I once came across an 11-figure CEO that said “forecasts are useless”.
Which is maybe the fastest way to get me worked up as a guy who named his business “Forecasting Performance”.
And while I 100% disagree with him, we have to understand what drove the comment… and why I actually understand (and agree) with where he’s coming from.
Let’s talk about what causes a multi-billion dollar CEO to get there and how to avoid it…
If you are an Owner, Founder, CEO, or Executive and feel like you’ve hit a plateau in your business, this is for you…
Most businesses from $2M-$50M don’t stall because they’re doing the wrong things. They stall because their finance system stopped scaling with the company.
We built a short assessment to pinpoint where clarity is breaking down - across forecasting, decision support, and executive reporting - so you can see whether finance is actually helping you move forward, or quietly holding you in place.
The cost:value ratio is off
CEOs are hawks for value.
They are also hawks for not wasting money.
And knowing this CEO, I’m aware that he both thought the forecasting process that finance went through every month was both a waste of time/money as well as not valuable.
(not a great place to be)
Think about this - the CEO’s finance team would pull together the entire business into a detailed and time-intensive process every month (draining valuable resources) only to produce a forecast that lacked explanation, credibility, and usefulness.
If I was that CEO, I’d have stronger words than him.
Know the role of a strong forecast
I often preach the value of an accurate forecast…
But to be honest, most finance teams shouldn’t be focusing on forecast accuracy to add value, they should be focused on leveraging their forecast as a tool to steer the business.
In this case, ‘good enough’ should be the aim for forecast accuracy - then the rest of finance’s energy should be in using that forecast to drive better decisions for next month.
Your forecast becomes the foundation for:
Scenario modeling recent revenue trends
Determining your cash runway after hiring a senior sales staff
Update your pricing strategy based on current competitor trends
Here’s the ultimate test… ask yourself “what decision does this forecast change?”
If the answer is consistently unclear or unknown, you might have a problem.
What great finance does different
Great finance spends 20% of their energy compiling the forecast and 80% of their energy interpreting and communicating why it matters.
Which is a wild contrast from most finance teams who are relieved when their forecast is ‘done’, then put it on a shelf and hope they don’t get questions from it.
Great finance will use their forecast to inform the biggest decisions in the business today - often speeding up critical decisions by weeks or months.
I’m convinced that if the CEO who thinks “forecasts are useless” had a finance team who actually applied the forecast to the CEO’s problems (without spending weeks bogging down his leadership team), he’d have a much different perspective.
A note for the owners/CEOs/founders
If you are an owner, CEO, or founder trying to figure out what ‘great finance’ looks like for your business, we created an assessment for you.
It highlights your primary finance opportunity and tells you how you can solve it
How we can help:
Build your own FP&A Operating System so you can drive more impact through a best-in-class FP&A process.
Looking to elevate your FP&A leadership skills? Steal our Finance Manager Playbook to help you drive a healthy, high-performing finance team culture.
Get step-by-step video instruction on designing your perfect FP&A Flywheel. It’s the exact process we use when transforming FP&A teams.
Brett Hampson, Founder of Forecasting Performance
