Based on the CFO searches we have completed for our private company clients over the past year, we have observed one distinct attribute that separates superstar candidates from the larger pool: The best CFO candidates know how to add value to the business, the business owner, and the rest of the executive team.
So if as a CFO you want to work in an environment in which you are considered a member of the “inner circle,” viewed as a business partner to the other executive divisions, and compensated in the 75th percentile for your industry, the best way to get there is to add value.
In most of our CFO retained search engagements, we consider anywhere from 100 to 300 viable candidates. From this wide search, we usually identify 5-10 candidates who are able to easily demonstrate the meaningful value they brought to their previous companies.
Here are four questions to ask yourself to determine whether you would qualify for that short list of CFOs who are adding significant value to their companies:
Do I possess vast knowledge in all areas of the company, not just accounting or finance?
As a CFO, you must be able to interact with all areas of the company and truly understand how each of the parts fit together to create a cohesive working unit. The best private company CFOs can easily communicate financial data, concepts, and matters to non-financial people. But they can also go beyond the financial to recommend solutions for all areas of the business. Plus, they can lead relationships with the banking community, the audit team, insurance providers, and legal counsel.
Do I possess the ability to help lead our business triangle through healthy tension?
Every private company works hard to gain cohesion between sales, operations, and finance – the business triangle. Most of my group’s executive search engagements arise from an executive leader who is not functioning well within the healthy tension of this triangle.
When business owners consider ways to grow, they usually think about sales and operations first, from a revenue and customer satisfaction perspective. The CFO needs to be a strong voice in balancing the sales division’s top line sales goals with the operation division’s need to have enough product and inventory to meet demand. If the CFO is incapable of holding both sides accountable and commanding their respect, it could pose major problems for the business owner.
How does the business make money and how can I move up within the value chain?
Accounting begins with transactions that become data. CFOs and their teams then translate that data into reporting to communicate business performance to executives and owners. However, we see too many CFOs who capably convert the data and report the analysis, but leave the bigger and more impactful discussions to other executives.
The best CFOs are the ones who learn, know, and understand all areas of the business so they can lead meaningful discussions around the data and analysis in order to help drive the most strategic business decisions. For instance, the best construction company CFOs participate in the operational bidding processes. In manufacturing companies, they are involved in the purchase of capital equipment. In distribution businesses, they’re engaged in logistical discussions to maximize travel. Continually moving up the value chain will enhance your reputation as a strategic thinker and someone who is moving the business forward.
Am I a leader?
Remember that the CFO, by virtue of the title, is recognized as a leader within the company. But if the CFO does not act as a leader, they will not be perceived as such. As CFO, ask yourself:
- Do I constantly try to learn new skills that benefit the owner, the operations team, and sales?
- Am I consulted on every major business decision that the owner/CEO makes?
- Am I open to other team members’ ideas? Can I work to communicate and obtain buy-in?
- Am I capable of getting out of my office to be visible within the company? Can I build significant personal and professional relationships with the sales professionals and the operations team members?
- Am I spearheading any new company initiatives or leading internal teams?
- Am I mentoring my accounting department so my team understands how the financial data impacts the business? Am I teaching my team the importance of acting like a business partner to the other executive departments?
Continually evolving your skills in these areas will help you become a more valuable partner in driving the business forward, thus standing out as more than a CFO; you will be an invaluable asset to the business. A top-notch CFO is always looking for new ways to add value to the business, and challenges themselves and others to help the business grow. To become a superstar and stand out from the rest, begin by asking yourself: As a CFO, am I adding value right now?
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