Let’s start out in the shoes of a CFO. What is it that they really feel like they're responsible for? And if someone looks at them and says, hey you're great, what are you great at? The first is developing a clear financial plan, of course. But beyond that plan, it's the meeting of those financial commitments and targets. I think one of the things that is often overlooked in working with the CFO, and why they may ask a lot of questions, is at the end of the day, they feel responsible for targets they put out. So if you say the company is going to generate $100 million, and it generates $80 million, you feel like you're failing as a CFO. Similarly, it generates $120 million, you feel like you're failing as a CFO. So really developing that clear financial plan, and then meeting those targets is incredibly important. How we tend to do our job is working cross functionally.
And this again is sometimes an overlooked trait of a CFO, which is, they need to work really well cross functionally, and build trust with their peers, and then the broader organization, because at the end of the day, you're trying to tease out where you think risk is, how effective people are, developing plans and hitting their targets. And the best way to do that is to have good strong working relationships. It doesn't always mean that the person is trying to be nice, as much as productive, with those cross functional peers. And then finally, building trust with shareholders. If shareholders do not trust the CFO, it's very hard for the CFO to be effective.
Their role is to be seen as the practical person in the room who says X and X happens. So you can see how all of these things ladder together. And now, if you're thinking back to some conversations you've had with CFOs or with finance leaders, you're probably going oh, I can see now why maybe those questions were coming at me in that way, because you will find that finance leaders tend to ask a lot of questions. Because that, again, helps them do their job successfully.
I thought through five things that when I think about the most successful working relationships that I've had in my career with cross functional partners, it gets back to these five things. And we're going to unpack each of them.
The first, data rules. I mean, CFOs use data for everything. Understanding how the work that you're doing in your chair relates to the financials. Really thinking through planning and the importance of planning. Understanding risks, so what's the downside. What happens when things don't work, you hope they work, and then being really accountable and owning the results. And we'll spend a little bit of time on each of these, to talk through them in more detail. Starting with data rules.
So the first is context. It's important. But context without the data, the ask, will fall flat and come with more questions. So if you think about whenever you're going to ask for something, or you're building a plan, or you think there's an opportunity for your team to do more, just knowing it intuitively is not going to be sufficient. Finding a way to ground that ask in data will allow a CFO or finance leader to meet you on the ask and work through that together.
There was a point in time when Microsoft was really struggling with how to think about adding headcount. And the sales leader at the time knew that there were operational inefficiencies and knew that the team needed more, but was unsure how to quantify it. And so we actually spent time going deep with the sales leaders, with account management, with some of the operational functions, to come up with a rubric or a framework for how you add headcount based on revenue growth. And then it just became a very frank conversation around, how much growth do we want to have next year? Oh, we want to add 20% growth? Okay. That's what this means for the sales account management and sales operations functions that actually have a variable component of, when you add more revenue, you have to add more humans. And it took all of the friction out of the conversation. So I think just always coming back to how to use data can be a really powerful, powerful thing with your finance leaders.
Reaching out early to a finance partner and saying, hey, help me work through this because I want to do right by the company, I want to make sure when we're adding resources, I know how it's going to contribute to the bottom line, and it's hard for functions that are less clear. When it comes to people costs, as an example, the people function or even the finance function for that matter, it is a little bit more of a walk. It could be about saving money, it could be about making people more efficient and effective. But going back to using the data and trying to connect it to the financial plan.
The next one is planning is everything. Plans change. Anyone who tells you the plan they write down is going to be where they end the year, it's actually not true. The one truth about a plan is it is going to change. But the forcing function of planning is thinking through the details, thinking through the scenarios, thinking through the risks, being prepared for when things don't go the way you exactly write them down in your plan, what you're going to do next. It also is incredibly important when you're thinking out into the future.
The company I'm going through now is a great example. We're building out a new segment of the business that requires short term investment in order to have long term returns. And this is typical of Series C, Series D companies, where they've proven product market fit and now they have to continue to scale and test, continue to test and build things. But it often requires an investment. And some subset of those investments won't work. That's anticipated. But the process of the plan, of sitting down and going through.
This is an exercise we're doing right now, which is alright, how many customers do we need to have? What are the assumptions about the size of the customer? What percentage do we think we'll be able to pull through the pipeline? How are we going to operationalize it once we have them as customers, and getting their folks into therapy. What will that look like? How do we make sure that we're able to deliver on the promise.? As you hear this, you go wait, that's a lot about business planning. Absolutely. The financials are just a manifestation of the best financial plans or best business plans. And the best financial plans are closely tied. So you see that the most productive way of working is that back and forth of like, hey, let's go deep on what the business plan is, or the annual budget, and plan and make sure that things are tied across the plan....
The next thing is understanding the risks, because I think at times there are places where folks say, hey, but then you're the person who's the rain cloud in the room. You don't have to be a rain cloud to understand the risks. If you start from the place that perfect execution is rare, then you have to understand the range of outcomes. It's important, as a leader, as it is as an individual contributor.
I was actually talking to a public company investor, and I asked them, who were some of their folks that they think were exceptional about managing Wall Street's expectations. And I won't share the name, but I'll share the story. The feedback that I received, or the story that I was told was, there's this one person who was the CEO of a huge company, and basically every quarter, he and his CFO would basically say, you need to understand, we built in risk to this plan, we acknowledge that there is no such thing as perfect execution. And so we were managing for that. And he and his CFO literally would every quarter, every year, look at what was going on, look at the risks as they understood them, and as had been shared with them by their leaders within the organization, and then make some judgment calls. Again, this comes back to building trust with shareholders, right? To be able to acknowledge that risk. And it also comes back to meeting expectations. And it starts with cross functional leaders having a deep understanding and appreciation for the risks.
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