For a middle size company ($10-$50 million in revenues), the CEO’s role is to continue to be a visionary and a finder of new ideas, see Finders-Minders-Grinders. In order for this to happen, the CEO often needs to delegate some of the day-to-day and even some of the strategic initiatives to the CFO. In essence, the CFO needs to become the owner’s right hand person.
This special relationship requires the CFO to have the following leadership qualities:
1. The Story Teller
The CFO should be able to spend 10% of his/her time understanding the past and 90% of the time molding the future. In my career I worked for a company that spent 7 days to close the books, then I worked for a company that spent 90 days to do the same. Clearly, the job of the CFO is to spend as little time as possible in the past (i.e. closing the books) in order to focus on telling everyone in the organization what happened and what do we need to do. In other words, the CFO needs to be the CFC (Chief Financial Communicator), he/she needs to have the ability to communicate financial information in “plain english” to the entire organization in order to promote change.
2. The Change Agent
In many cases the CFO carries the “change” flag because more often than not the CFO is the one that sells and implements new ideas. A new technology; a new way of doing business; or a new process are just some of the examples that CFOs are responsible for managing and implementing. In order to achieve economies of scale or productivity gains the CFO needs to have the passion and the leadership qualities to implement change throughout the organization.
3. The Chess Player
One of the most important roles for a CFO is to balance short-term goals without sacrificing the long-term vision. One example could be managing day-to-day revenue goals and at the same time moving the organization towards an exit event, such as an IPO or a sale. One way to manage this is through well thought out KPI’s that include short and long term indicators. See KPIs
4. The Risk Manager
Depending on the industry, there is risk in everything the company does, operational risk, financial risk, political risk, product liability, compliance, security, etc. The CFO is ultimately responsible for assessing the pertinent risks and having a plan to mitigate those possible issues. Risk management should be part of any business plan that the CFO provides the owner.
In summary these are the top key leadership qualities that CEO’s should look for when hiring a right hand person. Accounting and tax functions are not longer the main focus of the CFO. The CFO needs to be able to take information, analyze it, formulate the strategy, and with the help of others, lead the company to execute its initiatives.
Ricardo Lowe, B2B CFO Partner (954)632 3939 ricardolowe@B2BCFO.com
About B2B CFO Founded in 1987, B2B CFO is the largest CFO and Exit Transition Services company in the nation. We have a nationwide presence with more than 225 CFO and Transition experts that serve privately-held companies. Contact Ricardo Lowe for a complimentary Discovery Analysis at 954 632 3939 or via email at: ricardolowe@B2BCFO.com