lens to view the fluid through. Without a fixed cadence, everything moves at once, and you can't tell a trend from noise.
Report at the margins, not just the average: This is last week's whole post made into a monthly habit. An income statement shows you the average; it tells you nothing about what's happening at the edges. And the quality of your growth at those edges is a leading indicator of your future P&L. Cohort analysis is one tool here, but even the word is wrong… "analysis" implies it's ad hoc. You need cohort reporting: another fixed lens so you can see the wood from the trees.
Carve up variances: A growth P&L might look ‘adverse’ simply because you grew faster and spent more to do it, which might be good or bad. Equally, a favorable variance might actually be bad news, the result of delayed execution. Making sure your variance analysis can get to that level of sophistication (much easier if your accounting is right) is the key to knowing whether a red number is actually a problem or not.
Tell simple stories: There's a lot going on in any P&L, but normally only two or three things that really matter. Use your bridges to draw them out. "Revenue up 20%" is useless. "Revenue up 20%, because we discounted 20% to drive 40% volume growth, eroding margin by 1,000 basis points on our latest cohort" is much more important.
Signs reporting is the growth bottleneck
You discuss headline variances more than the drivers underneath them, and more than the actions to take.
Board and exec meetings get spent disagreeing about what's even happening in the business. Lots of top-down theorizing, no real decisions.
Your reporting cadence is irregular.
Your reporting pack never moves beyond headline P&L and cashflow variance. Or it talks in finance language, not the language the business speaks
FP&A: Clearing the windshield
What's the job: If reporting tells you where you've been, FP&A is about where you're going, and whether the plan you set still holds. The hard part is cadence: Forecast too rarely and you're steering off stale numbers; too often and you never know where the base is.
Growth-specific focus areas
A static annual budget: It's a common trope that annual budgeting has no place in a fast-growing business. I disagree. A budget isn't a prediction you're betting the company on; it's the fixed reference line that makes a variance mean something. An annual budget alone isn't enough, but every business needs an anchor. And a static comparison point matters more, not less, when the actuals are fluid.
Flexible forecasting cycle: You likely won't have the bandwidth to run monthly or real-time reforecasts (and even if you do, I'd question whether it's the right thing, but that's a debate for another day.) What matters is how you reforecast, the depth and the frequency, flexes to match your situation rather than running on a rigid schedule.
Sizing (and timing) the funding requirement: Sizing (and timing) the funding requirement. When you're growing, you might hit a funding need sooner or later than planned, because you're growing faster (or slower) than expected. Forecasting cash and runway accurately is what gives you the warning in time to do something about it.
Commercial finance: As you add dimensions to your growth, more products, channels, and geographies, keeping your total unit economics intact gets harder. That means decomposing those unit economics into dimension level targets. And then crucially building the controls to manage against those targets at the atomic level.
Signs FP&A is the growth bottleneck
You're reforecasting constantly, but no one ever really talks about the output outside of finance.
Or the opposite: the budget was set once, and is now so stale that everyone ignores it.
You're unclear which channels or customers are driving the most attractive growth.
A funding need shows up as a surprise, and cash gets tight before anyone see it coming.
There is so much more I could say on scaling FP&A with growth… so much that that is going to be the topic of next month’s playbook, so I will save the rest until then!
Funding: Filling the rocket
What's the job: Making sure the money you have goes as far as possible, and the money you don't have yet is available when you need it.
Growth-specific focus areas
Cash economics: In growth, you'll constantly face P&L-versus-cash trade-offs. An extra five points of growth, but you need more inventory to service it, or you have to offer extended terms to win it. The job is to make sure growth discussions evaluate the full cash picture, not just the P&L, so the business has a proper way of making the decisions that touch cash. Plenty of profitable growth has sunk a company that couldn't fund it.
Best-in-class working capital: This goes back to the Costco example from last month. If you can bake working capital into your growth, through a negative-working-capital model where you're paid before you pay, you absolutely should, because it makes the capital you have go further. And even where your industry won't allow that, being as tight as you possibly can on working capital stretches the same capital further. It's a genuine competitive advantage, not just good housekeeping.
Build a black book: Be the CFO who already knows where to go for money before it's needed. Speed of raise is a function of the relationships you built when you weren't asking for anything, so keep your bankers and investors warm between rounds. Perpetual fundraising is a killer: if you're always raising, you're never operating, and you're always negotiating from the back foot.
Signs funding is the growth bottleneck
You're delaying growth initiatives because the money isn't there when you need it.
Suppliers aren't being paid on time, and it's causing noise in the business.
It takes you too long to raise money.
Strategic finance: The X-Factor
What's the job: Everything up to here has been about building a system that can multiply your efforts. This is the part that doesn't, and isn't meant to. You systemize the other four as much as possible, precisely so your judgment is free to make the calls that can't be systemized, the rare, high-stakes ones that live or die on your judgment.
Growth-specific focus areas
You are the leading indicator: A system produces signals, but it can't slam the brakes. When the economics start breaking, someone needs the spine to call a moratorium, or make the surprising intervention. That's you. That can’t really be delegated; it needs an individual with conviction, gravitas and a mandate.
Disciplined capital allocation: You'll always have more growth bets than capital to fund them. The job is choosing which ones clear the bar and which don't. Then concentrating the money behind real conviction instead of spreading it thin across everything. Depending on your business, the next dollar could be a choice between CapEx, R&D, or customer acquisition. Or a decision between choices within those buckets. Each buying a completely different shape of growth. The big capital calls need full business context and can not be delegated or decentralized.
M&A discipline: The ultimate growth lever, and the easiest way to destroy value. Spot the real opportunity, but kill the ego deals that look exciting and aren't. Knowing when not to do a deal is worth more than knowing when to, and the biggest cost is usually the distraction, not the price.
Signs that strategic finance is the growth bottleneck
You're placing broad, hedged bets rather than focusing on the things that work.
You're burning time and focus on M&A, on poor or unlikely deals.
You caught the business underperforming too late.
Net net
For the last four weeks, we've talked about growth. But strip it all back, and the CFO's job in growth comes down to one thing: building a business that can make good decisions at the margin, a thousand times a day.
Initially, that means knowing the economics cold and helping the business make great calls. But you'll outgrow that, and soon it'll mean building a finance function that can replicate that, so you don't have to be in every room.
It's also the answer to the question we opened with. Where was the CFO at the businesses that grew themselves into the ground? The economics likely broke quietly, as new dimensions and complexity were added in pursuit of growth. And the finance team wasn't strong enough either to spot it or to put the brakes on. Or possibly both.
Next month, we will go deeper into FP&A and talk about how to scale an FP&A function through different growth stages.
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Disclaimer: I am not your accountant, tax advisor, lawyer, CFO, director, or friend. Well, maybe I’m your friend, but I am not any of those other things. Everything I publish represents my opinions only, not advice. Running the finances for a company is serious business, and you should take the proper advice you need.
