Amazon India’s CFO shares the art of decision-making in a changing environment, CFO News, ETCFO

A CFO’s strategic decision-making would involve analytical data, insights, forecasting, and planning, but mastering the art of decision-making in times of disruption can be challenging.

“You can always get lost in change,” said Raghava Rao, vice president of finance and chief financial officer of Amazon India.

Considering changing variables like interest rates, capital, your P&L, sales, number of employees, and employee turnover is important. However, Rao shared that while change is constant, you have to deal with what is not going to change.

“Decision-making framework: Make sure your people understand the framework in which you make decisions. Think long term but be aware of what is happening in the short term,” he said.

He cited an example from Amazon, “are we focused enough on the customer, and are we able to serve the customer better than we could serve them before. If a set of these principles are embedded in the organization and ‘they won’t change, I think that’s the best way to deal with change,’ he advised.

Another way to master decision-making in these changing times is to focus on the organization’s cash flow and connect it to how you serve the customer. Rao believes in being able to correlate and connect the two: serving the customer well with non-financial metrics and financial metrics on cash flow.

“Regardless of any changes that occur in the environment, stay focused on that and you’ll do a better job,” Rao said.

How the CFO Prioritizes Their Time

Wearing several hats, the CFO must be well connected with the company. Rao shared that he spends a lot of time with business partners, participating in business reviews – “listening to the voice of the customer”.

“That’s exactly how you know your business is doing well, in terms of keeping customers front and center by listening to customer stories, customer data, etc.,” he said.

Rao emphasizes that leadership is a time management priority for the CFO.

“Every CFO needs to stay connected to the pulse of the finance team as you lead it. So, what is the morale of the team? What conversations did the team have? Do they feel good about their job? Do they feel stretched enough? And what is their point of view? And do they have a point of view different from the point of view which may be the dominant logic in this enterprise? I think listening to that is an important part of the role,” he explained.

When it comes to governance, the CFO needs to make sure they review numbers, performance, budget, balance sheet health, cash flow, compliance reporting, etc., he concluded.