By Allan Tepper, Co-founder and Senior Managing Partner, CFO Consulting Partners LLC
January 27, 2011
CFO Consulting Partners is often retained to “fix” broken Accounting and Finance functions. I am often asked what critical elements, or success factors, are needed for the CFO to be successful. If the CFO does not do lots of things right, then his or her job may be at risk. I believe being a CFO is one of the most important, and yet one of the most short-lived jobs in corporate America. Articles I have read list the average tenure for a CFO at just 3 to 5 years. This turnover is due to many reasons – sale of company, new CEO wants his own CFO, CFO leaves for a better opportunity, bankruptcy, etc. But at least some of the reasons for turnover relate to how the CFO is perceived by the CEO and by the peers of the CFO.
To help the CFO evaluate his or her chances of long-term success, I have developed the following ten questions. While there are no guarantees, a good number of YES answers may be an indication of longevity with one’s present company. Alternatively, these questions could be viewed as a roadmap to success. These questions are addressed directly to the CFO. A note of caution – To get a meaningful result, be really truthful when answering.
1. Are you an active and respected member of your Senior Management Team?
2. Can you and do you talk frequently and fluently to the senior management team about the key drivers of your business (i.e. volumes, ratios, pricing, and so forth), and about the external variables affecting the business (i.e. about the economy, and the industry trends, the competitors, the risks and so forth)?
3. Is your department adequately staffed with high quality people, and is the staff viewed as efficient and internally client driven?
4. When you report bad news, are you criticized? Another side of the same question is, Have you put practices in place to identify and mitigate risks, so that when bad news happens, it is a reported as one of the identified risks that went south?”
5. Is your day-to-day department well managed? A corollary to this is, Do you provide your services quickly and in a quality manner? Another, Is your own office neat and well organized? Yet another, Do you consistently work more than 10 hour days?
6. Do you feel like more like a guiding light to growth and profitability than a policeman in your company?
7. Do you or your Senior Management Team ever lose track of the fact that internal and external customer satisfaction is Job Number 1?
8. Do you think your boss would say you think like a business person – growth, profitability, ROE, empowerment, motivation, a prudent amount of risk taking, etc.? A corollary would be, Would your boss say you strike the right balance between the big picture and the details?
9. Have you implemented a sound planning, budgeting and forecasting process? If so, do you have monthly or quarterly meetings with the profit center leaders to review results and identify risks?
10. Is your audit completed within three months after the end of your fiscal year?