Today’s successful CFOs are operational leaders who drive genuine value creation across multiple functions. Isolated finance chiefs who remain siloed in spreadsheets are increasingly at risk of being left behind. For CFOs working in companies with physical operations, the ability to effectively “walk the floor” is vital. This hands-on approach can reveal opportunities to improve efficiency, uncover hidden waste, and drive EBITDA that might be missed from behind a desk.
“Sponsors want CFOs with a white-collar brain and a blue-collar style of engagement. They want leaders who aren’t afraid to get their hands dirty and who actively seek out opportunities to do so. Insatiable curiosity is essential for today’s finance leaders to develop full command of a portfolio company’s operations and uncover opportunities for margin improvement.” — Rob Huxtable, Partner at Falcon
“Walking the floor” reflects this curiosity. Rooted in LEAN management principles, this practice is also referred to as a Gemba walk, originating from the Japanese word gemba (or (genba), meaning “the actual or real place.” A Gemba walk represents a proactive effort from management to spend more time among their company’s frontline workers and observe processes firsthand. While traditionally associated with a consistent physical presence on the shop, factory or warehouse floor, the concept can be applied anywhere from retail aisles to sales bullpens.
Companies recently acquired by PE firms often have substantial room for waste reduction and process improvement. Gemba walks help CFOs capture millions of dollars in margin expansion that might otherwise escape them.
For instance, a Gemba walk led the CFO of a middle-market ready-to-eat popcorn company to discover that the holes in their quality control filt...