The commercial proposition was easy to explain. Give customers more time, earn additional income and make our programme more attractive without assuming a larger monthly origination flow. I initially supported that account. It described a useful customer benefit and appeared to improve the economics of an existing activity. What I had not adequately rebuilt was the amount of funding the company would need to support the same flow for longer. The omission sat inside the recommendation, not in a technical appendix that somebody else had failed to finish.
The 2023 proposal extended the stated funded period from 45 to 75 days. Its comparison showed ₹5.4 crore additional annual income before incremental funding cost. Finance asked what happened to the outstanding amount when each month's business remained funded for another thirty days. That question should have been central to my first strategic assessment. A company can originate the same amount each month and still need substantially more money tied up in the activity. Flow and outstanding exposure answer different questions about the business.
Begin with the amount outstanding, not only the flow
We restated the comparison as a deliberately simple steady-state illustration. It assumed ₹60 crore of funded principal originated in each 30-day month, uniform flow and repayment at the stated duration. Forty-five days occupied ₹90 crore on average. Seventy-five days occupied ₹150 crore. The difference was ₹60 crore. This was not a model of every repayment pattern or an assertion that actual customer behaviour would be uniform. Its purpose was to expose a funding demand that the attractive income statement had left insufficiently visible.
At an assumed 12% annual funding cost, the incremental ₹60 crore implied ₹7.2 crore a year. Against the proposed ₹5.4 crore additional income, the illustration was ₹1.8 crore negative before other incremental costs and credit effects. We did not call the rate a current market quotation or the result a forecast of realised loss. Those qualifications did not make the omission harmless. Even a limited comparison had shown that the original recommendation had not earned its confidence on the assumptions it presented.
Commercial colleagues argued that a longer funded period could attract more business. That possibility deserved examination, but it was a new proposition requiring its own economics, risk assessment and evidence. It could not repair the existing model merely by being mentioned. More originations could change income and also the amount outstanding, concentration and operating demands. I asked the team to separate the customer hypothesis from the arithmetic already being used to justify the extension, rather than let the hope of additional volume substitute for a complete comparison.
The distinction matters because strategic papers often move between measures without announcing the change. A sales discussion concerns annual flow, a funding question concerns the balance outstanding through time, and a contribution estimate may omit some costs by design. Each measure can be useful. The problem begins when one is allowed to stand in for the others. I want the paper to say what its number describes and which decision it can support, with enough continuity that directors can follow the connection without reconstructing the model themselves.
Give the assumption a place in the recommendation
The thirty-day month and uniform repayment pattern belonged beside the result. They were not embarrassments to hide, nor substitutes for the fuller work needed before a commitment. An explicit illustration allows colleagues to challenge whether the relationship holds under the actual proposed terms. If repayment is uneven, if origination changes or if the facility has different costs and conditions, the comparison must change. Keeping assumptions visible helps identify what further work matters instead of producing a more elaborate spreadsheet that still conceals the central demand.
I also needed to preserve the difference between the funding requirement and expenditure. The ₹60 crore was additional money the proposed activity would occupy under the stated assumptions. Rejecting the proposition did not create a ₹60 crore profit or release cash already spent. Similarly, the ₹7.2 crore was an illustrated annual funding cost, not the entire cost of the programme. These distinctions are not pedantic when a growth story can otherwise turn an unaccepted commitment into a large claimed saving.
My responsibility as CSO was to change the recommendation in response to that account. The CFO retained financing and accounting responsibilities; credit and risk colleagues retained their decisions. I could not resolve the issue by quietly changing a rate assumption until the proposal looked favourable, or by describing the model as finance's problem. Strategy had assembled the commercial argument. Strategy therefore needed to acknowledge what the correction meant for the choice being put to the CEO and the relevant approving bodies.
I withdrew support for the broad extension. We asked the responsible owners to examine a narrower proposition with different terms and customer economics. That alternative was further work, not a completed launch. No customer obligation changed as a result of the planning exercise. The immediate outcome was less certainty in the growth plan and more analysis before a decision. A truthful account should retain that unfinished state rather than convert the withdrawal into a success story about a replacement whose merits had not yet been established.
A correction should change the decision
The experience made me more attentive to how a recommendation survives challenge. A team can accept that a number is incomplete while continuing to use the same headline and conclusion. That is acknowledgement without correction. In this case the missing funding demand was material to the proposition itself. The plan needed to lose the proposed extension unless a revised case could justify it. I wanted the record to show that I had supported the earlier view and had changed it, not imply that I had always been the person warning against it.
For directors, I would frame the lesson as a question about the resources behind growth. What remains committed for how long, under which conditions, and who bears the consequences if the expected cycle changes? The answer may still support expansion. Longer terms can have a legitimate commercial purpose. But the board should be able to see the demand alongside the income and understand which assumptions the recommendation depends on, before a useful customer benefit becomes an unexamined claim about value for the company.
I now ask for the time dimension early enough to influence the proposition. That means involving finance and risk while terms are still being shaped, not inviting them only to validate a polished commercial story. It also means leaving space for a smaller or unfinished recommendation. The company's strategy is stronger when the proposed activity and its funding can be explained together, even if that explanation requires me to abandon a view I had previously argued for.