How to communicate the value of design to your CFO?

Do you want your CFO to understand the value of design, but they just can't get it?

Many leaders in our community shared — they want to better communicate the value of design to their CFO or CEO. This is why we asked Martina Presnajderova, leader of Pricing at Deel to share her thoughts and practical advice on how to talk with CFOs and understand finance. What came out of this is our Finance 101 for Design Leaders Masterclass and now we are sharing it with everyone.

Watch the full masterclass recording below to learn:

► How to communicate the value of design to CFOs

► Business terms every design leader should know

► How to choose the pricing model for your business or product

► And more exciting answers to the questions.

Or, as always, read our beloved highlights in this newsletter:

You can also watch or listen to the full episode via Spotify and Apple Podcasts.

Or, as always here are our highlights from the masterclass:

What are the most important financial metrics that design leaders should understand?

According to Martina, design leaders should focus on understanding these key metrics:

► EBITDA margin: This measures a company's overall financial performance and profitability. Different industries have different expectations for EBITDA, so it's important to understand what's typical for your sector.

► Gross margin: How efficiently companies make money by subtracting costs from revenue

► PnL: A financial report that summarises how much company earned and spent over a specific period. It shows a high-level view of a company's financial health.

► Net profit: The final amount a company keeps after all expenses are subtracted from revenue. This is what's left to share with owners, put back into the business, or save. A good net profit shows efficient operations and sustainable business practices.

What to do if CFO cannot understand the value of design?

When dealing with CFOs who are primarily numbers-driven, you'll need to adapt your approach while still advocating for design's intangible value.

► Focus on providing clear cost expectations rather than promising specific returns. "We need X People, X time and here is the budget we need". Financial leaders need clear outline of the investment required. This is how you create a foundation for the conversation.

► Present your design initiative with a clear hypothesis and measurement plan: "We have this hypothesis, so we're gonna measure it. We are gonna roll out the new design, and then let's see what is it doing at the top of the funnel, for example." This demonstrates both your business understanding and commitment to proving value.

► Even if you can't predict exact outcomes, show that you'll track results so they will be able to explain the spending to the investors.

Is it really important for designers to know how to read financial reports? Or would it be more impactful to focus on how to present a UX strategy? 

Yes, it is very important for designers to understand finance, for several compelling reasons:

► It gives you a significant competitive advantage. Finance professionals are accustomed to others avoiding their domain and language. When you're willing to meet them halfway, you immediately stand out.

► Finance teams often enter the process late - after product teams have built something, finance needs to track and justify expenditures. By understanding finance early, you can create better alignment.

► Most importantly, finance controls the resources you need. When seeking new headcount, budget for tools, or other resources, having finance allies makes a tremendous difference. Understanding their world helps you:

• Build valuable relationships with finance colleagues
• Frame requests in ways that demonstrate financial literacy

For example, requesting a new headcount by saying "I'd like to add one designer to our team. I know this would increase our budget by 5%, but since we're handling 20% more projects now, the cost per project would actually go down. This means it won't hurt our overall profitability." This way of communicating the need creates a much more effective conversation than simply asking "Can I hire more people?" without financial context.

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