Over the years I’ve been asked what makes a great Chief Financial Officer countless times. When our marketing team alerted me, that this question is a frequent search query that results in visits to our firm website – I thought I’d share my views on what separates the good ones from the invaluable ones.
Before we get to separating the wheat from the chaff let’s talk a bit about a few minimum essentials of a CFO so we don’t confuse the multitude of Controllers masquerading as Chief Financial Officers in title only. I blogged a bit about the different responsibilities of each of these key roles a couple of months back that I’ll summarize a bit below, click here for more details.
Minimum Essentials of a Chief Financial Officer – The Good
- Technically proficient on all aspects of financial reporting, oversees timely preparation, provides meaningful analysis and importantly develops and implements strategic solutions.
- Manages the short, mid and long-term cash requirements like there’s no tomorrow.
- Tax savvy and oversees implementation of effective strategy.
- Risk management proficient and develops internal controls, policies and procedures to protect company assets.
- Coordinates all facets of Annual Audit/Review and has managed each of the above responsibilities sufficiently to insure that no adverse surprises surface.
Skills and qualities beyond Minimum Essentials – The Better
- Not the “No guy/gal” that everyone is sent when no one else cares to say no rather the “trusted go to solution person” staff turns to when problems or conflict arise.
- Has excellent managerial skills and can lead and oversee functions beyond the back office that often include: HR, IT, Legal, Sales & Marketing, Tax, Risk Management, sometimes production/manufacturing and occasionally even product development.
If you aren’t overseeing functions beyond finance and accounting you’re not yet a CFO in my view.
Skills and qualities of the invaluable CFOs – The Best
In addition to bringing all the above to the table –the best bring more, some functional capabilities, some more subjective.
- They plan, execute and integrate Acquisitions & Divestitures.
- They quarterback your Exit Planning Strategy – while there are parallels to all your other acquisitions & divestitures there are many, many other considerations with your own exit.
- They’ve earned and carefully cultivated your absolute trust and belief.
- Get as close to everyone they can on some personal level.
- Make everyone feel ownership.
- Focus on strengths.
- Support creative thinking and considered risk-taking initiatives.
- Build a culture of respect between managers and employees yet don’t stifle healthy disagreement.
- Manage down in much the same way they manage up.
- Are passionate.
- Exude confidence and faith in the future – even, …. especially when you may have some doubt … that’s when the troops likely need it the most.
- Possess a seemingly 6th sense and ‘just know’ when even the best laid plans need to be tweaked.
Those are my views and while not intended as an exhaustive checklist, I can say with conviction, if you find a Chief Financial Officer that fits the above bill, they’re worth their weight in gold!