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Has your company missed a quarterly sales forecast lately? If so, you’re in plentiful company. According to a new report from AI-powered revenue and sales performance management platform Xactly, four in five leaders missed a forecast in the last year. More than half missed two or more times. And 98% of sales and finance leaders said their teams came prepared to make the forecasts.
What’s the problem? A lack of quality collaboration between sales and finance teams, according to 97% of respondents. Some of this is an issue of data: Two-thirds said reporting systems are unable to access historical CRM or performance data, while six in 10 aren’t even sure where the pipeline data is coming from. Some of this is dealing with the historical structure of finance departments: 35% say that traditional processes take too long and are not collaborative, three in 10 struggle with internal roadblocks, and almost a quarter complain that everything is too siloed.
Overall, 98% of respondents said they struggle when trying to put together a forecast. Close to the same amount agree on three things that could make it easier: better post-mortem sales forecast analysis, more understanding of historical data, and increased automation of data.
New tech platforms can help with those aspects, but a platform on its own can’t bring different departments closer together. The report encourages creating a more team-like environment, where members of different departments work to bring their experiences and knowledge together, and cross-functional team members are held accountable. Training should be prioritized both for the broader team and individuals. And career growth for individual employees should be prioritized. With a tighter team and better understanding of and access to data, the road to quarterly sales forecasts could be at least less daunting.
Accurate forecasting isn’t the only challenge today’s financial leaders face. Throughout his career, Jaggaer CFO Jeff Laborde has worked through many issues, and says that right now has many often-background financial issues like high interest rates and new tax laws in the forefront. I talked to him about the difficulties today’s CFOs face and how to work through them and be a better leader. An excerpt from our conversation is later in this newsletter.
ECONOMIC INDICATORS
Federal Reserve Chairman Jerome Powell is interviewed by David Rubenstein for The Economic Club in Washington, D.C.
Nathan Howard/Getty Images
Some good news on the inflation front: June’s rate was 3%, the lowest it’s been in a year. Economists had forecast last month would show 3.3% inflation, so the unexpected lower rate was a welcome surprise. Core inflation, excluding more volatile food and energy prices, was a bit higher at 3.3%.
And now the question on everyone’s mind: When will that translate to lower interest rates? Well over nine in 10 are expecting the Federal Reserve’s Open Markets Committee to cut rates at its September meeting, according to the CME FedWatch tool. The odds of a September rate cut had been increasing in the last week and a half, reaching 76% after Labor Department figures showed a 4.1% unemployment rate early this month. Lower inflation and a weaker job market, experts say, are more likely to show the Fed that rate cuts will provide an overall economic benefit.
STOCK MARKET NEWS
Traders on the floor of the New York Stock Exchange last week.
Spencer Platt/Getty Images
In the last week, the stock market has had a mostly upward climb with some topsy-turvy movements from expectations for rate cuts, enthusiasm for AI possibilities and the assassination attempt on former President Donald Trump. Last week, the Nasdaq, S&P 500 and Dow Jones Industrial Average all hit record highs. And the Nasdaq and S&P 500 also saw their worst day in three months. On Monday, the first day of trading after Trump was shot at a Pennsylvania campaign rally—and Tesla CEO Elon Musk gave the former president and Republican nominee his endorsement—stocks on all indices nudged upwards, with Tesla hitting an all-time high. Truth Social parent company Trump Media saw its share price surge more than 30% Monday, as investors may be speculating Trump now has a greater chance of winning November’s election—a move that could result in fewer regulations on companies.
But the stock market bump isn’t all Trump-driven. Apple hit an all-time high on Monday, with its stock worth $237.23 a share and increasing its market capitalization to a record $3.59 trillion. The jump was driven by 33% year-over-year growth in India sales, first reported by Bloomberg, as well as bullish notes from analysts at Loop Capital and Morgan Stanley, as the company prepares to launch a new phone and generative AI-enabled operating system upgrade this fall. (Apple CEO Tim Cook has stayed out of presidential politics so far, though he issued a statement on X over the weekend praying for Trump’s recovery and condemning the violence.)
HUMAN CAPITAL
Intuit’s headquarters in Mountain View, California.
Smith Collection/Gado/Getty Images
Last week, Intuit laid off 10% of its workforce, translating to about 1,800 people. In a note sent to the company’s employees and then posted on the corporate blog, CEO Sasan Goodarzi said this both includes regular employees—more than 1,000 “who are not meeting expectations,” as well as more than 300 roles being eliminated to streamline work and reallocate resources—as well as 10% of executives. Goodarzi wrote Intuit is using this opportunity to invest in its new priorities—including improving connection with experts, improving its fintech platform, working to gain more mid-market customers and grow internationally. Goodarzi writes he eventually expects to hire about 1,800 people to support these new priorities, and Intuit’s overall headcount will increase in FY 2025 and beyond.
OFF THE LEDGER
Jaggaer CFO Jeff Laborde On Navigating Today’s Challenges
Jaggaer CFO Jeff Laborde.
Copyright 2020 Teryl Jackson Photography, Getty
With so many changes and uncertainties when it comes to business and the world economy, as well as new technologies like generative AI that could change the business and operational landscape for companies, it’s a difficult time to be a CFO. I talked to Jeff Laborde, chief financial officer at procurement tech platform Jaggaer, about what he sees as the largest challenges and opportunities for success. Laborde has extensive CFO experience—he’s held this position at six different companies since 2012, and started his career in investment banking. This conversation has been edited for length, continuity and clarity.
