The CFO emerges to address the company’s cash crisis by rethinking KPIs

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The CFO emerges to address the company’s cash crisis by rethinking KPIs

Author: Ashley Trang Pham, Investment Director, Mekong Capital

January 30, 2023


March 2022: While other retailers had the best-ever sales with increased demand after COVID, one of my investee companies drastically got into a cash crisis. Two-thirds of its store network was losing money.

Even though, they tried to remediate the situation by closing some underperforming stores, most could not be closed for another 4-5 months due to rental restrictions. At the company, everyone was scared and hopeless. The senior leadership was paralyzed, scared of making any wrong decision that would send the company further downhill. The employees were unsure about the future of the company and the direction that the leadership team was taking. Above all, there was no money for any new initiatives.

The clock was ticking—very loudly. If the leadership team didn’t do something soon, it would be too late to do anything.

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Ashley Trang Pham, Investment Director, Mekong Capital


On a gloomy Wednesday afternoon, the leadership team met in the CEO’s office for the 3rd cash flow projection review meeting. The room was stuffy without any natural light.

The CFO announced that with delaying payments and cutting some minor expenses, they would have enough cash for another 3-4 months. The Board members hammered questions at him: “And what will happen after that? What assumptions are you making for that projection?

It turned out that the forecast assumed that the company would achieve 100% of the sales target in the future months. However, in fact, since the beginning of 2022, the team only achieved 50-60% of those sales targets. So the CFO had to revise the forecast accordingly – on the spot – so all could see the realistic cash situation — without any “hope” that the revenue would increase, or that any new funding sources would come in.

Shockingly, the revised number showed that our cash would run out in a month! Seeing the line on the Excel chart going under the zero mark in the next month, every person in the room felt their heart jump out of their chests. The air suddenly got even stuffier, and the room felt more tense and quiet.


I, as a Board member from Mekong Capital, took in a slow, deep breath and asked, “What is your game plan? What can we do to resolve this situation?” The CFO answered by listing out everything he and his team had tried to do. None had worked. All had failed. He shrugged and concluded that the team had already done everything they could. The CEO nodded in sad agreement. So did other senior staffs and several of the Board.

Again, silence filled in the room. Time stretched while I struggled to avoid falling into this defeatist trap. Finally, I found the courage to say, “I do not accept your answer. I do not accept that we surrender to this situation.” Stunned looks filled the faces around the room. We had to find a way to move forward, to snap out of this cash crisis. We needed something new… ideas…new thinking. I dragged in another deep breath and said, “I do not want to hear about what you have done or about what you could not do. I only want to hear some new thinking — about what you can do. It doesn’t matter how drastic and crazy you think it is.”

After a long pause of frozen stillness, I could almost see their minds begin to click: The CFO and CEO both started commenting on each line of expense and cash outflow items, throwing out new ideas to see what expense they could possibly cut or delay.

Everyone left the meeting with a glimmer of relief — seeing a clear and realistic picture of the cash flow and of the new ideas for dealing with it.


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Ashley is in Mekong Capital’s coaching session.

As a clear picture of the needed actions emerged, all agreed that execution would be of utmost importance. As Mekong Capital’s board member, I witnessed a clear transformation in the team, especially from the CFO. Gone was the “We have done everything we could” attitude, swept away by the hope and energy of resetting KPIs.

The senior leadership team held a meeting where all C-Suite members brainstormed and aligned on new key KPIs, that reflected the new priorities. The discussion focused on the most critical levers the company needed to tap into to prolong the cash runway. The CFO provided leadership and asked all other C-Suite to do the homework before the meeting: Within each department, what would be most critical to address cash flow – and that should become the new KPIs for the rest of the 2nd quarter.

From there, leadership emerged in each department of the company, with conversations initiated around identifying the key drivers for cash flow. All employees, hundreds of people, all understood the emergency situation, and all united around solving it from their specific functions. Each senior leadership team member came to the meeting fully prepared with their department’s proposal with an open mind for discussion and debate. Coming out of the meeting with the top 5 KPIs aligned, each department head started working on the monthly targets for each metric and sending it back to the Finance team. Each metric went through several rounds of finetuning before it was all incorporated into a clear plan to get the company out of the cash crisis.

The new set of KPIs worked great, since they were customized for each department, and each department fully owned their KPIs as they came from themselves, rather than being cascaded down by someone else at the top. Furthermore, the BI team, led by the CFO, ensured that the new KPIs were being tracked daily on one simple BI dashboard, so that everyone was clear about the company’s focus, and always have clarity on whether the company was on track or off track with each area of focus.


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Ashley (on the left) is with Mekong Capital investment team.

Small wins in business performance started showing up. In May, one of the brands successfully cleared up the amount of inventory equivalent to the normal sale quantity of 5 months and converted the slow-selling stocks to cash, which was much needed. With the improved performance, the company successfully obtained a new credit line with a commercial bank to resolve its cash crisis.

To the CFO, this meant that it was time again for new thinking and new ideas that could lead the company from its current crisis relief into sustained profitability. The CFO, again, took the lead to re-organize the team to revise the company’s top KPIs. The key focus for this time was crystal clear: it was shifted from cash flow to profitability.

Changing the top KPIs twice in 3 months was certainly not common. There was considerable grumbling and backlash from each department. They worried that the strategic directions were changed too frequently. They feared that operations would be disrupted. However, the CFO and CEO determined that the recently added cash flow KPIs are no longer serving the company to achieve profitability, and thus must be modified. Another KPI working session was called, and after a few other rounds of debating and fine-tuning the targets, the third version of 2022 top company KPIs was born. Only 4 days later, the daily focus dashboard was changed to reflect the new KPIs [1] and targets.

Amazingly, when the KPIs changed, the company’s way of working was changed—effectively reinvented to accelerate the adaptation to new key focuses.

After 3 months, in October, the company finally achieved a positive company EBITDA for the first time after 20 months. By the end of 2022, the company has achieved a third consecutive month of positive company EBITDA, with a clear action plan for expansion in 2023 and onward.


If doing “everything you can think of” hasn’t worked, it’s not time to give up. It’s time for new thinking: Setting the right KPIs at the right time, with a clear focus and target, and the willingness to rapidly change the KPIs to address the most critical areas of the evolving business situation. Innovative and effective execution first hinge on new and innovative thinking.

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Ashley (the second from the left) and Mekong Capital team.

[1] KPI is one of 15 elements of VDI framework, with the intention that the KPIs are continuously optimized to put employees’ attention on the results/measures which will have the biggest impact towards the vision, with the minimal effort and waste.

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Mekong Capital makes investments in consumer-driven businesses and adds substantial value to those companies based on its proven framework called Vision Driven Investing. Our investee companies are typically among the fastest-growing companies in Vietnam’s consumer sectors.

In January 2022, Mekong Capital founder Chris Freund published Crab Hotpot, a story about a bunch of crabs who found themselves stuck in a boiling pot. The colorful cover of “Crab Hot Pot,” complete with expressive cartoon crustaceans, looks like a children’s tale at first glance. But as one continues reading, it becomes clear that the work has an important message about organizational transformation, leadership and focusing on a clear vision for the future.

The book is available on Tiki (Hard copy): (Vietnamese) and Amazon: (English)

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