Tag Archives | CEO

Why the CEO Needs to Like Their Financial Leader

When The Strategic CFO was first founded in 1999, there was a lot of disregard for financial leaders and CFOs. If accountants could do their job, there was no need for a CFO. At least, that’s what many CEOs have thought. But we have been writing, consulting, and coaching those in leadership roles to lead the company financially. Companies cannot simply rely on great salesmen or impeccable marketing campaigns. They need a real strategic financial leader. As the relationship between the Chief Executive Officer and the Chief Financial Officer has evolved, we have concluded that the CEO needs to like their financial leader and vice versa.

Why the CEO Needs to Like Their Financial Leader

These two roles have two different responsibilities in the company, but they also need each other desperately. They are the yin and yang to each other.  This is truly a partnership and without the chemistry, this is a dysfunctional relationship. The CEO has the vision and drive; whereas the CFO has the financial data that should back up what the CEO wants to do. Simply said, CEOs and financial leaders need each other.

CEO Needs to Like their Financial Leader

CEO and Financial Leaders Need Each Other

While we’ve been talking about how the CEO needs to like their financial leader, the financial leader also needs to like their CEO. We have seen that when the CEO and their financial leader (CFO, Controller, etc.) have a good relationship, transparency and confidence is increased. This is a critical part of a CEO/CFO partnership.

Russell Reynolds Associates surveyed more than 100 CFOs and found that, “82% of CFOs surveyed gave their CEO high marks for overall effectiveness. Further, the vast majority of CFOs said they trusted their CEOs. But there’s still plenty of room for improvement. Less than half of our respondents gave CEOs a high score when it came to their ability to coach and develop the CFO. And only 49% of CFOs surveyed said they had a “very strong” relationship with their CEOs, the highest relationship ranking in the survey’s 5-point scale.”

It’s a two way relationship. If the financial leader trusts the CEO’s vision, they will be more likely to support their decision. Conversely, if the financial leader does not trust the CEO, then they are less likely going to support them with the financial information they need to make a strategic decision. Likewise, a CEO is going to trust their financial leader if they try to find a solution to implementing a new strategy, campaign, vision. But they will be less likely to trust their financial leader if they are what we call a “CFnO.” In addition, the CFO must have the confidence and relationship to question the CEO and his conclusions without anyone getting their feelings hurt.

CEOs Need Financial & Strategic Direction

Our team has worked with plenty of entrepreneurs and entrepreneurial leaders over the course of our companies life. That being said, we have also seen how much the CEO needs financial and strategic direction. CEOs need to focus on the future of the company – the captain of the ship. They need to steer the ship to success. But they need someone to analyze the data, advise, and help them direct the ship forward. Furthermore, the CEO needs a wingman – a trusted advisor.

CEOs need a trusted advisor or wingman to guide them financially. Click here to access your free How to be a Wingman guide.

What a CEO Needs Most

The CEO needs to like their financial leader because they need someone to make their flight path clear. As a result, they need more of you (the financial leader) and a wingman to guide them.

They Need More of You

What do CEOs want from their CFOs? They need more of them. There is a misconception between what the CEO needs and what the CFO thinks they need. Check out the results of a recent KPMG survey below:

“In a worldwide survey of 549 chief executives by KPMG, 30% said their CFO doesn’t understand or assist them enough with the challenges they face in running the company. “One thing is clear: something has to change if CFOs are going to close the gap between the expectations of their CEOs and the reality on the ground,” KPMG said in its survey report, “The View from the Top.””

They need more of you, not your “no’s.” Start by providing your insight on how to make their ideas come to fruition. As the financial leader your job is not to be a road block, it to understand the operations and the financials and come up with solutions.  In addition, get involved and start collaborating with your CEO. This will both increase the amount of communication and help them with their challenges.

The CFO should be CEO’s wingman, but it’s often difficult to learn what they want and need. Learn how you can be the best wingman with our free guide

The CEO Needs a Wingman

What is a wingman? It’s a trusted advisor that guides the CEO through business challenges. One way to be a wingman is to stay current with the trends. For example, keep your CEO out of trouble.  Look at trends in your financial statements, your industry and the economy.  Know your ratios, working capital and debt covenants so your CEO does not have any ugly surprises.  A good wingman always has his CEO’s back. Click below to learn How to be a Wingman.

