Strategy and the CFO in Middle Market Companies

Strategy may be the most important, and most misunderstood, word in business. The term originated in a strictly military context, from the Greek strategos, meaning general or military commander.

Today, “strategy” is used everywhere – business, politics, sports – and is often reduced to a simple plan of action. But for business owners, the real questions are more practical: How do we define a strategy that actually guides decisions, and who is accountable for making sure we stick to it?

Companies typically benefit from adopting a strategic framework that is easy to understand and prescriptive enough to use day to day. To paraphrase Einstein, strategy should be “as simple as possible, but no simpler.”

One framework that works particularly well for middle market companies is Playing to Win, developed by A.G. Lafley and Roger Martin. It defines strategy as a set of reinforcing choices, built around five interrelated questions:

1. What is our winning aspiration?
2. Where will we play?
3. How will we win (differentiation or low-cost provider)?
4. What assets and resources are required?
5. What systems and processes must be in place?

Most middle market companies cannot justify hiring a Chief Strategy Officer to take ownership of this exercise. As a result, the CFO, or a fractional CFO, is often best positioned to help leadership answer these questions and ensure decisions remain consistent with the chosen strategy over time.

In practice, the CFO’s role often looks like this:

Winning aspiration

Here, the CFO helps define measurable aspirations and pressure‑tests whether the company can realistically achieve its market leadership, revenue, and profitability goals based on historical performance, capital constraints, and market growth.

Where to play

The CFO enables focus by producing actionable reporting by end market, geography, channel, and customer type, helping leadership decide where to invest and where to retrench.

How to win

If the strategy is cost leadership, the CFO focuses on identifying scale advantages, rationalizing costs, standardizing offerings, and establishing disciplined cost reporting.

If the strategy is differentiation, the CFO helps ensure that investments in customization, responsiveness, and relationship‑based capabilities are prioritized and protected.

Assets and resources

Aligned with the chosen way to win, the CFO helps leaders understand trade‑offs related to premium talent, training, excess capacity, and breadth of offerings, as well as the financial implications of those decisions.

Systems and processes

Working with other leaders, the CFO helps design systems that reinforce the strategy. CRM tools, compensation structures, forecasting cadence, and performance metrics should all align with how the company intends to win.

This may sound theoretical, but the performance impact is real. According to a recent McKinsey study, only about 15% of companies consistently outperform their peers, and those companies share a defining trait: sustained commitment to a clear, coherent strategy that guides investment, capability building, and execution. Those outperformers achieve approximately:

• ~5 percentage points higher revenue growth
• ~7 percentage points higher profitability

Many middle market companies lack a CFO who can help define, reinforce, and sustain a coherent strategy. When that strategic discipline is missing, results tend to be inconsistent and harder to sustain. Time and money are wasted pursuing disconnected opportunities that lack the scale required to succeed.

If your company lacks this level of financial leadership, a fractional CFO with strategy experience can cost‑effectively bring clarity, discipline, and consistency to how you win.

Interested in fractional CFO services for your business? Keiter’s Client Accounting & Finance Services provide flexible access to highly skilled accounting and finance professionals without the overhead of hiring a full-time controller or CFO. Contact your Keiter Opportunity Advisor| Email | Call: 804.747.0000 to learn more.