The new CFO's first 90 days are critical. What are the priorities?
Understand the company, the personalities, and the current business model. Don't look to hit any home runs. Without understanding the company from an insider perspective, you have a higher likelihood of making errors. But as a new CFO you are bound to walk in the door and find low hanging fruit, i.e. small quick changes where the benefits can easily be quantified. After day 180, you will be in a better position.
Here are two resources for you to check out in the meantime:
I agree with the suggestions of Regis Quirin and would also suggest understanding the details of the balance sheet. The balance sheet is often a place that will teach you much about what the company has done in the past and how those transactions have been accounted for. Often, this analysis will highlight weaknesses in the internal accounting processes. In addition, sometimes "bodies are buried" on the balance sheet. Understanding these "bodies," the business model and the personalities will help you plan a course of action for both company and personal success.
The very fact of being a new CFO implies a crisis of some sort that scalped the prior CFO. Finding that out becomes key. Interview employees - create a composite view of the required action plan. Assumes of course that basics go hand-in-hand, like 90 day rolling cash flow forecast, budgets, variance analyses.
Rely on your instincts more than you rely on advice offered in a book. Establish the relationships with those you report to, and use the time to build friendships with the operational leaders you will need to influence. The CFO position relies on your ability to influence. Build the competencies you need to influence. Leave the reporting responsibilities to your Controller and staff.
A new CFO should start the job already knowing about the company, the people, and the financials. And a new CFO should have a rough idea of the agenda for the first 90 days+ before Day 1 begins. However, that first 90 days is often best spent revising that agenda and intimately understanding the company, the people, and the financials. Sorting out what must be done now and what makes for good long-term strategy is the ultimate goal.
I will assume you are from an outside company.
People first. Quickly evaluate your direct reports and other critical players on your team. The initial assessment should determine if you need to recruit talent or start team building. You want to be careful not to offend or scare off the talent you want to keep. Conversely, you don't want to waste time team building with people that should not be on your team.
People second. Your relationships with the owners, CEO, division presidents, customers, vendors, etc. Get to know who the players are, how your company is viewed, and how the finance team is viewed.
People third. Get your family ready for the next six months including the amount of travel and hours you are expected to work.
Thank you Chris for pointing to my blog on the topic. (see link above)
One new CFO I spoke with in the last few week, when asked how things were at his new employer, said "I feel like I am drinking from the fire hose".
I like the visual. It gets a point across.
A few pointers to new CFOs.
1) Day 1 doesn't start when you walk in. Day 1 starts before you even accept the job offer.
2) You need to plan. And plan again. And change the plan as you learn things.
3) All companies are different. No matter your previous experience, this new one will not be the same like the last ones. Learn, ask questions, and don't forget to plan.
4) Understand what is expected of you, and plan to meet those expectations. CFOs fail (and get thrown off the bus) when they are not aware what is expected of them (and by when).
And as Valerie says, use your instincts. (And don't forget to plan).
1) Build relationships with your staff and learn about their strengths, weaknesses and what their biggest challenges are.
2) Develop relationships with the other senior managers.
3) Meet your bankers and lenders.
4) Learn who your key vendors and customers are.
5) Find out what the real financial status of the company is and how realistic their business plan is.
A new CFO’s priorities for their first 90 days should be getting their arms around the company’s operations, systems and procedures. In addition, they should focus on any pain points that were discussed in the interview process, as well as ones that may come to light after their arrival.
I would add in the execution of the recommendations that come out of your assessment, make sure you align the right resources to successfully operationalize the work. A functional or business leader's ability to assess their talent, re-organize them and establish the necessary bench strength to deliver results are key.
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