James Edward Johnson, Director of Supply Chain Risk Management and Analysis at Nielsen, shared his thoughts on procurement and its impact on brand value during his keynote presentation to Argyle’s CFO membership at the 2018 Financial Leadership Forum: Strategy & Innovation in the Digital Era in Chicago on May 9. In his presentation, “Make Money and Do Good: How Procurement Can Improve Margins and Brand Value,” Johnson examined the relationship between procurement and brand value and offered tips that finance professionals can leverage to use procurement to increase a company’s brand value.
CFOs are often tasked with helping their respective companies limit risk. They frequently search for ways to help their companies get the most out of the time and resources at their disposal. Plus, CFOs generally are required to create budgets and explore ways to mitigate potential financial issues before they escalate.
“There is a lot of risk out there,” Johnson noted. “We look at ways to control costs, how to reduce financial surprises and how to avoid bad things from happening.”
Although many CFOs may have deployed a risk-oriented approach in the past, today’s finance leaders may want to consider ways to help a company make a positive impact on others around the world. If CFOs prioritize sustainability, reducing poverty and finding ways to reduce or eliminate global issues, they could help a business differentiate itself from the competition. Perhaps most important, CFOs can use this approach to help a company increase brand value, drive customer retention and loyalty as well as generate revenue growth.
“Instead of always worrying about bad things all the time, we need to look at good things we can do on a continuous basis,” Johnson stated. “Because, increasingly, doing good is good business.”
There is no shortage of global issues that a CFO can emphasize. Sustainability, for example, is a top priority for many consumers. Studies indicate customers are willing to spend more on goods and services from a company that prioritizes sustainable business practices than other firms. If CFOs allocate time and resources to promote sustainability, they may be able to help their respective companies drive meaningful improvements. Additionally, these CFOs could help their firms build trust with consumers around the globe.
“A majority of consumers do want to know that what they buy is coming from sustainable sources,” Johnson indicated. “[This] is something we can be impacting in the supply chain … and in finance and beyond the supply chain.”
For companies that want to expand globally, finding ways to deliver a positive environmental and social impact is paramount. Yet some businesses struggle to understand the best ways to drive positive change.
Ultimately, a CFO can help a company realize the full value of positive environmental and social changes. The finance leader can collaborate executives and employees alike to determine the best ways for a business to make a positive environmental and social impact. With collaboration, a CFO can gain buy-in from a workforce and help a company use positive environmental and social changes to distinguish itself from the competition.
A CFO can also help identify like-minded partners who prioritize creating a positive environmental and social impact, helping the company simultaneously minimize risk and enhance its brand value worldwide.
“When you look at where the growth is happening in the world, those markets where the growth is happening have an even greater interest in partnering with companies that are committed to providing a positive environmental and social impact,” Johnson pointed out.
Fostering a culture that promotes sustainability can have lasting effects on a business, and CFOs have the ability to build this culture from the ground-up. By integrating sustainable business practices across all departments, CFOs can both engage with employees and encourage them to make a positive environmental and social impact. As a business built on sustainability, a company can generate loyalty with consumers across all demographics. Therefore, this business can do good to drive growth.
“You’re going to hit every kind of consumer when you’re committed to [positive] values,” Johnson stated.