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A High-Value CFO is...
Posted by Cindy Kraft (CFO Coach), Mar 12, 2010, 13:31 PM (view user's blog)
Last April when I did the keynote at the Prophix User conference, I said this ...
Today, the trend is towards Operational CFOs who hold an MBA and bring a broader education & finance perspective, along with a strong ability to synthesize information. CEOs and Boards will demand their Chief Financial Officers possess broader-based skills as they seek business strategists and leaders in filling that role.
At the CFO Rising conference on Wednesday, the panel of finance recruiters had this to say ...
--At Fortune 1000 companies the number of controller to CFOs is down by about 33%. Conversely, those finance executives who have general management experience, strong operational contributions, and a record of leading strategic initiatives are the most sought after in filling Chief Financial Officer roles today.
--The backward looking mindset of accounting and FP&A is now outdated and has become commoditized.
--Companies want PROspective mindsets from their CFOs. The game has moved beyond numbers. It requires a CFO to have a strong controller and finance team in place so he is free to focus on the big picture with the CEO.
--There is a trending convergence of the COO and CFO roles. (I think the CFO who brings a solid finance skill set plus operational experience is poised to win this every time).
--Today’s CFO requires much more than being the “finance police.” It requires passion, energy, vision, and the prove ability to move a company forward.
Cindy
Helping CFOs Package ... Position ... and Land!
Email: Cindy@CFO-Coach.com
Phone: 813-655-0658
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Comments
High Value CFO
Cindy,
I couldn't agree with you more about the CFO being more operational oriented and CPA focused. Unfortunately, most companies do not share this belief. So many of today's postings list CPA as a primary qualification for the CFO position. It has been very frustrating in the job search. Thanks for bringing this up.
High Value CFO
Steven, move away from playing the "posted position" game! It's a crapshoot and you would have better odds in Vegas.
A CPA designation doesn't take away from a candidate's operational experience, rather it tells a company he has a solid finance skill set in place in addition to operational experience.
0 out of 1 members found this useful
In reality, my discussions
In reality, my discussions have been with executive recruiters who claim their clients are the ones requiring the CPA qualifications. I was a CFO of $500 million operation in Argentina where we were subjected to numerous audits from taxing authorities as well as internal (BellSouth/Motorola) and quarterly/year-end. All of them had the same outcome...no significant findings on improper accounting or lack of internal controls. In fact, during my career, I have probably had to go through more audits than most US CFO's go through in a career. I am gaining traction with this argument with some recruiters who see the value of my experiences.
Thanks for the feedback!
High Value CFO
Whereas I do agree with some of your statements, I do disagree with the above. I have been a Controller, CFO and VP of Administration and Finance, titles in this industry are very cheap. Just because a person has an MBA/CPA DOES NOT mean they can handle the accounting functions of a company or run the financial aspects of a company. I have worked with CPAs, managed CPAs and so many of them MIGHT have an accounting skill set, however; they cannot mentor a staff or handle the accounting activities.
1 out of 1 members found this useful
Re: Steven Droll's concern over CPA requirements in job postings
Cindy, I think you missed the point of Stevens comment. His point, I think, was that companies still seem fixated on CPAs as a requirement for CFOs. For those of us with outstanding strategic, operational, and finacial leadership skills, but without CPAs, it is an uphill balttle. And monumentally frustrating. But candidates can't tell companies what they really need and don't need in their CFOs.
Mike Mason
Pendulum Swinging Both Ways...
Every couple of years or so there is some sort of blow up for public companies, with a corresponding but perhaps non proportional response by the SEC and the audit firms. Here in the valley audit committees are on point to mitigate risk, including audit risk as it pertains to equity accounting, impairment, rev rec and so on. Because of these types of risk, they believe that a CPA designation will help, forgetting of course that even the audit firms missed it. Now we're presented with the board's involvement in risk management and that someone on the executive team has to lead. Where do all fingers point to? The new risk edict from the SEC includes all of those items on the Entity Level Control Questionairre, including strategic and operational risk. Although no one wants to say it, the tendency is to find a way to "check the box." Here is where the CFO can really shine if she/he can convince the board and audit committee to have some leeway into doing a deep dive into the organization to determine the firm's cost of capital. Even doing something like this is extremely politically sensitive, but heck, no guts no glory right?