CEO Needs to Like their Financial Leader

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CEO Needs to Like their Financial Leader

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Become a Trusted Advisor to your CEO

Summer is quickly transitioning to fall as the weather gets cooler and millions of Americans get ready for football season. Fantasy teams are drafted. Lucky jerseys are dusted off. Schedules are cleared for Monday night football. The action is enticing and our minds focus on all the excitement outside of work. But many neglect to look where the real action is – your career. This fall is your opportunity to become a trusted advisor to your executive team. Get ready for some major movement and success in your career this season!

What is a Trusted Advisor?

A trusted advisor is someone who translates all the technical data into functional and applicable resources necessary for business leaders to make intelligent business decisions. But let’s break that down further… There are two major factors in this role: trust and advice.

Trust is the confidence and ability to rely on something or someone and know that it’s correct. A trusted advisor is dependable, accurate, and able to be emphatic to the position of the CEO. Why? Because as the face and leader of the company, a lot is on the line for them. Respect the weight of each decision they make for the company. By understanding them, you can build a trustworthy relationship.

Advice is a suggestion on how to act according to a situation. When someone takes an advisor role, they are not expecting whoever they are advising to transfer every piece of commentary into action. But rather, they are sometimes blinded and the advisor is helping lead them to a safe, reliable, stable path.

Your CEO wants you to be a trusted advisor or a wingman. But where do you start? Download our free “How to be a Wingman” guide to go beyond the initial steps required to be a trusted advisor.

Transitioning to a Trusted Advisor Role

You have gained the trust of your executive team and they willingly take your advice, but you need to take it one step further if you want to become a trusted advisor. As a financial leader, you cannot talk the talk without walking the walk. So that means you need to get up from behind your desk to see how the business runs and what it needs by talking to those who are involved in production, operations, and shipping. By being an “operational CFO“, you can more quickly gain the trusted advisor role.

Operational CFO

As the needs of your organization change, you need to change your role from a financial CFO to an operational CFO. That may seem a little contradictory, but let’s investigate. If someone asked you to put together a bookcase and provided all the pieces but no instructions, you could probably figure it out with some time. This is the financial CFO: they provide all the data and reports but no instructions on how to interpret them, what they mean, and how to use them to lead the company forward. But if you are given the resources along with instructions, guidance, and coaching, you would be able to build that bookcase in a matter of minutes.

How to Become a Trusted Advisor

There are three primary ways to acquire the insight required to become a trusted advisor or wingman to your CEO. Those include: on-the-job training, apprenticeship, or have a coach. The first option requires 20-25 years of experience, quality experience, and it must be the right experience. Because of the time and quality aspect, this is the most difficult path. For example, you may have 20 years of experience only to realize it is the wrong experience. The second option requires someone who will let you study underneath them; but this is also difficult because computerization and time demands limit the number of CFOs available to mentor. However, the last option is great and can be a quick path to becoming a trusted advisor, but you must find a good coach.

We have put together 5 easy steps that anyone can do to become a trusted advisor in their company.

become a trusted advisor

Ask Them About their Goals

Goals are a huge part of operating a business. Therefore, learn where your business owner, entrepreneur or CEO wants to take the company in 3-5 years. There are two purposes to this: 1) it enables you to help set the course to success and 2) it demonstrates your commitment to being the CEO’s wingman. You will be able to learn why that is the goal, what the plan is, and how you can help get there quicker.

become a trusted advisor

Build a Team

There are eleven men from the opposing team on the football field, then there is you. What are the chances that you can play both offense and defense and win against another team that is switching people in and out depending on their position? Probably 0 So how can you become a trusted advisor to your CEO without having a team to support you?

You are not able to execute the game plan alone. so you need to get others in the company on board. They don’t all need to come from the financial side of the business. Building relationships with other departments outside of finance makes you a more valuable and effective financial leader. This goes back to transitioning to an operational CFO.

become a trusted advisor

Have Their Blind Side

Do you like surprises? If you are a business owner, you most likely hate surprises. As the financial leader of your company, it’s your job to “peed around the corners” to protect the CEO. By having their blind side, you can enable the CEO to focus on executing their vision rather than fighting whatever is distracting them or worrying about things they may not see coming.

become a trusted advisor

Don’t Get Called For Holding  

CFOs often get a reputation for being the “CFnO” or no-man. While it is important to guard your CEO’s back as a trusted advisor, it is not wise to hold them back from doing their job. You will either get excluded from being part of the key strategic decisions or have your job seen as non-essential. You don’t want to get stuck in this situation.

