There are 3 paths to become a CFO: on-the-job training, apprenticeship, or coaching.
One way to develop financial leadership is through on-the-job training. There’s no doubt that real-world experience is one of the best teachers around. The trouble with this approach is that you can’t always be assured you are being exposed to the skills you need over a reasonable time horizon to put these new skills to use – it’s a function of time and quality.
In short, this method is best for those of us who have 20 years or so to spend in a dynamic and challenging environment.
From the emergence of the craft guilds in medieval Europe to the development of vocational and technical schools, apprenticeship has long been an avenue for those seeking to learn a trade and develop their skills. Working under the tutelage of a seasoned CFO is most certainly an efficient and effective way to develop financial leadership.
The issue today’s financial professionals face, particularly those in the middle market, is that companies are becoming increasingly flatter. Consequently, mentors within the company are harder to find. If you’re lucky enough to have such an individual to learn from, count your blessings and keep your eyes and ears open.
Coaching is the modern form of apprenticeship. It combines the best features of on-the-job training and apprenticeship by providing access to the experience of a seasoned professional over a shorter time horizon. Coaching can take on many forms.
It can look like a one-on-one experience much like the apprenticeships of old to a group setting where individuals have access not only to the expertise of the coach, but also to the experience of the other participants.
However, whichever path you take, the trainer, the master or the coach needs to help you make what we call the paradigm shift.
A paradigm is a basic way of perceiving, thinking, valuing, and doing that is associated with a particular vision of reality. It’s a set of rules and/or boundaries that tells you there is a game, what it is, and how to play is successfully. Success is measured by your ability to solve problems from the trivial to the profound.
Ever heard someone say, “that’s just the way we do things”? That’s a paradigm.
But we need to make a shift….
From Accounting to Financial Leadership
The CFO position has historically focused just on the accounting and finance side of a business; however, your true responsibility is over the entire business underneath the CEO.Learn How You Can Make the Paradigm Shirt
Why are we so focused on financial leadership? It’s because there is a big difference between accounting and financial leadership. Accounting is all about the numbers – reports, financial records, analysis, etc. But a financial leader takes those numbers and uses them to direct the company’s path. The financial leader of a company is like a wingman. They guide the CEO and leadership team to increase efficiency, determine opportunities, and ultimately improve profits and cash flow. They put strategy in accounting.
In our Financial Leadership Workshop, we take individuals with accounting backgrounds to get to the financial leader level.Learn More
But there 1 thing that is keeping you between a rock and hard place… The life cycle of a CFO. What is the life cycle of a CFO? And why do you need to beat it?
As a company grows and develops, the CFO needs to grow as well as the company’s needs keep changing. A $10-million dollar company requires different skills to operate than a $40-million company. As a result, the life cycle of a CFO emerges.
As a company grows, they postpone hiring a CFO because that role is seen as overhead. When the company finally makes the decision to hire a CFO, the life cycle begins.
The first year of a CFO’s job is consumed with “cleaning up” the financial records of the company.
After having successfully whipped the financials into shape, the CFO looks to the entrepreneur for new challenges. The CEO, not wanting to lose the new team member, assigns the CFO new jobs duties in order to keep him/her challenged. At this point, the CFO is given IT, HR, legal and other responsibilities. In essence, becoming the “Chief Administration Officer”.
The third year the CFO wants a raise or new challenges.
Unfortunately, the job is only worth so much or something happens to the economy and the CFO leaves.
In order for a CFO to have a successful tenure with the company, he needs to be provided with the appropriate situation to succeed. A CFO should be hired before there is a problem. Once he is hired, he needs the proper support. A CFO should always be supported by the CEO as he is also one of the top leaders in the company and he should be influential in the company’s big decisions. The company should always maintain him busy and challenged, as CFOs like to grow.
Failure to do this will mean that the CFO will most likely decide to leave in order to pursue personal growth or new opportunities.
You start by making a change. Change the course of your path by attending our Financial Leadership Workshop. This program was developed by CFOs for CFOs who are finding themselves straying the right path. If you want to learn more about our Financial Leadership Workshop, click here.