How Your CFO Can Deliver Extraordinary Value!

Last Monday we talked about the value a great CFO can bring to your leadership team. Today, we share several questions that can help you determine if the person leading your finance group can help you grow your business’ value faster. These five questions can help you focus on the bigger picture of your growing business. Here are the key questions you should be asking your financial leader.

The first question I would ask my CFO is: How do you see our company growing over the next 12 months? Stronger CFOs are good at helping your leadership team decide the best way to grow the business. Do you plan to grow through M&A, organic growth, or adding markets to your business strategy? Most good CFOs have a good handle on what’s happening in their organizations. You should be able to count on them when it comes to providing you several potential options when looking a growing to the next level.

The second question I would ask my CFO is: What financial and operational constraints could limit our growth as a stage two business? Since many founding CEOs have a strong product or marketing background, it is critical to add essential financial and operational capabilities to their leadership team. I’ve found stronger CFOs complement the founder’s business development skills. These stronger CFOs have the ability to be positive during high growth stages of a business while remaining grounded.

The CFO should not only be able to provide you a different view on your challenges, but a great CFO can provide you ways of overcoming different challenges that your business faces. They can provide you with different tools to evaluate your team’s performance while building critical relationships with the financial community.

The third question I would ask my CFO is: What happens when things went wrong in their prior organizations? If your CFO tells you that they’ve had never problems in their organizations in the past, they are either lying or they’ve never worked in a high growth organization.  You want a CFO on your team who has proven experience in dealing with challenges quickly.  If you’re a smaller business, the CFO has a different set of challenges than those who work in Fortune 1000 organizations or their divisions. When talking with a prospective CFO, find out where their experience is before deciding if they are the right person.

Also, make sure that you can work well together. Both of you are critical to your organization’s success. There is nothing more harmful to an organization than two of their top officers constantly bickering over the small details. During the hiring process, confront the potential CFO to see how he or she advocates their position. You may not always love your CFO, but you have to respect their ability to help you reach your business’ objectives in a way that works for your culture. In my past, I was responsible for interviewing CFOs in organizations we were buying. I was not only looking for what they said about their business today, but how creative they were in helping us meet our growth goals longer term.

Since I have a sales and marketing background and they have a financial background, much of my interviews would focus on how they might help me steer our business better with their expertise. I would also be watching for how they might present their ideas to the board and investors. A great CFO can go a long way in helping you get your critical stakeholders on board for new initiatives.

The fourth question I would ask my CFO is: What might disrupt our current growth? Successful CFOs should have a great network of peers that can help them get a better view of what’s happening outside the company and inside the client’s industry. I’ve seen great CFOs play a critical role in business development by developing keys relationships with CFOs within the clients and their ecosystems.  I don’t expect my CFO to sell on my business development team, but they may need to be able share the financial facts with their peers in targeted clients.  Strong CFOs can provide you a significant edge in dealing with early adopter and larger clients.

Finally, strong CFOs must be able to advocate changes required to help build a healthy organization. A great question I like to ask a CFO is: Can you tell me a time when you had to change the way your team was doing business? I want a CFO who is courageous in dealing with others on the leadership team. They should have a good sense of what’s going on and how things might change to help take us to a new level.  For example, a hotspot might be sales compensation. The strong CFO must be able to show why we might need to change our compensation program to evolve with our product life cycles. Hunting might be handled differently than those who are selling into more stable, long term clients. A CFO’s creativity can go a long way to provide a win win-win solution to our sales organization.

I see the CFO as a critical role in the development of a long term successful organization. CFOs bring different strengths and capabilities to your growing organization. After today, I hope you have several ideas on what a strong CFO can do for your organization. Now that you know what to expect from your CFO, tomorrow we start a series of blogs on Developing Serving Leaders that focus on your corporate board and advisory teams. See you tomorrow.