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Controller of a large company or CFO of a small?

controller at a large company or cfo at a smallI am currently the Corporate Controller of a medium sized, privately held company with revenues upward of  $140M. I have been approached to be the CFO at a smaller company with revenues of about $50M. Both companies are well known in my State.

I am curious if this would be a good career move to break into the CFO slot and work my way up to be a CFO at larger companies or if the size of the smaller company will negate any benefit of a career move.

Answers

Rex Jackson
Title: EVP and Chief Financial Officer
Company: JDS Uniphase
(EVP and Chief Financial Officer, JDS Uniphase) |

Assuming you like the industry/culture/people at both companies comparably (these are big items with me just in terms of work satisfaction), I think you should take the top slot at the smaller company. If the smaller company was $10-20M in revenue, I would think differently, but $50M is a real company, and despite the greater difference in revenue, has more in common with the $140M company than a $10-20M.

Interesting question: would you take the CFO slot in your current company if offered? If so, assuming you like the business prospects of the smaller company, I'd take the leap.

The hardest part is getting into the chair the first time. Once you've proven yourself at the $50M company, you can definitely go from there.

Good luck.

Anonymous
(Director of Finance and Accounting) |

Thanks for the response Rex, I would definitely slot into the CFO position at my current company if offered, and the CFO has told me I have the skills to do his job but like you mentioned getting the opportunity from a company to take a risk on seems to be the challenging part.

scott graves
Title: CFO
Company: Armstrong Teasdale LLC
(CFO, Armstrong Teasdale LLC) |

Dear Anonymous,
You really have to look into the skillsets required and figure out (1) if you have the correct skillsets to be a CFO and (2) whether you'd like performing those tasks. The Controllers job is much more tactical and task oriented while the CFO job (should be) much more strategic in nature: the daily, weekly and monthly activities are vastly different (not better or worse, but different). Additionally, as CFO, you should be much more responsible for delivering the financial results of the company (possibly solely responsible). Having that responsibility requires holistic knowledge of the business and of all activities that are happening within the business. That responsibility also comes with much more stress. As Rex noted earlier, it’s about finding what you'll be happy doing...both jobs are good jobs, but they are very different in nature. Ask many questions about the CFO position and do a lot of soul searching.

Patricia Hickey
Title: Chief Financial Officer
Company: CCS
(Chief Financial Officer, CCS) |

Dear Anonymous,

In addition to the good points the other brought up, you need to understand what support staff you will have. Will you be doing the role of the CFO as well as the assistant controller? Whereas I find it easier to learn the top role by knowing exactly what those who report to me do, you also don't want to be so bogged down in journal entries and payables that you can't successfully fill that position.

Topic Expert
Cindy Kraft
Title: CFO Coach
Company: Executive Essentials
(CFO Coach, Executive Essentials) |

If your longer-term goal is to be a CFO of a larger company, Anonymous, then ... assuming fit on both sides of the table ... it could indeed be a very good move.

As Rex said, it is difficult (but not impossible) to get the CFO role if you haven't held the CFO title. This position could be great training ground for your first CFO gig and, with a few successes under your belt, propel you to the next level in terms of broader scope of responsibilities with a larger company.

Don't consider the title in isolation though, there are too many other risks and land mines that occur in choosing a company that isn't a good fit culturally or that is in alignment with your value system. I've seen many a catastrophe occur when I candidate violated their values for the sake of a better position, at least appearing to be better on the surface.

All the best!

Nicole Lucarelli
Title: Director
Company: Financial Services
LinkedIn Profile
(Director, Financial Services) |

I would also consider that the CFO in a smaller company will have more broad and tactical responsibilities than if it were a larger company. Small companies tend to have fewer people who are less specialized, even at more senior levels. So again, this is about fit and comfort in the skills needed for this particular role.

Anonymous
(President) |

I agree 100% with the advice of Mr. Graves. As for Mr. Jackson's comments about a $50M company being a "real" company, implying a smaller company is not "real", I have been CFO of companies ranging from $25M to $150M, and revenue is not the indicator of "real". I am currently CFO of a $25M company that is more complex and complicated than the $150M company was. What is important is what your responsibilities are and if you find the position rewarding and satisfying. I wouldn't let revenue size govern your decision.

Topic Expert
Brenda Goudey
Title: CFO/VP of Finance
Company: KDR Designer Showrooms
(CFO/VP of Finance, KDR Designer Showrooms) |

I agree with Nicole in that the position may have broader responsibilities since it is a smaller company, but that can provide for an excellent learning experience for someone new to the position. For the sake full disclosure, I am the CFO at a company in the $10-20M range that is working hard at growing into the 'real' company range and it's a lot of fun to be a part of it.

Phyllis Proffer
Title: Owner, Investor Relations Counselor
Company: The Heights Company, LLC
(Owner, Investor Relations Counselor, The Heights Company, LLC) |

This is a great discussion, covering several different perspectives. I would like to add a third based on my experience. There is a stronger bond between the CEO and CFO than any other executive position in the C-Suite. Are there discernible differences between the two CEOs with whom you will be working? It sounds like you are ready to expand your responsibilities, and now, it is a matter of choosing the right opportunity.

