Posted 08.30.2010
Six key questions to ask before hiring a CFO: part 2
Do they have 25+ years of experience?
By Marty Koenig and Keith McAslan(Editor's note: This is the second of three parts. Read part 1.)
2. What questions should I ask a CFO to be sure he/she has the experience and personality traits to help me?
Ask them if they are a Strategist and Visionary. He/she must always think ahead. Reporting on the past is an important function he/she oversees, but his/her value will come from his foresight and ability to strategically guide the company as a whole, not as individual parts.
Ask them about their professional designations and education. A professional accounting designation is good, but not required for a superstar, senior executive CFO.
Having a graduate degree with 25+ years experience is key. An MBA with less than 25 years experience does not begin to cover the accounting, process and operating knowledge needed to steer a company's finances.
Ask them how hands on they are. The job of a small business CFO is very different from one at a big company. The latter is much more of a hands-off role focused on investor relations, deal making (financing, M & A), governance, reporting and other back office matters. In stark contrast, the small business CFO is much more hands-on and integrated into the day-to-day of the business.
You want a CFO who is not shy. The CFO is the CEO's most trusted advisor. If a CFO doesn't tell you he/she is planning to ask you tough questions that nobody else will, then you won't get the best experience and value.
A good CFO is good at asking questions that force those around him to think through and understand things they are about to undertake. A good CFO keeps asking questions until he/she gets his/her mind around the issue and fully understands it - and is confident that those around him/her fully understand it as well. The discipline to keep after it until initiatives and actions are understood and are sound is the hallmark of a good CFO. It takes much humility and tact to accomplish this, but organizations soon learn to completely think through things before they bring them to you.
Ask them about their technical and systems expertise. No, you don't want your CFO troubleshooting Windows on your desktop, but you do want someone who's sufficiently comfortable in information technology to take the lead in driving your information systems.
Ask them about their decision making. Your CFO will be a trusted advisor. Running a company can be lonely. Your CFO can be a key, objective source of advice and counsel as you make the big and the small decisions.
As you probably noticed, only one of these points (the 2nd one) actually deals with accounting. Despite their accounting experience, the best CFOs go far beyond this foundation. They are capable of adding value to every aspect of the business. Judge yours accordingly and make sure you have a high impact CFO.
3. How do you bill for your services?
There is no need to be afraid to talk with your CFO about how he/she bills for the work they will do with you. No one wants surprises!
Since the CFO is a trusted advisor, they will work with you to understand your exact needs and put together a no-surprises cost. This is accomplished by assessing your needs, understanding the current state of your business, performing a gap analysis, and agreeing on specific work that will benefit your company the most. Since these are advisory services, most often they are billed on a bi-weekly or monthly fee basis.
Sometimes a small business just needs an experienced CFO to help them with a strategic plan, business plan, financial projections, bank lending package or similar project that's typically charged a flat fee.
Marty Koenig is Founder and CEO of CxO To Go LLC. He loves what he does for a living, because he gets to work with so many great, world-changing people and help them succeed in their business. His team is dedicated to building financial, operational, strategic, technological excellence for small/mid size business owners. Marty has over 29 years of diversified experience in private and public companies, from startups and mid-size firms to multinational Fortune 30 companies including AT&T, General Electric, NCR Corporation and StorageTek.
Keith McAslan is a partner with CxO To Go, VP of CFO Services and member of our executive team. Keith is sought after to provide advisory services the trusted advisor to Owners and CEO's. By utilizing extensive experience as a successful financial and operational C-level executive, McAslan brings a results driven leadership style to complex situations. Keith's expertise includes: financial advisory; management consulting part time, interim & virtual CFO, COO and CEO; debt and equity financing; turnaround management; operational performance improvements; acquisition and divestiture advisory. Nominated for the Denver Business Journal CFO of the year
Readers Respond
25+ years of experience is "key" and anyone with less experience does "cover" the knowledge base to steer companies finances. You have to be roughly 25 to get a graduate degree and also have another 25 years of experience. Wow only 50 year old people can be CFOs. Heck our president is only 49. You guys are a joke! You remind me of the old adage "those who can't....teach."
By Ryan on 2010 09 01I truly appreciate this article. I was a hands on, small business CFO for a professional services company. Your narrative helps me understand my natural curiosity over a need to learn all facets of the business. Natural curiosity, as Marty is describing, provides great knowledge and creates a skill set that can be utilized in any corporate environment.
By John on 2010 08 30Leave a comment
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