By Rich Bond
What is the best investment a new CFO can make after he or she is promoted or hired?
The expected tenure of a new CFO is getting shorter as time goes on. Depending on whom you talk to, CFOs are expected to stay in their jobs for three to five years on average.
CFOs are responsible for many things they don’t directly control like the performance of their company. That means a CFO could do many good things but still lose their job if the company underperforms.
According to the Deloitte CFO Academy, the description of what a CFO is responsible for is much broader today than it has ever been.
Approximately 10 years ago the primary CFO responsibilities were reporting and control. Today, it is much more important for the CFO to help foster innovation and provide strategic input to the management team.
If you’re a CFO who came up through the Controller or Treasury ranks, how can you adjust to handling such broad functions?
My suggestion is to hire good people who are knowledgeable and accomplished in the areas you are not.
Here is an example I was involved in:
- The newly hired CFO of a private equity-owned market research company was told that the owners were expecting the company to move from their project-based business to a subscription business model ASAP.
- The CFO, who had primarily worked in technology, hired us to recruit a finance person with a complementary background to help him. The person we placed had significant experience in successfully working with marketing and salespeople to transform the way they did business.
- Result was that the company increased its subscription business from 10% to 50% in about 18 months. It was a company-wide success, but the financial leadership was critical.
The new CFO was lucky, he had a specified objective to meet. Most new CFOs are not that fortunate.
I would be happy to talk to you to hear about your company and how making one or more strategic financial hires could increase your longevity in the job.
Don’t let yourself be a sitting duck. Hire quickly and creatively because after a year in your job, you will “own” your staff and have a hard time making changes. The time to move is now!