Remember, there’s a find line between playing defense and being an obstacle for your CEO to avoid. Be aware of where that line is, and don’t cross it. Instead, try to enable them to safely take risks or suggest other options that are less damaging to the company.

become a trusted advisor

Keep Score

Teams don’t get to the College Football Playoffs or the Super Bowl based on the score of the last game they played, but instead get there based on what they did all season. Imagine the disaster where a team that only won one game in a season playing against a team who won every game! Keep score of your accomplishments. By keeping tab of what you have accomplished and what you are working on, it’s easier to put a dollar value to it and prove your value. Quantifying your contributions not only builds your confidence, but shows the value you have added in terms that the CEO can appreciate

Conclusion

Your CEO, whether they realize it or not, needs a trusted advisor or wingman. The captain of the team cannot do anything without other leaders. Be the trusted advisor your CEO needs. Download our free How to be a Wingman guide by clicking the link below. Take your career to the next level and step up into the trusted advisor role.

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The CFO Guide to Your CEO

Wouldn’t it be great if we had a guide for everything we do? A guide for marriage? A parenting guide? A guide to dealing with difficult times?  Or maybe a CFO guide to understanding your CEO?

cfo guideTypically, Chief Executive Officers (CEOs) come from an operational or sales background. Naturally, Chief Financial Officers (CFO) do not always see eye to eye with their CEO. But over the past 25 years, The Strategic CFO has been working with CFOs to not elevate their status within companies, but also to make them more useful to the CEO… And therefore, more valuable to the entire company.

What The CEO Wants to Know

Just like every person in a company looks at their own focus areas (finance, marketing, operations, etc.), the CEO needs to know specific things and can go without knowing other things. To improve the way the CEO sees and respects the CFO’s role and guidance, it is critical to know what they want, why they want it, and how to communicate with them effectively.

CFO Guide to Your CEO

The first step in our CFO guide is to understand how your CEO thinks.

1. Future, Not Past

The typical CEO is future oriented. What’s the next move? What are the company’s goals for this next quarter? The CEO acts as the visionary for the company – a pilot, a ship captain, a general. They look forward at the horizon, protecting the people behind them as they march forward. Therefore, instead of focusing on past records or past performance, make the future path clearer for the CEO. The future is more important than the past in the CEO’s role. But don’t neglect past performance’s value to the CEO. Past performance can help predict the future. Although the past is the past and nothing can be changed in the past, you can change the future and that’s what your CEO wants to know.

As the financial leader of your company, you may struggle with focusing on the future, as you have been trained for so long to justify and rationalize the past. One thing you should impress in your mind is that your CEO and other executives are laser-focused on the future. Use what you have recorded to display your vision of what lays ahead.

2. Know Your Numbers

One of the top things taught in business school is to know your numbers. What does “know your numbers” mean? Think about your unit economics. Go back to the basics. If your company sells 10,000 widgets at $1 in a month but your company is wanting to increase costs to $11,000, you should be able to immediately indicate that decision would not be wise as you will then be unprofitable.

Everyone in your company, especially the financial leader, needs to know the numbers of the company. Have the facts and data to support every claim, prediction, or forecast. If the CEO is relying on your financial expertise, you better be able to lead them forward financially. Know your numbers and how they impact your company in the short-term or long-term.

cfo guide3. Cash, Cash, Cash

Cash is king. To operate the company successfully, cash is absolutely critical. Whether you are paying down debt, keeping up with growth, or allowing for flexibility, you as the financial leader need to know exactly where you are with cash always.

What happens when you need more cash or when you want to improve cash flow in your company? It’s difficult to know where to start. But you don’t have to guess anymore… Download the 25 Ways to Improve Cash Flow to start increasing the amount of cash in your business today!

