No CFO arrives to destroy value.
And yet, few periods concentrate as much silent risk as their first 90 days. Not for lack of judgement. For excessive haste.
The new CFO arrives with an implicit mandate: to demonstrate impact. And to demonstrate it quickly. No one explicitly demands it. The situation demands it.
Listening seems like slowness. Cutting seems like leadership. And the visibility of action ends up replacing the quality of analysis. From this pressure arise the usual moves: cross-cutting budgets immediate renegotiation of major contracts pressure on suppliers based solely on price frozen projects.
On paper, immediate results.
In practice, three assets begin to erode. And no report reflects this.
1. Supplier relationships
- Behind every significant contract are years of relationship
- The supplier who prioritizes you when there's a shortage. The one who accepts an urgent request on a Friday afternoon. The one who finances you without saying so, with flexible payment terms.
- When the only focus is on price, none of that disappears overnight.
It deteriorates silently. Longer response times. Less flexibility. Lower priority. And when the deterioration becomes noticeable (usually at the worst possible moment), the savings have already cost more than they generated.
2. The knowledge embedded in contracts
- Many conditions that seem like inefficiencies are, in reality, scars: the response to a problem that already occurred.
- The maintenance that seems expensive... until you understand what downtime it prevents. The second supplier that seems redundant... until the first one fails.
- Cutting back on what you haven't understood isn't optimisation... It's gambling.
3. Cost Culture
the new CFO's first act is indiscriminate cutting, the organisation learns the wrong lesson:
- Inflating budgets
- hiding line items
- protecting themselves
Just the opposite of what a finance department needs - transparency. Cost discipline isn't imposed by internal memo. It's built on credibility
And credibility, once lost, can't be renegotiated. Cutting isn't optimising. Cutting is reducing the price of what you buy. optimising is reducing the total cost of what you need: service, quality, risk, management time.
The price is on the invoice. The cost, almost never. That's why a savings plan finalised before reading a single invoice isn't vision.
It's prejudice disguised as a presentation. What do those who get it right do differently?
They turn the first 90 days into a diagnosis, not a demonstration. They map actual spending, not budgeted spending. They verify that billed rates match agreed-upon rates. They detect billing errors and duplicate services.They review signed terms and conditions that were never implemented. These types of savings exist in almost every organisation.They don't require sacrificing service. They don't strain relationships. They simply require looking where no one has looked for a long time.
And they buy something more valuable than a headline on the board: credibility without organizational cost. With that credibility, the difficult decisions (because there always are some) come later. With legitimacy. And with data .A shared responsibility. The board that demands visible savings in the first quarter is unknowingly buying into the behaviour it will later regret.
Giving the new CFO the mandate and the time to understand before cutting is not being lenient. It's the only way to ensure that the savings of the first year don't become the cost overruns of the third. Because a CFO isn't measured by the cuts they make in their first 90 days. They're measured by the savings that remain twelve months later.
