A couple of days ago, I was part of a meeting of the C-Suite of a client company. The company is young but growing briskly. I’d like to say that I spent most of my time at that meeting discussing cash flow, Key Performance Indicators (KPI’s) and financial projections. We did do all of this but we spent perhaps 10 minutes going through it all. The rest of the meeting/work session was devoted to operations, marketing strategy, business development, positioning for future fundraising and relationship management. The last item was the common thread that ran through the entire session as we discussed the different stakeholders. As their (outsourced) CFO, most of the value that I contributed at this session was strategizing with the rest of the management team on the best way to manage the various relationships and interests involved. I was pleasantly reminded of this when I got a thank you note from the founder and CEO after the session.
CFO’s typically fall into the categories of accounting and or finance expert, generalist, performance leader, growth champion and very occasionally “people person”. The truth is that a CFO wears all of these hats at one point or the other. An effective CFO has to be a good partner to the business and occasionally even a business coach to the management team. Being an expert in Finance is just the foundation in my opinion.
Effective Communication: Most if not all of us know that how good we are at something is of little use if we can’t communicate the value of what we do in a way that is easily understood by our audience. When one has a background in accounting or finance often referred to as the “numbers”, it is easy to fall into the trap of seeing the world around them in terms of numbers and the even bigger trap of thinking that everyone else is able to see the same thing. Being able to translate the numbers into the causes or effects of various, plans , processes and decisions that affect customers, employees, shareholders, vendors and leaders of a business are as important as the underlying finance or accounting skills. This ensures a common understanding and alignment across and among internal and external stakeholders. I encourage anyone who wishes to be a CFO someday to spend as much time as possible with the operating departments of a business such as the production line, inbound and outbound logistics, warehousing, sales, marketing and distribution. Also join members of the sales teams on sales calls with prospects or when visiting existing customers. This will provide the necessary exposure to better understand the nuances of the roles played by various departments. This in turn will gain their respect and have a perspective of how they work together as a whole. In short, be a decent generalist while excelling at your core skillset.
Interpersonal Skills: Good interpersonal skills are critical to build trust with the various departments of a business and to get the “real stories” on what’s happening on the ground that inevitably show up in the income statement and on the balance sheet (I have plenty of horror stories regarding situations that senior management were unaware of until they showed up as “surprises”).
Having gone through this series of articles on the role of a CFO (Contollership, Treasury Management, Performance Management and being a good partner to the business) one may ask how does one do all of this well, while complying with the ever-increasing list of requirements introduced by various governing bodies? In my opinion, the answer is that it’s both an art and a science and getting the balance just right is the goal. A really good CFO is able to make this all seem intuitive, natural and maybe even easy, especially in fluid or fast changing business environments
