The following is excerpted from the first chapter of Samuel Dergel's book Guide to CFO Success: Leadership Strategies for Corporate Financial Professionals published by Wiley & Sons.
There are many accountants and few Chief Financial Officers (CF0s).The accounting track is a popular starting point for many of today's CFOs, but accounting is certainly not the only road to the CFO today.
Other popular starting points on the road to the CFO chair include investment banking and consulting.
Regardless of how they get there, CFOs' job descriptions depend a great deal on the companies they work for. A day in the life of a CFO at a large Fortune 500 company is most certainly different from that of a CFO at a small, entrepreneurial company. Yet they are both called the Chief Financial Officer.
In large companies, it is easy to define the difference between a CFO and a controller. At a smaller company, the most senior financial person may be called a CFO, but is he or she really the "chief financial officer"?
The title "chief financial officer" is well known in the business world. However, when you ask business people to define what a CFO is and what they do, they often find it difficult to describe.
What Is A Chief Financial Officer?
In preparing to write this book, I felt it important to define what a CFO is--and is not.
Most of the books I have seen targeting the chief financial officer are technical in nature and not leadership oriented. In these books, the definitions of the role of the CFO and the people who work for them read like a job description, defined by responsibilities and tasks performed by the CFO. I have found most of these definitions to be lacking. In my years of experience in executive search, I have seen that in reality, unlike the rigid descriptions provided in some texts, the tasks of chief financial officers will vary by company size, industry, and growth stages of their businesses.
To gain a perspective on what a CFO is, I asked my 87 CFO advisors two open-ended questions on this topic. My CFO advisors were a key resource for me in the creation of this book. Coming from different backgrounds, industries, company sizes, and growth stages, they shared opinions, points of view, and personal experiences, all with the goal of assisting their peers.
In Table ( Figure 1.1) "What Is and What Is Not a CFO" lists the most popular keywords my advisors used to respond to two questions.
My CFO advisors found that it was easier to define what a CFO is not than what a CFO is. In answer to the "not" question, most said CFOs were not accountants, bean counters, or number crunchers.
These words are essentially synonyms. My interpretation of what my CFO advisors were saying is, "Being CFO is not about being technical." I agree with them.
As I said previously, accounting is a popular way to begin the journey to becoming a chief financial officer. While I come across many people who have the title CFO, not all of them are real CFOs. Why is that? Because the job they do is mostly technical in nature.
Figure 1.1 What Is and What Is Not a CFO? What a CFO is NOT What a CFO IS Accountant Strategic Bean Counter Leader Number Cruncher Advisor So what defines a real CFO? My CFO advisors say that chief financial officers need to be stategists, leaders, and advisors.
CFO AS STRATEGIST
My interest isn't sports. My interest is business. I follow business like many people follow sports. As an executive search consultant, I like to know the teams, the players, the strategies, and the score. While a sports fan can talk about strategy, it is the head coach of a sports team who makes decisions and plans based on a strategy. She or he works with all internal leaders to identify and execute strategy.
CFOs act as strategists when they make business decisions and prepare plans of action based on their companies' strategies. A strategic CFO is also a key contributor to and participant in the development and redefining of a company's strategy.
CFOs may have many responsibilities as they perform their functions, but if they are not acting and planning strategically for their businesses, they may not be real CFOs.
CFO AS LEADER
We can all think back through our careers and remember those people we worked with who were true leaders. During our formative career years, these people set examples for those of us who wanted to become leaders in our field.
Leaders set the pace, inspire, and act as an example for others.
CFOs are not only perceived as leaders for the people who work under their authority in finance but for other executives in the company, as well. The chief financial officer may be a follower of the chief executive officer who leads their company, but a successful CFO is looked at by the CEO as a fellow leader within the company.
CFO AS ADVISOR
In my early days in recruitment, I helped a CFO hire a key person for his team. When it was time to make the person an offer, the CFO told me that one of the most important reasons this person should join his team was because he was able to offer the individual an opportunity to "add to the bag of tricks he will need as CFO."
CFOs have Solomon-like wisdom that comes from a combination of business smarts, experience gained from successes and failures, and an inherent understanding of the numerical logic that supports the making of sound business decisions combined with knowledge of profitable business operations.
The wisdom acquired by the CFO allows him or her to act as an advisor to the CEO and other executives in the business. CFOs who are considered advisors by other senior executives in the business and are sought out for their input and guidance in major business decisions are truly valued by the companies they work for.
Personal Attributes of a Successful CFO
You're reading this excerpt because you would like to know how you can become a (more) successful CFO. We defined what a CFO is not and what a CFO is. Successful CFOs also demonstrate the following personal attributes:
* A positive, can-do attitude.
* Respect for the people they work with.
* Egos that are firmly in check.
* Emphasis on maintaining excellent relationships.
* A deep desire to make a difference
* The desire to have fun.
A chief financial officer faces challenges every day. Having a positive, can-do attitude gives the CFO the strength to deal with these challenges while being a positive role model for the people the CFO works for and with.
One CFO recently told me that people look to him internally to stay positive and move forward. As the CFO is the one with the firmest grasp of an organization's financial situation, people look to the CFO for an...