These are not in any way `bean counters` to be tolerated, they
are strategic hires and getting the right one can be a make or break decision
if you want to succeed in the long term.
So it’s worth thinking early on about the eventuality of hiring a decent
CFO.
Amazing creativity
If you are founder of a successful business you’ll have got
pretty used to keeping a tight eye on the numbers from the start. But the best CFOs
I’ve worked with never cease to amaze me in their creative ability to seemingly
glance at set of company accounts, read them like a book, instantly spotting
the key issues, in a strategic context, and describing them in plain English.
The ability to perform laser-guided reading of spreadsheets
is usually a good indicator of a person you want to hire. Particularly if they can show that they can
use this information and combine it with experience to predict potential
challenges in the future, advising on the potential financial approaches that
will smooth the way forward for your firm.
Crystal balls
This is vitally important for entrepreneurial businesses
where the rate of change is so fast and where you and other leaders are
consumed by operational issues - from hitting the sales targets to getting the
right people on board. So don’t expect
your CFO to have a crystal ball, but do expect them to have an uncanny ability
to tell you what’s likely to happen next in your business, or at least have a
reassuring grip of financial cause and effect and which fiscal levers to pull
to push the company in particular direction.
In addition to making a major contribution to running the
business on a day-to-day basis, having the right person in the role is also key
in maximising the value of your operation. So in hiring a CFO you need to think
not just in terms of their contribution in financial planning, management and
governance but also about their role in looking
for the right investment, acquisitions or when, eventually, planning an
exit. This means they’ll need to be able to do a pretty decent poker face as
they will be key to some of your most important negotiations.
Suited and booted
Of course, the informal environment of most entrepreneurial
businesses may have your CFO wedded to their jeans but they also have to be capable
of facing externally towards the more conservative elements of the business
community. So they need to be someone
who doesn’t baulk at getting suited and booted when it comes to meeting with
auditors, banks, investors and, eventually, the City and who doesn’t look like
they are being strangled by their tie.
You certainly don’t need a CFO who is a shrinking
violet. They need to be robust and not
afraid to challenge any of their colleagues to a reality check. To that extent,
your CFO should be the board voice of unequivocal, numbers-backed reason about
what can really be achieved with what resources and in what timescale.
Naturally, for me, one of the things that come to my mind in
differentiating an excellent CFO from a merely good one is their communication
skills. It’s a sweeping but, I think,
fair generalisation to say that those that are logical and good with figures
are often not the most articulate in the room; just as those who are literate
and can tell a good story often find it hard to add up.
Effective
communication
But a CFO worth their salt needs to be able to assemble and pick
out the key elements of budgets, forecasts and accounts and communicate them
effectively not just to other leaders in the business but to the company as a
whole. There is nothing worse that the
staff meeting where the assembled throng sit in dread of the earnest `numbers
presentation` delivered in a way that leaves no one in the audience any the
wiser nor clearer about what it’s supposed to mean for their role. Or that
sends them to sleep.
This is important not just for tactical reasons but to
ensure that the whole company thinks constantly and consistently in terms of
the key numbers and their contribution to achieving them. In the same way as
the best CTOs can highlight what is important and explain it in acronym-free
and accessible language, CFOs have to bring spreadsheets to life.
Powerful and
inspiring
So, as well as being in charge of the numbers, CFOs need to
be business leaders in their own right and be part of a powerful and inspiring
team. They will need to be able drive the finance team, but they also need to approachable
and be capable of explaining that numbers exist in context. So a CFO must be
able to visibly connect the work of finance to all aspects of day-to-day
operations and demonstrate business smarts in doing so. And that means being engaged in the whole of
the business and its people. Being comfortable with managing by walking about
is a skill all CFOs should master.
Problem solvers not
problem creators
In this respect I’ve found it useful to rotate internal
services teams, particularly finance and HR, around the business. If they sit
with other operational groups for extended periods they build relationships
outside of their immediate team and become intimate with all aspects of the
business, being seen as problem solvers not problem creators.
Over the years I’ve worked with some CFOs who have been
genuinely fascinated by all aspects of the business and its people. This, in itself, is delightful but it was also
vital to them not being seen as the head of the numbers ghetto as much as it
was valuable in gaining an all-important real-time perspective on what made the
company tick. And it’s that passion to understand everything about the business
that ultimately marks out the leading CFOs from the also-rans.
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