Topic Expert
Brenda Goudey
Title: CFO/VP of Finance
Company: KDR Designer Showrooms
(CFO/VP of Finance, KDR Designer Showrooms) |

Excellent point, Phyllis.

Anonymous
(VP - FInancial Planning and Analysis) |

I have worked for a Fortune 500 company, a midsize and a smaller company. I think there are big advantages to working in a small company at any point in ones' career. I would not consider it a negative because there are lots of upsides.

Topic Expert
Christie Jahn
Title: CFO
Company: Prime Investments & Development
(CFO, Prime Investments & Development) |

Brenda, excellent point. When you get the opportunity to work for a smaller company you get a lot of hands on in the trenches kind of experience; as well as if the company is in growth stage; you are there to help shape the culture and add your input and advice at all levels as process change and new people are on boarded. I too have worked for large companies and find smaller ones way more rewarding. Phyllis also spot on! As the CFO, you're CEO is going to be your new best friend; make sure you can work together!

Topic Expert
Regis Quirin
Title: Director of Finance
Company: Gibney Anthony & Flaherty LLP
LinkedIn Profile
(Director of Finance, Gibney Anthony & Flaherty LLP) |

It really comes down to what you wish, as every one is essentially touching that point. Forget the title, as it is extremely misleading. I have been the CFO of a start-up and worked very closely with some CFO's of Fortune 100 companies. Their titles may be the same but the day-to-day nuts and bolts of what they do and what they know are night and day different. Always start with what you like to do. If you obtain the title, but all you are doing is speaking to investors and VC's, which you may not like, what have you gained? Personally I thrive within the small and medium size company space for all of the reasons Christie identified.

Elaine Sivey
Title: controller
Company: rainier investment management inc
(controller, rainier investment management inc) |

Make sure to evaluate the controller you would be working with. You want a strong controller, or you'll wind up performing the role of controller with the title of CFO.

Anonymous
(Consultant) |

hmmmm... Culture, Culture, Culture!
I have been a CFO at a >50m+ < 100M. And as a interim CFO, I have worked in numerous others. At a smaller company, having controller skills is definitely a plus. However, the real challenge of the CFO position at a smaller company is the relationship of CFO with the CEO and the company culture. Does the CEO approach the company as a 'real company' or as an extension of his ego? How about the employees? Will the discipline you bring be embraced or will you need to be flexible? Why is the last CFO leaving? How long has the controller been on the job? Have you interviewed with the controller? Will they stay? do you want them, too? What is the relationship with the CEO and the controller? If theirs is a difficult one, yours most likely will too! If they have never had a CFO before, then the CEO doesn't know what it means to be a CFO at that company (even if he has worked with a CFO before) - because culture matters. Danger, Will Robinson! Get a contract with a severance package before you start.

I have had to transition the CFO 3 times for one client, before, I transitioned them out of one -permanently. They were <>$60M but did not appreciate the value of a CFO. I have seen this at least 3 other clients in $50M - $70M. There is a reason why the average tenure for a CFO is 18 months. One further observation - This economy is a difficult one on CFO. When I transition CFO - I require my clients to allow me to provide full disclosure to the new CFO. Check out profit margins before signing on. What does the CEO believe are the 3 biggest threats to the company's success? You only want to work with a CEO who will provide full disclosure.

At numerous other clients in this revenue range ($50M - $70M), the CFO position can be stressful and un-appreciated. It all depends on the CEO and company culture.

Topic Expert
Joan Varrone
Title: CFO
Company: Cloud Cruiser
LinkedIn Profile
(CFO, Cloud Cruiser) |

These were all great comments; I would lead to CFO of the smaller company as it is in hand and it will give you a broader opportunity than at a larger company. However, I think the most important aspect to focus on is the company culture, the management style of the CEO, the strength of the management team and your ability to forge a relationship with the CEO. If the team is not strong and if the management style of the CEO is dysfunctional, it does not matter what the size of the company is as these "soft items" will determine not only the success of the company but your satisfaction level with the job.

Kim Hall
Title: Consultant
Company: HWG, Inc.
(Consultant, HWG, Inc.) |

Good luck, Anonymous. I am sure that you will be successful in whichever path you choose. The mere fact that you have taken the time to ask a good question is proof of that.

Well said, Joan. It is all about the Culture of the company. And the head of company culture - the CEO! A clear understanding of why the transition is occurring is the one of keys to understanding the company culture and the CEO.

Controllers usually have one level between them and the CEO. However, the CFO has to be able to work closely with the CEO and the board.

Topic Expert
Edward Abbati
Title: Vice President of Finance
Company: Location Labs
LinkedIn Profile
(Vice President of Finance, Location Labs) |

About 12 years ago, I had the same decision to make and I decided to go the CFO route and never regretted it. For me, I have been able to expand my career beyond just being the "numbers guy", in the smaller company I have been involved in Business Development, Legal and Sales. While I don't have all the great perks of the bigger companies, I do enjoy being more involved in the business and not having to wear a suit anymore.

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