About 2 weeks ago, I was approached for an interview about CFO involvement in strategic decision making by the CEO. After careful consideration, I informed the interviewer that my added value would be zero as I cannot recall one single example. This might relate to my business experience (eg, private rather than public companies, Automotive).
Another – very different – explanation might be found in the personalities of leaders, like CEOs. In 2014, TIME Magazine published a notorious article about the professions with the most and least psychopaths. The CEO role is the profession with the most psychopaths. Also see my 14 April 2015 blog: Power and Abuse. Sources: Forbes, Fortune, TIME.
I suggested the interviewer to focus on another topic: common pitfalls for CFO’s. By definition, pitfalls are unexpected issues. The CFO role has several expected challenges (eg, chemistry, politics, team skillsets). A CFO who is both high on IQ and EQ should be able to prevent those expected challenges from becoming additional pitfalls. A CFO who is high on IQ and low on EQ is likely to fail as the CFO role requires excellent social skills rather than technical skills.
The earliest pitfall is in the hiring process. Sometimes you just feel that something is weird or even wrong but you cannot figure out what it is. Many months later you may learn that your candidacy was not preferred or even opposed but that it happened anyway – for whatever reason. These situations are likely to cause lots of job stress without (ever) realising why. Frankly, you cannot win.
Another common pitfall is the situation in which the CEO performed the CFO tasks until your arrival. If you’re lucky, the CEO initiated the CFO search himself. If other stakeholders (eg, banks, supervisory board) insisted on creating a new CFO position then this will be the start of a rocky relationship between CEO and CFO. Losing his/her opportunity for tweaking the financial reporting to his/her liking, may cause the CEO to “massage” the CFO.
For several months, the CEO is likely to know more about the financials than the new CFO does. These months are a steep learning curve. Forget about impressing the CEO, just prevent making mistakes. Your investment in working hours is the only thing that may (not) impress the CEO.
Each company has projects that run over multiple financial reporting years, like new ERP systems, new (building) construction, new products, new services. Such projects are like slippery banana skins scattered over the company floor. Somebody will definitely ruin his/her career over it. The main problem for the CFO – or external/internal auditor – is to access the information that allows for project accounting. Such information is often hard to get when these projects run out of their 3 main dimensions: cost, deliverables and/or time.
Perhaps a final pitfall: ego. Do not expect gratitude for doing your CFO job. As often success in the back-office is only measured by its lack of failure. As the proverb says: success has many fathers while failure is often an orphan. Let your CEO flaunt with “his” success, he will usually reflect it in your bonus. If not, it’s time to make up your mind about his and your loyalty. This silver fox prefers young guns to assume new CFO roles. For me, it’s a long way back and I prefer keeping it that way.
Long Way Back (2015) by Young Gun Silver Fox
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Note: all markings (bold, italic, underlining) by LO unless stated otherwise.
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