Grainger’s CFO On Why Finance Needs To Be Focused On The Customer
“Giving the customer what they want” has long been a hallmark of the sales and marketing functions of any business. But today, with a greater focus on (and expectation) of superior customer service at every level, the finance function needs to be squarely focused on the customer as well. This was a theme I discussed with Deidra Merriwether, CFO of the Fortune 500 industrial supply company Grainger. Deidra’s background in sales gives her unique insight into embedding a customer focus into every area of business planning. CFOs and finance professionals cannot be the people who just say “no” to important initiatives based on cost concerns, she says. They need to understand the importance of and help shape and drive a customer-focused strategy – or else they will be sacrificing long-term growth and financial value.
Jeff Thomson: Before becoming CFO at Grainger you worked in the sales function. How has the intense customer focus required of sales helped inform your approach as CFO?
Deidra Merriwether: In 2019, Grainger launched an inspirational company purpose – We Keep the World Working – that is more important today than ever before. We play a fundamental role in bringing the U.S. economy back online by helping our customers keep their operations running and their people safe. Given how integrated we are in customers’ operations, Grainger sometimes has been the only supplier allowed on-site during the pandemic to support customers.
We fulfill our purpose when the entire organization has a relentless focus on the customer. I led Grainger’s North American Sales and Service business before becoming CFO. Leading sales gives you a great appreciation of the customer. I spent a considerable amount of time with our customers – understanding their challenges, building relationships and discussing the opportunities we have to drive customer value.
To bring these opportunities to life, the entire organization needs to have a solid understanding of the customer to create and deliver the right solutions. To ensure the finance organization is delivering on this promise, my finance leadership team stays close to the customer through in-person and virtual sales ride-alongs and brings back the insights to the broader finance team. Why? This puts us at the intersection of understanding customer needs and financial implications, which helps the company make better, more customer-focused decisions.
Like most finance teams, it’s easy to get buried in daily tasks and lose sight of the customer. Knowing the customer better than anyone else is a business imperative and is important to me. I know that when we start with the customer, embrace curiosity, and work as one team, it leads to better outcomes.
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Thomson: As businesses in general become more hyper-focused on customer service and experience to remain competitive, how should CFOs think about customer-focused investments and growth strategies? What role do data and technology play in this process?
Merriwether: I lead both Corporate Strategy and Analytics in addition to the finance function at Grainger. Part of the Corporate Strategy and Analytics teams’ responsibility is to conduct customer research, represent the voice of the customer, track ongoing customer sentiment and analyze the effectiveness of our investments. The customer research and insights directly influence the business strategy and how the finance team evaluates investments that drive growth and innovation. Bringing the customer insights to the forefront ensures your investment strategy creates the best customer experience and strengthens your competitive edge.
Over my career, I’ve noticed when it’s time to ask for investment funding, the finance team often unnecessarily slows down the investment process and shows up disconnected from the strategy. A more effective approach is to foster finance’s involvement up-front to contribute to and influence the strategy. This leads to less waste and improved time to market. Like every strategic business partner, the earlier you’re involved, the more impact you’ll have on the outcome. CFOs who have a solid understanding of the customer experience tend to partner better with the business on the right investments that improve the customer outcomes, move the strategy forward and accelerate the ability to compete more effectively.
You need clean, reliable customer data and the right technology platform that provides a common view of the customer to create valuable customer insights. Companies need to invest in the ability to harness customer information and develop systems that give the right people the visibility into that data. At Grainger, we continue to evolve our customer intelligence and invest in the right technology to obtain more proactive insights that drive the greatest value and long-term growth for the company.
Thomson: As the CFO’s role evolves into that of strategic business partner/trusted business advisor, how does a “customer-focused” lens apply to internal customers of the CFO such as sales, merchandising, product managers, supply chain, etc.?
Merriwether: One of Grainger’s principles is to start with the customer – we promise to know our customers better than anyone else, anticipate their needs, deliver the right solutions and build authentic, transparent and honest relationships. To be clear, we believe there is only one customer and that is the end customer. Our customer focus is embedded throughout the culture – it’s been built into our DNA for the last 94 years.
For the internal business partners we support, we have set similar expectations. Whether it’s sales, merchandising or supply chain, we are aligned to a common strategy and finance starts with understanding our business partners’ goals and how they can partner to achieve them. From there, we work to develop the best finance talent and invest in initiatives that drive the highest return.
Knowing the customer is step one. It’s also important for CFOs to have a broad, end-to-end view of the business. If you understand the business at a deeper level, you can play a role in solving the business challenges, not just asking questions.
At Grainger, a tenet of strong leadership is applying end-to-end thinking, which you get from having broad experience across different parts of the business. Having a comprehensive view of the business and solid end-to-end thinking is encouraged among all our team members. Our early career finance professionals go through a rotation program that provides experience across the business, where they gain an understanding of how our entire business operates and how we make money. We’ve seen this program contribute to the company’s talent pipeline in other areas, such as supply chain, merchandising and customer service. As CFOs, one of our most important jobs is to create future leaders, and the best leaders know their customer and understand the business end-to-end.
This article has been edited and condensed