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  • Pam Prior

Great CFO’s Build Bridges

Picture this: you have a family-owned company that’s been in business for 20 years. Cousin Jimmy has been keeping your books for you. He’s reliable, friendly, and he knows math.

You’re getting frustrated, however, because you can’t get the information from him that you need to grow your business.

Your bank asks you questions about your financial statements. When you go back to ask Jimmy, you notice that he gets defensive or says the bank doesn’t know what they’re talking about.

So you ask a consultant to discuss the issue with Jimmy, who becomes even more defensive. Of course, the last thing you want to do is hurt Jimmy’s feelings. He’s a great mathematician, friend, and cheerleader. But unfortunately, he’s not a bookkeeper or accountant.

Here’s another scenario: you have a new business, and an accountant friend is helping you with your books. He is not able, however, to explain them to you in a way that you can understand.

He is also defensive and brittle with the rest of your organization by demanding that expense reports are delivered in a certain way, at a certain time, and is always rejecting them. He’s built a bit of a kingdom, and the rest of your employees are a bit resentful of his behavior. When the financial reports finally reach your desk, they don’t make sense to you. On top of everything, your accountant friend of many years blames you and your employees when you ask questions about it.

So, what needs to happen next? In each of these scenarios, two conversations are necessary. One with you, the owner/entrepreneur who is being drastically under-served, and one with the employee (or service provider in question).

The First Conversation

If you are the business owner in this situation, you desperately need an outside, objective voice to remind you of the kind of financial lead both you and your organization deserve. A part-time, interim, or full-time CFO can fill this role.

Nine times out of ten, you’ll be so used to the level of service, that you have convinced yourself that it’s okay; or even worse, that it’s your fault. In this conversation with you, your outside voice needs to help you see the severity of the problem and why things should change. You need to be reminded that day in and day out, you are making decisions that affect the organization you love and care for; you and that organization deserve nothing but dedicated properly skilled support. AND – the financials are NOT the mystery that your current accounting team has convinced you they have to be.

The first conversation is someone objective, with extensive financial experience, helping you understand why it’s okay for you to have, or assign, the second conversation.

The Second Conversation

The second conversation is with the incumbent. This is where a great CFO, whether full-time, part-time, or interim clearly identifies all the skill sets the incumbent needs to have, and assesses whether he can perform the required tasks. The sensitivity with which your CFO performs the discovery process to gather the information she needs to complete this evaluation is critical to the success of this second conversation. She needs to develop relationships, listen, learn, and bring the experience to know the specifics of the required skill set Z (which varies significantly from a small company to a large, complex company.)

Properly done, she will separate personalities from skills, and deftly make a clear decision about the incumbent’s suitability for the role, and whether or not he can be trained up to meet expectations. If it’s not the right role for him, the reality is that he is very likely, unhappy in the role as well; he lacks confidence, is scared, and struggling to keep his act together. The good CFO will pick up on this, and can help refocus on getting him trained, educated, and comfortable, or helping you find the best alternate use for his talent.

Very many times in small business, if the incumbent is just given the tools and training he needs, expectations are clearly defined, and support and encouragement are provided, the defensiveness will dissolve. With the right tools and environment, he has a chance to gain confidence and exceed your expectations while thriving in a new concept of his value to the company.

What if Someone is in the Wrong Role?

What if, after a thorough and objective evaluation, your finance lead and you determine that the person is a cancer in the organization and/or doesn’t have the required skill set to deliver the accounting work that you require? It is time, then, to consider opportunities for redeployment in your organization. The CFO can help identify the skills that she has identified as his strengths, and with that insight, can help to identify where he can add the most value.

Bridging the Gap Between Accounting and Leadership

Priorities Group has often had to help to re-engage under-utilized accounting teams in organizations. Usually, a chasm has grown between the accounting function and the other key roles in the business – marketing, sales, and leadership. It’s unintentional, and generally a function of different languages without anyone to manage the translation. There has ALWAYS been an unbelievable pool of talent in the existing accounting team, but they haven’t had a strong leader at the executive table clearly tying their efforts and outputs to the company strategies. Sometimes the chasm expands until the leadership considers accounting nothing but a cost center, and as a result, a spiral of mutual disrespect is perpetuated.

The first thing we do when engaging with an organization in this state is work with the existing accounting team to develop a game plan with a goal of proving our worth to the organization. We instill, teach and demand progress towards a vision and blueprint for a Gold Standard finance function – be it one person or twenty. We go out together into the organization to learn how best to integrate and provide value, to find out what our peers and leaders have forgotten that they need from us. We develop expectations of each other, of our suppliers, and of ourselves. The energy that is generated from this approach is unbelievably powerful, and transformations have succeeded in as little as one to three months (depending on the organization’s size and complexity). This works with an owner and an outsourced bookkeeper. This works with a company of 1,000 employees and a 20-member finance team.

Navigating this all-to-familiar chasm is an art and a science. The outstanding CFO cheerleads, translates, cajoles, lays down the law, defines expectations, holds people accountable, AND HAS FUN – setting the behavioral example for the entire organization. What evolves, properly managed, is a bridge of credibility between the two opposite ends that no longer requires the CFO’s direct involvement to stand.

Did I mention that the outstanding CFO has fun? For the outstanding CFO – this bridging is the highest form of achievement. A self-sustaining organization, fully integrated, aligned, and transformed to meet and exceed the expectations of any CEO.

Author, Virtual CFO, and Finance Coach

"Your First CFO: The Accounting Cure for Small Business Owners" on AMAZON.

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