|The CFO RoundTable NYC hosted 70+ CFOs at its May 30, 2013 event.|
The role of the CFO has evolved dramatically over the past several years. While we all can agree that this evolution is for the better of the companies and industries they operate in, it’s also left us to wonder what traits, characteristics, and styles make truly great CFOs.
On Thursday, May 30, 2013 The CFO RoundTable NYC gathered CEOs, investors and talent experts to present The Habits of Highly Effective CFOs, the first event of its 2013 – 2014 season. This panel sought to answer how effective CFOs can:
- Clarify and drive company strategy, raise executive accountability to shareholders, employees and the public at large
- Nurture transparency and trust at all levels of their company
- Embrace their position as a custodian and manager of key business performance metrics, and effective communicate those metrics to their key stakeholders
- Build a strong team to further company strategy
Our panel, which addressed a crowd of 70+ CFOs and other senior financial executives, included:
- Dawn Fay, District President, Robert Half International
- Jen Gabler, Partner, Marlborough Street Partners and Co-Chair, The CFO RoundTable NYC
- Ken Marshall, CEO, CorrelSense
- Kevin Rakin, Board Member, Private Investor
- James D. Robinson, Co-Founder, Managing Partner, RRE Ventures
Getting On The Road
|Our expert panel discussed how CFOs can be effective and successful at all stages of their company.|
Using an analogy of a car on a highway, the panel first addressed how CFOs can be the most effective when in start-up mode. While first agreeing that they’re not driving an extravagant car, the panel agreed that a successful CFO has planned the trip well in advance, has marked the milestones, scoped out alternative routes and provides accurate progress reports on the journey.
They also offered this advice:
- CFOs must think like owners of a company, and are the people who help others think about their business better.
- Every dollar prolongs the trip, so be sure to monitor cash flow and practice effective cash management strategies.The CFO is also the one person that the CEO relies on implicitly to understand how the business works, keep them abreast of what’s happening, and to manage surprises as they come.
- While technical skills are important, it’s critical at this stage that CFOs hone their ability to build relationships at all levels of a company. Effective CFOs must be able to communicate with their investors, their board members, their CEO, executive team and employees, and be able to leverage these relationships to help propel the business forward.
- There’s no time like the present to build the infrastructure. Effective CFOs ensure that the systems and processes in place map to the strategic vision of the company, and can scale rapidly to meet the growth that’s coming down the road.
- In this stage, it is critical that CFOs effectively manage pushback, whether from their board, their internal teams or the marketplace, and drive the company forward along its strategic vision.
The panel also stressed the importance of building and leveraging external peer networks to offer advice, ideas and solutions to their challenges. As one panelist stated: “Rely on your CFO network. You’re not the only one who has ever gone through these things, and you certainly won’t be the last. My best CFOs always have a pool of other CFOs that they reach out to when trying to solve problems.”
The Middle Lane
|A full house at The CFO RoundTable NYC’s first program of the year!|
Switching gears, our panel then discussed how CFOs can be effective and successful when managing rapid growth in their company. The offered this advice:
- The best CFOs are the ones who don’t think about their own agenda first – they are strategic, and the success of the company comes before their own interests.
- Further, when it comes to handling a CEO or a board member with an agenda, the panel stressed that effective CFOs must never compromise their integrity or their good judgement.
- When bad things happen (and they will), the CFOs are the ones who must be ‘the rock’ of the organization. Being transparent, acting with integrity and clearly communicating what’s happening goes a long way to ensure that times of crisis and stress are effectively managed.
- In this stage of a company, effective CFOs are also adept at recruiting highly-skilled teams that can support the growth of company, which enables the CFO to remain strategic. One panelist stated that “the wrong people just consume so much energy.” It is absolutely critical that a CFO have an amazing finance team underneath them to support the business, as the CFO will be pulled away to other strategic initiatives, such as managing global growth, exit transactions, or more.
- It’s also important that CFOs are able to communicate financial data to non-financial people, while also clearly understanding the key drivers and motivations behind all of their departments.
The panel agreed that the most effective CFOs are also skilled at helping their teams accept brutal facts, especially if it threatens the health of the company. One panelist offered this example: “Many of my CFOs have saved the day too many times to count. In one of my businesses, we were on the verge of launching a product, but the microeconomics made no sense. It was the CFO who convinced us to wait to launch, and while our investors weren’t pleased, it was ultimately the right thing to do.”
The Exit Lane
Moving on to the next lane, the panel then discussed how CFOs can best help their companies navigate toward a successful exit, offering this advice:
- Success in this stage of a company always comes back to the chemistry between the CEO and CFO. Good CFOs help to make their story crisp, and is able to play off of and back up their CEO on roadshows.
- CFOs can either make or ruin their careers just by putting their own interests aside. It’s a tricky role to play as the CFOs job could be in jeopardy after an acquisition or a merger, but their job is to ensure the best for their company, not themselves.
- Exits are no place to have a learning curve. If you don’t have the experience, be proactive and pull in trusted resources, such as a board member or a consultant, that have been through your particular type of transaction in the past.
In the particular case of an IPO exit, the panel agreed that the role of the CFO does change considerably from that of a venture-backed company. In this stage, a CFO is focused on building trust and relationships with analysts, and spends the majority of their time managing their expectations and keeping them abreast of developments. One panelist offered that “A successful public company CFO is one whose phone is always ringing with analyst calls.”
Ultimately, the panel agreed that the most effective and successful CFOs are those that build consensus, anticipate change and manage surprises. They are problem solvers with an innate desire to learn, who understand clearly how their business works and what initiatives are needed to help propel it forward in line with the strategic vision. Effective CFOs are those who build and nurture productive relationships both inside and outside of their company, act with integrity and transparency, and put their own agendas aside for the better good of their company.
To learn more about this program, or to check out The CFO RoundTable NYC’s upcoming schedule of events, please go here.
For those readers who are located in the NYC area, we’re happy to announce that membership for The CFO RoundTable NYC is now open! Please go here to learn more about how we can help you connect, engage with and learn from your peers.