4. Impact, Not Progress

You are painting a picture… The CEO doesn’t need to know the type of paint, the kind of paint brush, or the size of the canvas. But they do need to know the big picture and how it’s going to look after it’s finished. They don’t have enough time in the day to know all the details about progress; however, they do want the big picture updates on the impact of what is happening.

Remember, progress is still important. The managerial level needs to know the progress of projects. When you meet your CEO, have the project’s progress in the back of your mind in the case the CEO wants to know anything more specific.

Try to summarize all outcomes and updates on milestones concisely. Their high-level thinking does not need to be clouded by minute details and the nitty gritty of day-to-day operations. Sometimes details are necessary for the CEO to know when deciding the future of the company; so in that case, don’t hesitate to expand on the details.

What does impact mean?

Impact is defined as the “measure of the tangible and intangible effects (consequences) of one thing’s or entity’s action or influence upon another” (Business Dictionary). Think about it this way… Whether you are the CEO, COO, CFO, Controller, manager, community leader, a parent etc., you are responsible for people. Your worry should not be focused on the past but on how your decisions will impact people in the future. The CEO is responsible for everyone underneath him or her so a decision that will change the future for their employees, partners, stockholders, family, etc. is a big deal. Adjust your mindset from past performance to future impact.

5. Understand the Big Picture

Unfortunately, your CEO does not have all day to listen to you. The quicker you understand why your CEO acts the way they do and what they need to run the company successfully, the better you will be able to perform in your role as a financial leader. Align your goals/decisions/recommendations with the visions and priorities of the company.

For example, cash is tight but you want to get a software program that will report more timely and accurately the things you need to do your job. If you approached the conversation by trying to convince the decision maker (i.e. CEO) by sharing all the features, you will most likely get a “no”. But if you understand the big picture, communicate how this investment will serve you better long term versus the current software. Hint: Show some numbers of how this solution will improve cash flow, profitability, productivity, time, and money.

Conclusion

You should be your CEO’s partner, wingman, guide, confidant. Know what your CEO wants, thinks, and needs. To get started on improving your relationship with your CEO and to improve cash flow, download the 25 Ways To Improve Cash Flow whitepaper for free. Find other ways to improve your cash flow within 24 hours.

cfo guide

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Can a CFO be a CEO?

dollar-544956_1920One question I get often is, can a CFO be a CEO?

After being in the business of working with CFOs for over 25 years, I’ve learned one thing… CFOs and CEOs under historical contexts do not understand each other. Because of that, it’s been my sole mission to transition the role of a CFO into a financial leader and thus a wingman to the CEO.

Can a CFO be a CEO? is a great question, but it’s difficult to answer whether or not a CFO can be a CEO without comparing the two roles.

CFO vs. CEO

Before we get into the differences, we want to explain that while we may draw broad conclusions about these roles, there are always outliers that defy the stereotypical role.

Over the past 25 years, I’ve come to a realization about financial leaders turning into executive leaders… A typical financial-minded person will sometimes have a harder time becoming a CEO because of the differences in the way they think.

Chief Financial Officer

A person in a financial leadership role, such as a CFO, often uses more of the left side of the brain. Biologically, these types of persons are logical thinkers, reasoners, and analysts. This all makes sense when you are sitting in a room full of financial-minded people!  The conversations and body language are different. The type of person best suited for a CFO position needs to have the ability to point out the problems and figure out a solution to fix them.

Some characteristics and skills that effective CFOs possess include:

  • Logical
  • Analytical
  • Improving Profits and Cash Flow
  • Finding the Problem and Fixing It

Chief Executive Officer

Cerebral_lobesWhile the CFO tends to use left side of the brain, the CEO often relies more on the right side of the brain where the imagination, creativity, and intuition centers lie.

The CEO’s role is to think outside the box, lead the company forward, and set an example. Some characteristics and skills that effective CEOs have include:

While the list above does not fully encompass the characteristics that a CEO needs, it highlights the difference in the role of a CEO from that of a CFO. It requires more people skills, communication skills, and creativity.

Creativity

Probably the most striking difference between CFOs and CEOs is their level of creativity.  Problem solving is crucial in either role; to solve problems, creativity is needed.

Rice_University_Athletic_Mark.svgI once took a class at Rice University about “Creativity.” The professor drew a stark comparison between Creativity and creativity by explaining that every person can be creative. Each person though has different views on what creative means.