fsc
execfinancialservices [dot] com
High Value CFO
IMO, regardless of whether you have a CPA designation, a CFO is not necessarily an accountant. An accounting degree and CPA designation doesn't mean the CFO has the ability and experience to set at the leadership table and be a strategic, trusted adviser to the CEO. These attributes exist in a high value CFO regardless of their depth and breath in the science of accounting. That's why a high value CFO will have deep experts in accounting, tax, compliance, etc. working with them to fulfill the broad and deep financial and accounting needs of the company. My experience as a CFO is no individual will have every skill or experience required to do all the accounting work, be the department(s) leader and be an advisor to the CEO.
Take the IT department for example. The CIO doesn't write code, so why should the CFO do much if any accounting? Of course, convincing a prospective company of what the CFO's role should be versus what they believe it is, well, that can be an issue.
Sure, companies hire CIOs that write code and manage projects, but that's not really $150K CIO work.
And companies hire or promote people to CFO that does accounting, reporting, general ledger updates, payroll, purchasing, compliance, etc, but that's not really sustainable, $150K+ CFO work. It helps to know some level about most of that, and a smaller company will want to have as much depth and breadth for the money. I get that.
It boils down to the leadership qualities and the ability to add strategic decision making to the company to help them grow, help them see what the future looks like, and help them execute on the plans for future success. If a CPA designation helps with any of that, I'd sure like to know how.
If a CFO isn't doing those things, then they're not a high value CFO, just a number cruncher focused on the past.
3 out of 3 members found this useful
High Value CFO
I also see that many companies still fixate their attention on CPA designation. I believe, knowing that your CFO has a CPA designation, helps owners/CEOs "sleep better at night" on tax and accounting issues. I agree with many statements here that most of the companies would be better off with a CFO with operations experience and leadership skills. CPA designation is helpful but not necessary in my eyes. Technical accounting knowledge can always be outsourced and companies generally don't encounter many "highly technical" accounting issues on a daily basis. These issues tend to be one-off events and once processes are in place it's back to routine transactions. It is much harder to find a CFO with leadership and team building skills and the right chemistry for the company. A CFO with the right attitude and general accounting knowledge can always "read up" on the accounting issues du jour and be on top of his/her game. To me it's attitude, people skills, integrity - first, technical knowledge - second.
CPA CFOs
You're absolutely right, Mike. I didn't focus on the CPA aspect because I have a previous post about it ... and it generated a huge number of comments from non-CPA CFOs. And whether you (any job search candidate comprises that "you") and I believe it doesn't matter ... just doesn't matter. It is the company who believes it does matter, who is hiring, and who has made that a requirement.
That said, a strong network that moves a job seeker away from job boards and even recruiters will have a better chance of bypassing that requirement, because you have a contact who knows you, trusts you, and is willing to take a chance on you based on your strong value proposition and record of accomplishment. Not always, but sometimes.
Co-sign: non-CPA CFOs do need to have a stronger network
Cindy, this is spot on, and I understand your not wanting to duplicate discussions regarding the CPA/non-CPA issue, but you last paragraph was on point.
Non-CPA CFOs definately need to have a strong network in order to bypass the requirement, and will often have a better chance of being hired in so doing. But in any case, CPA or not, having a strong network, coupled with a strong value proposition and a record of accomplishment is a winning combination all around.
Thanks!
CFO
CFOs that have CPA backgrounds and have operational backgrounds would seem to be quite valuable, and everyone wants to work for a law-abiding, ethical organization. If the company is public and and as it gets bigger and bigger (Fortune 500), CFO at the corporate level demands a pretty large set of skills, some of which not everyone wants especially when competing with others with significantly more auditing experience. CFO at the $1B revenue line and under is more manageable, maybe higher revenue in the private company realm.
Network
Thanks Jason. And to take your point one step further ... networking should be a lifelong habit, not something that gets resurrected for a job search.
One other point I think is important. In all of my coaching sessions this week, each of my CFO clients told me they were seeing a big uptick in recruiter contacts. In almost every case, they were found on Linked In. It's crucial, as part of a solid search strategy, to have a compelling, complete profile on Linked In.