This week, I was on a panel for a TalentEdge CFO Leadership Event here in London and the topic was, "From CFO to CVO: Creating Value With Data, Technology & Talent".  On the panel was also a Data specialist, Liz Henderson or also known as the "Data Queen" who was very interesting on this topic.

If you haven't heard of a "CVO" before, it stands for Chief Value Officer.  It's used more in the States than here in the UK, but it ultimately demonstrates the transition of a CFO being more back-office and a support function to really adding value to the business and being at the forefront of the Commercial decisions and Strategy.

If you have been reading my weekly musings for a while, this concept shouldn't be a new one to you, as I do tend to bang on a bit about "adding value"!  However, a big part of this concept is data.  CFO's in general will often use data to provide insights and help with the strategic and commercial direction of the business.  So, the company's Data Strategy should be pretty important due to it's value and everyone around the business will know what the Data Strategy is, right?  Right? 

Mmmm.

A Data Strategy has become an a more important component for any start-up and scale-up (and business, really). As a Finance Director or CFO, ensuring your data strategy aligns with your business goals can provide the foundation needed for growth and innovation. 

Establishing One Version of the Truth: The starting point.

One of the first steps in building an effective Data Strategy is establishing "one version of the truth." This concept ensures that all data across the organisation is consistent and accurate. 

In the early stages of a start-up, it's common to rely on Google Sheets for data management. While this may work initially, it often leads to data inconsistencies, errors, and inefficiencies as the business scales.

Moving Away from Google Sheets

As your start-up grows, transitioning to more sophisticated data management software is crucial. This software not only centralises data but also ensures it is accurate and up-to-date. Here are a few steps to facilitate this transition:

1. Identify Key Data Needs:

   • Determine what data is essential for your business operations and decision-making.
   • Assess how this data is currently being captured, stored, and used.

2. Choose the Right Data Management Software:

   • Look for software that suits your specific needs, such as CRM systems, ERP solutions, or specialised finance tools.
   • Ensure the software is scalable to accommodate future growth.

3. Implement Data Governance:

   • Establish clear policies and procedures for data entry, maintenance, and access.
   • Train your team on the importance of data integrity and how to use the new software effectively.

Integrating Data Strategy into Business Strategy

For a start-up, data strategy should not exist in isolation. It must be a core part of the overall business strategy. Here’s why and how to achieve this integration:

1. Informed Decision-Making:

   • With accurate and consistent data, you can make more informed decisions that drive business growth.
   • Use data analytics and AI to gain insights and forecast trends.

2. Aligning Goals:

   • Ensure that your data strategy aligns with your business objectives. For example, if your goal is to improve customer retention, focus on capturing and analysing customer feedback and behaviour.

3. Which C-Suite?  CVO Role (Chief Value Officer):

   • Generally, a CFO / CTO or CCO will oversee the integration of data strategy into the business strategy.  Who has the interest or passion for it is the best person.
   • This c-suite ensures that data-driven insights are effectively translated into business actions.

The Role of Data Analytics and AI

Incorporating data analytics and AI into your data strategy can significantly enhance your start-up's capabilities. These technologies can automate processes, provide deeper insights, and enable predictive analytics.

1. Automating Processes:

   • Use AI to automate routine tasks such as financial reporting, forecasting, and data entry.
   • This reduces the risk of human error and frees up time for more strategic activities.

2. Gaining Insights:

   • Data analytics tools can help you understand customer behaviour, market trends, and operational efficiencies.
   • These insights can inform product development, marketing strategies, and other critical business decisions.

3. Predictive Analytics:

   • Predictive analytics uses historical data to forecast future trends.
   • This can help you anticipate market changes, manage risks, and identify new opportunities.

A robust data strategy is crucial for start-ups looking to scale and succeed in today's data-driven world. By establishing one version of the truth, transitioning from Google Sheets to advanced data management software, and integrating data strategy into your business strategy, you can ensure your start-up is well-positioned for growth.

Want to improve and speed up your finance career? See the steps in our Framework below:

1. Sign up to our next workshop.
2. Work with me in the Financial Leadership Foundations course  that includes monthly Q&A sessions where we can discuss all of your questions and how to apply your learnings to your current role. 
3. Download the Upgrade your Management accounts course to showcase your skills as a finance leader to the Founder, leadership team and the Board.