Big-C

Big-C creativity can be easily spotted. They are the people that when given a problem to solve, they immediately start thinking of off-the-wall ideas to fix it. This form of creativity is needed for those in a position that requires a little bit of risk taking, pioneering, and creativity. A CEO, creative director, or President of a company should have the capability to draw from Big-C creativity pools.

Little-C

Conversely, Little-C creativity can be seen as someone trying to create something within the confines of 4 walls. It’s against the rules to walk outside those 4 walls, build onto them, and think outside the box. This type of creativity can still return some incredible ideas, but it can only go so far.

Sound familiar? If you’ve ever sat in a room full of accountants, the ideas thrown on the table are often limited due their view on what being creative means.

So what?

So often with clients, I find that the CFO often attributes financial woes to a slowdown in the market. When I come into a company to consult, I almost always find that there are greater issues than what’s being looking at. These issues can be found in other departments such as marketing or sales. Inventory could be backed up for some unknown reason. It is the CFO’s job to put on the hat of a Big-C creativity personality type so that they are able to dig to find the greater issue at hand.

The New Financial Leader

So how can a CFO become (or at least think like) a CEO?  By evolving from a financial person to a financial leader.

Look at what you can bring to the table. By having the ability to oversee and impact the financial side of the company, the CFO is better able to understand the financial implications of any decision made. Already, the CFO interacts with multiple departments, such as IT, risk management, HR, compliance, and administrative duties. This variety of work requires matured people skills, a little bit of risk taking, and strong decision making skills.

People Skills

Yes, we accountants have people skills.  Do you know the difference between an introverted accountant and an extroverted accountant? The extrovert looks at the other person’s shoes instead of his own. 🙂

Long gone is the age of just looking at the other person’s shoes and demanding results. The goal here is to demonstrate that you have people skills and that you aren’t just a numbers person. People skills are required to be a good CFO and a CEO. Step out of our your office or cubicle to start getting to know everyone you work with. Learn how someone on the other side of the office building is doing with anything.  It’s so important to start talking to all different kinds of people in order to get the bigger picture.  Everything that happens in a company winds up in accounting at some point, so get to know the players along the way.

Risk

CFOs and other financial-minded people are typically averse to risk. They want to know all the consequences of their decision before they make it, but that’s not realistic to expect.

You’re good at calculating, so transition into taking calculated risks.  How do you do this?  Start by going into the field to get experience from which to make decisions. If you know the nuts and bolts of how something works, then you’ll be more informed and more comfortable taking a risk that an idea will boom rather than bust.  As you get more comfortable taking calculated risks, your colleagues will see you as as the CFO rather than the CFnO.

Decision Making

Decision making is a crucial role in either the CFO or a CEO position. The real difference between the old financial person and the new financial leader is in making decisions that are not based solely on numbers. Try to key into some of the CEO’s Creativity and let yourself out of the box.

Great decisions are useless without communication. Recognize the importance of having emotional intelligence. Start off by setting an example through remaining positive during risky periods. Take complicated and intricate problems and narrow them down to a few key drivers. Facilitate open forums to discuss issues and decisions among team members. Actively listen to everyone you come in contact with.

Think Like an Owner

The first step towards becoming the new financial leader is to start thinking like an owner.  Owners are hyper-focused on making money.  You have the knowledge and ability to help them get to their goal.

Start with the basics.  Something as simple as documenting your company’s economics and making sure that everyone in the company understands them and uses them in day-to-day decision making moves you out of the role of CFnO and helps you take more calculated risks.

Knowing your economics is the foundation for risk-taking, decision making, and understanding your business. Need help  shaping your economics to result in profit?  Check out our free Know Your Economics guide by clicking here.

Know Your Economics (on blog)-2

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Can a CFO be a CEO

Take ownership in your company. Think like an owner as you sit in your financial position. This act of creating your own personal culture of accountability, purpose, and profit will increase your value to your company and help take you to the next level.

And to answer our question, Can a CFO be a CEO?… I believe the answer is absolutely yes! If you want to learn more about how to become a better financial leader, click here.

