What To Do When Your Client Blames You for Poor Results
NOTE: This article is about natural business frustration and managing professional relationships. It is not about dealing with clients who are immature, unprofessional and/or borderline abusive as that is outside the scope of our expertise. If you are in such a situation, please seek outside professional counsel.
Many CFOs – fractional or otherwise – are the primary confidant to CEOs and business owners. This is especially true in small companies where there isn’t a full-fledged management team. There are very few people in the company that understand or can appreciate the financial aspects of what is going on in the company. Additionally, financial information (along with HR data) is typically the most closely held of any information inside a company.
There are many benefits to holding such a seat at the table.
You offer a lens for analysis that other team members can’t.
You can influence the direction of decisions so that they are best for short-term and long-term goals.
You participate in key discussions about company investments and business pursuits.
And also…you are (generally) the reporter of results. In some cases, that is synonymous with being the bearer of bad news.
In fairness, most business owners and CEOs are professionally mature enough to not outright blame you (or anyone in particular) for the company’s results or lack thereof. What can come through in your conversations are any number of frustrations which sound like:
“Why aren’t sales higher? We’ve been SO BUSY – are you sure that your reports are correct?”
“When are expenses going to come down? You did the budget – you should know.”
“I just don’t understand why our payroll/taxes/insurance keep going up. Are you double checking/auditing all the payroll company’s work?”
Even if these seem a little absurd, we’ve heard them all and more than once. How do you even begin to respond (reasonably)?
While you’ll likely know your client better than we do, but here is what we’ve found to work with most of our clients over the years.
Don’t start the blame game or being defensive. That’s not going to move the conversation forward – no matter how valid a comeback might be.
Hold the space. Their concerns have some level of validity – it’s up to you to keep the calm so you can get to the next steps.
Focus on the facts – and not on gut feelings, anecdotal details or general observations. It might have “felt busy” but that could also mean that the systems are failing, and people don’t know what to do efficiently.
Quantify the issue. How much are we really talking about? Was it just one month? Don’t let them catastrophize when it is unwarranted. That is the possible early death of any creative problem-solving as well.
Don’t take on other people’s work. Just because you are the expert doesn’t mean that you own the financial results. You report and analyze them – and can help design improvements. But, the company and the people responsible for sales and operations own the results. This also applies to other outsourced experts or providers such as payroll processors.
As the potentially only other person to get the full view of key financial business issues, your job as the CFO is to be THE financial expert in the room which is not just being the sounding board for the CEO but also being the one who helps guide them and the company to a better solution. “Bad” results are an opportunity to see what needs to be addressed or fixed so that the company can continue to grow and improve.
That might be…
a better set of metrics to more quickly see if things are running off course before the month is over
more departmental level ownership of certain expenses
Whatever solution you come up with, it’s important that there is agreement about who owns what and how to minimize what caused the CEO/business owner to be surprised or frustrated by the results in the first place. Replacing reactive panic and scrambling with proactive focus and plans is critical to addressing the underlying issues in the long-term.
Like this article? Get the behind-the-scenes details and more thoughts on how to address this situation by subscribing to the Behind The Scenes private podcast here.
