If cash only shows up in your board meetings once a quarter, it’s already too late. As founder and CEO of Managed Services Group—a security provider specializing in regulated mid‑sized businesses—I’ve spent years building what I call a “liquidity as strategy” discipline, drawing as much from our compliance framework as from our finance function.
Why I target 9–12 months of runway
I think about cash the same way I think about cybersecurity: it’s insurance and leverage. Yes, holding more cash has an opportunity cost, but so does being forced to raise capital, cut pricing discipline or delay decisions when conditions tighten. In today’s environment, cash buys speed, optionality and negotiating power. The ROI isn’t financial engineering, it’s survival—plus the ability to move while others hesitate.
In regulated environments especially, resilience is not theoretical. Liquidity plays the same role as compliance: it reduces downside risk while creating freedom to act.
The “lazy balance sheet” myth
The biggest misconception I hear from other CEOs is that cash sitting on the balance sheet is idle or unproductive. In reality, undercapitalized companies are fragile and often end up making reactive decisions that permanently damage margins or culture. Another myth is that access to credit is the same as liquidity—it isn’t. Credit is conditional; cash is control.
I see a similar misconception with compliance: CEOs often view it as overhead, when in practice it frequently improves discipline, predictability and enterprise value.
Why more cash isn’t sub‑optimal
When a CEO tells me that much cash is sub‑optimal, I ask one question: “What decision would become easier if you had more cash?” Most CEOs immediately name hiring, M&A or absorbing a short‑term shock. Cash doesn’t replace growth investment, it enables smarter growth investment. We don’t hold liquidity to avoid risk; we hold it so we can choose the right risks.
That same logic applies to governance and compliance. The goal isn’t caution, it’s clarity.
How we decide when to deploy cash
We think in tiers. First, we protect a minimum runway that ensures resilience under stress—this is non‑negotiable. Above that, cash becomes strategic capital. If an opportunity strengthens long‑term EBITDA durability, improves resilience or creates asymmetric upside—such as talent, automation or tuck‑in M&A—we lean forward. If it boosts short‑term revenue at the expense of discipline, we pass.
High‑quality EBITDA isn’t just about growth; it’s about predictability and risk‑adjusted returns.
A 90‑day liquidity plan for any mid‑market CEO
Regardless of industry, I’d focus on three actions.
•Pricing reality check: Ensure pricing reflects cost, risk and capital intensity. Most companies underprice risk, especially operational and compliance risk.
•Cash conversion: Shorten billing cycles, remove friction from invoicing and get serious about AR discipline.
•Expense hygiene: Eliminate silent margin killers, duplicate vendors, underused tools and manual processes.
You don’t need perfection, just momentum.
Structuring a cross‑functional cash task force
Cash discipline can’t live solely in finance. We brought together leaders from sales, operations, IT and finance with a single objective: improve cash predictability without harming service quality. Finance provided the data, but operational leaders owned execution. That shared ownership is what made change stick.
It mirrors what works in compliance initiatives as well: accountability across functions, not boxed into one department.
The review rhythm that actually works
Cash deserves its own airtime. We review it weekly at the leadership level, monthly with deeper forecasting and quarterly with the board. Each cadence answers a different question: weekly is awareness, monthly is course correction and quarterly is strategy. If cash only shows up quarterly, it’s already too late.
If I had to limit the CEO cash dashboard to five metrics they’d be:
1. Months of of cash on hand
2. Rolling 90‑day cash forecast
3. AR aging and concentration
4. EBITDA by service or product line
5. Committed vs. discretionary spend
That fits on a phone and quickly tells you whether you’re steering—or drifting.
Shocks we now model beyond Covid
Beyond pandemics, we now model cyber incidents, credit tightening, vendor concentration risk and broader geopolitical volatility. None of these require panic, but they do require preparedness. And the result hasn’t been fear‑driven hoarding, but a more confident liquidity target grounded in real operational risk.
Covid exposed optimistic assumptions. We shortened forecast windows, improved data inputs and focused less on precision and more on directional accuracy. Forecasting isn’t about being right, it’s about seeing trouble early enough to act.
How cash discipline became a competitive advantage
Later disruptions created opportunities to hire critical talent and invest ahead of demand while competitors slowed down. We could move quickly because we weren’t negotiating with our balance sheet at the same time. Liquidity enabled execution.
SOC 2, a third‑party audit of our security and controls, enforces evidence, cadence and accountability. That mindset spilled directly into financial governance, documented assumptions, repeatable reviews and clear ownership. Cash became a managed control, not a vague comfort metric.
For CEOs outside regulated industries, the lesson still applies: discipline doesn’t stifle growth—it protects it and improves its quality.
Embedding cash discipline beyond finance
Sales leaders see margin trade‑offs, operations leaders manage cost curves and IT leaders influence capital intensity. When each group understands how their decisions affect cash, behavior changes. Cash stops being abstract and becomes operational.
Early in COVID, demand looked strong, but collections told a different story. That disconnect made it clear the old model wasn’t acceptable. From that week forward, liquidity stopped being assumed and started being engineered.
Repricing services is uncomfortable, internally and externally. But clarity is kinder than underpricing risk. We learned that disciplined pricing builds respect, not resistance.
My one‑sentence philosophy? In a volatile world, liquidity isn’t about fear; it’s about freedom.