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Optimistic Projections

By publishing overly-optimistic projections, your company could be at risk for internal financial problems, misleading investors, miscalculating inventory and staff, and more. As we reach the halfway point in the year,  it’s time to revisit whether your company has realistic or optimistic projections.  Are your sales projections still on target?  Now is a good time to review your projections and adjust them if need be for the third and fourth quarter.

Optimistic Projections

Recently, a client met with one of our consultants. When the consultant began preparing their sales projections using our Sales Genie Tool, the client started complaining:

Our CEO, Ryan is too optimistic. He comes from a sales background, so he consistently over-projects sales whenever I, the CFO, ask for them. I don’t want to deal with sales!  I’m not the salesperson.  But our bank is frustrated that we’re not meeting our sales.  I can’t trust Ryan to make smart sales projections goals anymore. 

Sound familiar?

Having overly-optimistic projections is like waving a loaded gun… bad things will happen.  Stakeholders in your company rely on these projections and it’s important not to mislead them.

Why are CEOs and salespeople so optimistic?

Sales-minded people often set “stretch” goals…  an appropriate way to move a company forward, but it can shoot you in the foot.  Basing projections upon stretch goals can create problems when getting financing and allocating resources.  Your banker will wonder why you fell so short of your target and your inventory manager will be scratching their head wondering why there’s excess inventory.  In short, what starts in sales can lead to issues in operations and finance down the road.

The “Bullwhip Effect”

Bullwhip_effectThe Bullwhip Effect is a term coined by Stanford University to refer to supply chain changes. The same theory can be applied to sales projections.

A financial leader who doesn’t want to (or doesn’t know how to) project sales typically trusts that the sales team is projecting correctly forgetting that they are prone to cockeyed optimism when it comes to their performance.  The financial leader then submits projections based upon those forecasts to the bank and company management thinking that they’re completely accurate.

But in this example, sales overshoots the forecast by 15%. Operations has hired a few more people to manage the incoming sales and acquired more inventory. Sales sees the numbers coming in, still believing that those numbers are accurate; they give discounts freely and don’t collect in a timely manner. Accounting recognizes that the sales have happened and accounts receivable builds to an unmanageable amount.

All of a sudden, the financial leader is in a bind. Sales aren’t meeting the goal of a 15% increase; it’s more like 2% growth. Operations has tied up all the cash expecting increased sales.  Accounting is attempting to collect all of the sales as quickly as possible. The company is out of cash.

Things have spiraled out of control due to one small, well-meaning error.

How can CFOs or other financial leaders counter over-optimism?

Unfortunately, most sales projections fail due to a one-faceted (sales only) approach to forecasting.  When projecting revenue, it is imperative that you as the financial leader set guidelines and boundaries for your sales team to prevent optimistic projections from becoming gospel.

Here’s how you do it…

#1 Set Expectations

Schedule a meeting time for the financial leaders in your company to meet with your sales team. Set expectations as you move forward in creating sales projections.

These expectations could look like:

  • Review projections quarterly and adjust them if need be at that time
  • Have sales submit weekly reports to accounting to track trends
  • Schedule weekly or monthly meeting to discuss projections

#2 Create Projections Together

The biggest cause of optimistic projections is the accounting department asking sales to provide a number without any validation or input. Without any questions, those numbers are blindly put into the forecast.

There are two different types of sales numbers you should ask for from your sales team: the actual projection and the goal projection.

The goal projection, or a stretch goal, is often what causes these optimistic forecasts. Their purpose is to set a number high enough to motivate sales team to reach it. Oftentimes, it is set higher than is possible to reach. But this sometimes results in sales improving over the previous month or year.

For example, ABC Company’s sales were $20,000 in 2015. When forecasting sales, ABC set their goal projection to be $30,000 or a 33% increase in sales. Historically, there has only been a 5% increase over the previous year. The actual goal should have been a 5% increase as that has been the trend over the past 7 years.

In a meeting, explain the difference between the two types of goals. You need to actual sales goal for your projections, not the stretch goal.

If you’re still not sure how to accurately project your sales, click here to access your free Goldilocks Sales Method tool. This tool allows you to avoid underestimating or over-projecting sales.

#3 Communication

As we’ve said multiple times, there are three essential pillars within a business: accounting, operations, and sales.  Communication between these departments is critical to the success of your company.

