Just as our world has infrastructure to support transportation, commerce, education, and so on, every business has an infrastructure to support all of its efforts and initiatives to generate cash flow and profits. Some businesses have far too little infrastructure – imagine trying to drink from a fire hydrant. Other businesses have too much infrastructure – imagine being the only fan sitting in the stands at the SuperBowl.
In business, infrastructure consists of people, technology, systems, procedures, policies, processes, intellectual property, and more. All of these elements require significant coordination and leadership to work cohesively to help the firm progress. Every company can improve its infrastructure, whether it be in the form of an operations manual for employees or an upgraded piece of equipment to improve production capacity.
The CFO position of a company is the protector of and advocate for improving the infrastructure of the firm. With the right infrastructure, a company can truly gain a sustainable competitive advantage that creates increased cash flow and profitability.