Why open books give you more power in the C-Suite

By Thomas Barta
Last updated: March 08, 2023

Why are CFOs so powerful? They have crucial and credible financial data every CEO wants to see. Competing with a CFO’s credibility can be hard if your own data is forward looking—or if your work’s impact is hard to  measure. Don’t try to compete—change the game. Open the books! (from my cmo.com column).

Proving your worth can be hard. Take marketing. Less than 50% of C-suite executives in an Economist Intelligence Unit study believed their marketing’s expenditures were really delivering a measurable ROI (never mind bottom-line profits). In other words: Your CEO may not trust you’re spending the money well.

Saying leaders don’t spend money well is often unfair. Marketing’s impact, for example, can be tricky to measure—especially for investments in long-term brand building. Many leaders Patrick Barwise and I interviewed for our new leadership book The 12 Powers Of A Marketing Leader said they could do a better job showing how their work drives revenue and profit. But some also shared a big fear: C-suite pushback. Forward-looking data often fails to match the precision offered by backward-looking finance data. If that’s the case, why not change the game and open the books?

One head of marketing recently received this CFO email: “Dear James, Sorry I couldn’t reach you personally. As a proportion of revenue, we spend almost twice as much on advertising than our largest competitor. That’s unacceptable. I’ve decided to cut this year’s advertising budget by 35% and next year’s by a further 10%. I’m sure you’ll understand our need to manage costs. It’s a tough year.”

James was outraged. He was tired discussing marketing funds each time the company had a bad month. So he decided to try a new approach. He met the CFO and proposed that the marketing and finance teams jointly produced the numbers on all marketing activities. Open book. No hiding. The project changed everything. The joint team found that most campaigns did, in fact, create a decent return. The few that created poor returns, including two high-profile sponsorships, were cut. Working together the team then developed metrics on how to best measure and report marketing success.

At first, opening the books was painful,” he recalled, but it made his work more relevant and influential. Some of the budget cuts were reversed. More importantly, people in the organization finally understood how marketing drove the bottom line. The open books-approach isn’t just for marketing. HR and operations executives have successfully implemented the approach too.

Abigail Coomber, head of customer at British Airways, said: “(leaders) need to show the ROI of every penny spent … and how it delivers against the bottom line.” Like many leaders, she agrees that opening your books is among the most powerful things you can do to prove returns.

Here are some basic rules for producing powerful C-suite data:

Measure What’s Big

Measuring the return on some smaller items may cost you more than it’s worth. Take a look at your overall budget. Identify the big and critical items. Focus on measuring these first.

Take An 80/20 Approach

Impact measurement isn’t about getting every penny right. Some people use sophisticated tools, considering short- and long-term effects of their work. Others do very well with a simple quarterly impact-spreadsheet. If you’re unsure, invite three agencies or experts to present how they would set up your measurement system. Get a simple one to work first—and expand it later.

Open The Books—Get Finance Involved

Work with your finance experts to jointly define and agree how you want to measure and report returns. You’ll find that most CFOs understand very well that not everything can (and should) be measured. Problem-solving this jointly will greatly increase the credibility of your numbers. Don’t hide from finance—instead, team up.

Show Your Returns Frequently

This can feel scary, but sharing your estimated returns with top management is one of your best ways to build credibility as a leader. Crucially, sharing returns includes sharing the failures.

The most successful leaders in our study didn’t try to crack impact measurement on their own. By teaming up with the CFO, top leaders leverage what I call “the power of open books.”