The secret successful CEOs know
Many CEO’s and small/medium business owners do not have a Board of Advisors or Board of Directors to help hold them accountable and direct the business towards the ultimate goal of monetization with an exit strategy.
If the business cannot afford a full time CFO, a part time CFO with a broad based business experience can be that “Trusted Advisor.” Ideally, the CFO who is the “Trusted Advisor” not only has financial experience but operating experience to provide global insight to issues facing the business.
The Value Add
The CFO who becomes the “Trusted Advisor” to the CEO delivers results-driven, professional counsel and solutions for complex situations. The key benefits for the CEO and the organization having a “Trusted Advisor” include:
• The CEO can think and act like an entrepreneur, focusing on business growth and customers.
• A “Trusted Advisor” who is an accomplished financial/operational executive quickly understands the key issues and can support the CEO, providing alternatives and recommendations to complex problems as part of the decision making process.
• Allows the CEO to think strategically, but provides the additional bandwidth to implement effective tactics.
• Drives the CEO and the business to plan for the long term building annual business plans and three year strategic plans.
• Provides a higher level of analytical support relating the results from operations to the financial statements and explains the variances to budget and the prior year.
• Helps identify key company initiatives on which to focus and in what priority sequence.
• Prepares the CEO and the business for an ultimate exit strategy to monetize the investment
• Provides an external challenge to the CEO’s decision-making process, the Trusted Advisor doesn’t tell the CEO what they want to hear, but tells them what they need to hear.
• Ensures all perspectives are considered in the decision making process to arrive at the best decision for the business.
• Execute decisions – most businesses in crisis have the common problem of either not making decision on a timely basis or making the wrong decisions.
• Develop and implement operational plans based on the strategy developed in the business plan
• Uses prior broad based industry experience to ensure the marketing, sales, engineering, manufacturing, logistics and human resources are executing according to best practices.
• Provides treasury and capital market support to secure funding alternatives and interfaces with the lenders regarding the performance of the business
• The “Trusted Advisor” becomes the coach, mentor and key confidant of the CEO and the one person the CEO relies on the most for unbiased, straightforward communication.
The Key Benefits of the “Trusted Advisor”
• Sustainability – Business answers from an experienced “Trusted Advisor” provides unbiased, on-target, and unencumbered feedback.
• Accountability – The more accountability the CEO and the business have the better everyone will perform. Without accountability, goals will be missed instead of made. The “Trusted Advisor” provides accountability, measurement, and metrics from the CEO down to ensure goals are more than just wish lists!
• Focus – The CEO gets to focus on the most urgent and important things, so the company produces the results it seeks in its business and strategic plans.
• Trust – The “Trusted Advisor” has developed a relationship of trust with the CEO by demonstrating, credibility, reliability, respect, business acumen and transparency.
• Communication – The CEO and the “Trusted Advisor” communicate frequently and openly about all issues impacting the business, with the “Trusted Advisor” providing a safe sounding board for the CEO.
• Networking – The “Trusted Advisor” typically has a network of business contacts that expands the CEO’s network and provides the business greater reach in the business community.
• Succession Planning – Together the CEO and “Trusted Advisor” develop succession and contingency plans to secure the enterprise value of the company and increase its ultimate worth at exit.
CEO’s and owners of small/medium business should have a “Trusted Advisor” with financial and operational experience to supplement their skills and experience. The inclusion of a “Trusted Advisor” to the leadership team enhances the overall capability of the business and is a key component towards the future success of the business.
This check and balance with a “Trusted Advisor” who is the key partner to the CEO is a common tread that surfaces when examining successful CEO’s.