The traditional image of the Chief Financial Officer (CFO) is one of rigid cost control, budget policing, and keeping the books meticulously balanced. While essential, this focus can stifle growth.
On a recent financeSHOWCASE podcast, Kieran Eblett, CFO at the Leeds-based portfolio business Bailey Group, detailed a strategic shift every growing business should consider: adopting an investor-led mindset over a purely cost-control approach.
Here is a look at why this change is crucial for professionalizing board reporting and driving strategic growth.What the Investor-Led Shift Looks Like in Practice.
For the Bailey Group, a family-owned group that acquires, invests in, and grows businesses, the transition was prompted by an away day between Kieran and his CEO. The new strategy centered on what the CEO enjoyed (growing businesses from immature to professionalized) and what he didn’t (running a large corporate).
This re-focus resulted in three major changes for the portfolio companies:
Empowering Autonomy over Synergy
The Group made the conscious choice to “get out of the way” of its investments. Historically, the Group provided centralised services like finance, IT, HR, and compliance. Under the new model, the businesses own all those areas, giving them the autonomy and accountability to choose what services they need. This shift runs counter to the traditional pursuit of cost synergies but, for Kieran, the value gained from empowering the businesses was greater than any potential extra cost.
Objective Accountability and Clearer Lines
The relationship between the Group and its individual companies became far more objective. Because the Group no longer provides services—which previously meant they “run these bits of your business”—they are now positioned solely as a supportive investor and sounding board. This clearer separation means business reviews are more focused on performance, allowing the leadership teams to own their results.
Strategic Focus on New Opportunities
By removing themselves from the internal, day-to-day rhythm of the invested companies, Kieran and the CEO gained bandwidth. The shift enabled them to spend more time considering what new assets and opportunities to bring into the Group, moving away from being solely internally focused.
Value Mindset vs. Cost Focus: The Nuance
Kieran stressed that the investor-led mindset is not inherently “better” than cost control; rather, it is situation-based.
- When Cost Control is King: If a business is losing money, a cost-control mindset is essential. As Kieran stated, the first priority should be to stop losing money, and companies need to “earn the right” to pursue an investment mindset.2
- When the Investor Mindset Wins: This approach is appropriate when the business is well-capitalised, has cash on the balance sheet, and the board is looking to create shareholder value and grow the group.
The key takeaway for CFOs professionalising their board reporting is that the investment mindset is all about the balance of risk and reward. While an unrelenting focus on keeping costs down will stabilize a business, it will ultimately prevent it from moving anywhere
The successful modern CFO recognises that financial oversight must evolve from merely managing expenses to providing the strategic direction and “investable” data required to transition the business from immature to professionalized, ensuring they are always driving the investment
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