Interview with a CFO, Part 2: How does a CFO create value?

It's the CFO's job to "go for the gold."

In my last post, I summarized a conversation I had with a friend of mine—a chief financial officer for a physician-owned hospital—about the issues he worried about everyday. This time, I’ll share how he really creates value for his organization.

The man has incredible responsibility: keeping a hospital in the black, making sure his facility can pay its employees, its creditors and its investors. That takes more than just pencil pushing and cost cutting. As CFO, it’s also his responsibility to find more ways to make money. He’s an entrepreneur on salary.

Physician-owned hospitals like his often focus on certain specialties. But putting all their proverbial eggs in one basket is risky. “I’m always looking for ways to diversify our product mix,” said the CFO, “so if there’s a downturn in one area, the whole hospital isn’t affected at once.”

His focus is not unique to smaller hospitals. CFOs at large hospitals with a full complement of service lines might not be looking to add new ones. But they are always looking for ways to bring in more revenue. And for hospitals, making more money almost always requires a capital purchase.

Maybe they’ll consider upgrading to a 64-slice MRI, adding another hyperbaric therapy chamber or possibly installing a daVinci robot. Whatever they decide on, moving from concept to completion will take months, oftentimes years. My friend told me that the research, planning, approvals, program design and process design for adding a new service line takes anywhere from 18-24 months from concept to completion.

The next time you approach a CFO, ask yourself, “How can I help his organization find new revenue streams?”

Next post: The CFO and the marketing department.

Tagged as: CFO, Chief financial officer, Health care, Health care B2B, Interview, Marketing strategy, Sales