What are the biggest challenges that CFOs today are facing?
Laborde: Where to begin? I think when you look at just the traditional definition of the job, with finance being front and center, even some of the most basic and traditional aspects of managing a company from the finance seat has changed [and] has become very challenging. With the change in interest rates, capital structure pressures that weren’t there two years ago, three years ago, much less five years ago, have emerged in the sense of additional cash being consumed by higher interest rates. That goes hand-in-hand with all the corporate tax gyrations we’ve had—particularly for a tech company where interest expense, which is now going up, has lower limits in terms of what can be deducted, and we as a software business now can’t directly expense our software development headcount costs. We actually have to capitalize those and amortize those over between five and 15 years.
You put those two together with other inflationary dynamics—and for global businesses, foreign currency volatility—and it’s really thrust some of the basics of working capital, cash management liquidity back into the front for businesses like mine, where that was a little bit of an afterthought. As a result of that, I think it’s put a lot more scrutiny, pressure, attention, focus across the executive team, down into the business, and up to the board around new investments. If there’s less cash to go around, working capital’s a little tighter, there’s less money to invest, unfortunately, even though we have no shortage of really good ideas.
If one of the expectations of a CFO today is to drive the outcome of the business and decisions, how do they get in a position to do that, especially with all of these more base-level competing priorities?
A lot of it depends upon the fundamentals of how the organization is structured. And I find, having been a serial CFO, is the alignment stepping into a business with the CEO and the board is critical. I think increasingly [the uncertainty of today,] the speed with which business environment data and information [and] AI are forcing change onto companies.
I think more and more boards are expecting their CFOs to help foundationally drive outcomes and not be a scorekeeper, or resource allocator, or owner of the purse strings. They’re expecting you to be much more engaged and involved. Very practically speaking, when mentoring and talking with new CFOs, it’s a little harder in some ways in today’s digital world than it used to be pre-Covid when we were in person. I would literally do the old ‘managing by walking around.’ I would show up in operational meetings, new product development, roadmap discussions, customer escalations, meetings on support, professional services, staffing discussions. I have great familiarity with all of them, because all of those roads lead through finance. But I would shock people by walking into meetings and have them looking at me like, ‘What are you doing here? Why are you in the business?’
As long as you have alignment with the CEO and the board, it’s okay for people to be shocked, because the expectation will then filter out into the business. But you can’t do it by sitting behind the four walls of the finance or accounting department. You’ve really got to figure out how to get out into the business. One of the most effective ways I’ve found in doing that is being able to bring to bear a whole host of those experiences where you’re listening, you’re not jumping in prematurely, you’re absorbing, you’re onboarding, you’re understanding the lay of the land, and then you start to figure out how to connect the dots. In today’s world, functions are very siloed. So when I would go into that product roadmap development discussion, they wouldn’t have anybody from customer support in that meeting. Because I have sat in other meetings, because I am tracking the numbers and the metrics, I have the ability to connect dots in those discussions in a way that people are really curious.
The nature of business and the CFO’s role has changed since the last time we dealt with high interest rates, big geopolitical issues, corporate tax changes and new technology. How does a CFO today deal with all of this?
I think the biggest toll is focus. It’s really my teams and how you prioritize. There is no shortage of new ideas in terms of new business, investing in growth areas and opportunities. In an equal and opposite direction, there’s no shortage of new risks for the business, whether they’re competitive threats, whether they’re regulatory, macroeconomic issues.
It really is setting a clear set of goals and focus areas, and have those be time-bound, and something that you’re constantly referring to when you get together. I do weekly direct report meetings, both one-on-ones with all my direct reports and as a team, to try to ensure due to remote aspects that we are forcing alignment.
Our CEO at the top starts with our goals and objectives. Each year we have one defining theme, and then we have a series of objectives underlying that primary theme. Then we break that down into functional, effective to-do lists. I as the CFO play a very active role in helping not just set them, but manage, and try with the CEO to hold people accountable to them. It’s focus and prioritization and constantly testing those: We need to do X? Well, I’m sorry. We can’t. Does that mean we may have to sacrifice a customer or prospect or two? Then that’s the tough decision we have to make.
FACTS + COMMENTS
The IRS paid more claims to whistleblowers in 2023 than previous years, according to the IRS Whistleblowers Office’s annual report to Congress.
$88.8 million: Total amount paid in 2023. These reports led to $338 million in tax collection
1,234: Number of claims paid in full in 2023, the highest since the IRS Whistleblower Program started
‘It bolsters the fair and effective enforcement of our nation’s tax laws’: Whistleblower Office Director John W. Hinman in the report’s introduction about why the program is important
STRATEGIES + ADVICE
New technology can do a lot for your company’s operations, but it can also have a profound impact on customer relationships. Here are four ways that it can help you strengthen them.
Are you hoping to move up the corporate ladder? Bulking up your data and analytics skills can really help.
VIDEO
QUIZ
We’re in the midst of Amazon Prime Day, the online mega-retailer’s annual sales bonanza, which lasts through tomorrow. Adobe is projecting record-breaking sales for Amazon, amounting to how much in online spending?
A. $7 billion
B. $14 billion
C. $50 billion
D. $987 million
See if you got the answer right here.