Set expectations between accounting and sales that communication should be a priority. If your sales team indicates that they underestimated sales, then it is their responsibility to report that adjustment in sales.  Ask sales to track sales. They should have a weekly average of sales that they need to hit. If there is a trend that they are not meeting the projections, then it’s time to adjust.

Make communication an absolute priority. There is no shame in not meeting projections;  the trick is to adjust expectations going forward.

Conclusion

By proving that you as the financial leader or CFO can add value to a company through setting realistic and accurate sales projections, you’ll be better equipped to set yourself up for success.

For more ways to add value to a company, download the Goldilocks Sales Method to start projecting accurately and building credibility through your sales forecast.

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2

CEOs Want a Wingman

wingmanAs part of my research on leadership for our Coaching Workshops, I met with several Houston-area entrepreneurs to determine what a CEO wants in a CFO.  One of the last people I met with made a comment that I felt summed up all the things the CEOs were looking for.  He said he was basically looking for a wingman.

CEOs Want a Wingman

What does it mean to be a wingman?

Wikipedia says this:

The wingman’s role is to add an element of mutual support to aerial combat. The presence of a wingman makes the flight both offensively and defensively more capable by increasing firepower and situational awareness, permitting the attack of enemies, and increasing the ability to employ more dynamic tactics.

So to paraphrase, the wingman’s job is to support the leader by helping to assess the situation, take out obstacles, and adapt to change which improves the ability to achieve goals and mitigate risk.

Assessing the Situation

CEOs want a CFO who help them determine the “lay of the land”.  Often, they do this by projecting financial needs, modeling new ideas or preparing “what if” scenarios.  They work within the organization to build relationships with other functional areas and determine what their needs and opportunities are.  They also represent the company externally to bankers and investors to determine what opportunities the company has for growth.  A CFO wingman helps bring clarity to the situation so that better decisions can be made.

Taking Out Obstacles

CEOs are excellent at developing new ideas. CFOs are excellent at identifying problems.  What some CFOs fail to realize, however, is that the CEO looks to them to provide solutions rather than to simply point out how things can go wrong.  A CFO wingman doesn’t shoot down each new idea, but looks to find a creative way to make the idea work in a financially sound way.

Adapting to Change

Most CFOs react to change by seeking to stabilize the environment.  Since most CEOs are great initiators of change, this can lead to frustration on both parts.  One way a CFO can avoid the frustration is to be a sounding board for new ideas.  If the CFO is part of the vetting process, he or she will not only be more likely to be on board with the new idea but will also be able to guide the creative process in a way that ensures a greater degree of success.  As a result, the CFO develops a better understanding of company goals and is more comfortable contributing their own ideas on how to grow the company.  A CFO wingman realizes that the best way to address change isn’t to fight it, but to adapt to it.

Achieving Goals

The goal for most CEOs is to grow the company profitably.  CFOs can help their organization reach this goal by cutting costs, improving productivity, and assisting in developing sound pricing strategies.  Since the CFO has control over most overhead costs, they usually are very skilled at cost cutting.  CFOs looking to improve productivity can often make the most impact by helping to determine what the companies key performance indicators are and developing reports to track these KPIs.

The area outside of most CFO’s comfort zone is pricing.  Often, prices are set with input from sales and operations without consideration of the company’s economic model.  The CFO can provide this vital information to ensure that the prices set will result in profitable sales.  A CFO wingman shares the leader’s vision and helps him or her achieve it.

What are some of the things you think a CFO wingman should do?

Download our free How to be a Wingman guide by clicking the link below. Take your career to the next level and step up into the trusted advisor role.

CEOs Want a Wingman

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CEO’s Role in a Company

Former Microsoft CEO, Bill Gates

Former Microsoft CEO,
Bill Gates

There is some confusion about just what exactly is the CEO’s role in a company. Some people think it is to be the manager of the organization. Others think it might be to be the face of the company to the public.

CEO’s Role in a Company

Let’s ask the question another way. How does a CEO define success? They define success by any of the following:

The answer is all of the above!

So what is the CEO’s role in a company? To put it succinctly; the role of the CEO is to grow the company profitably! Now many CEO’s might grow a company, but not all of them do it profitably. Often the CEO comes  from a sales or operations background. Consequently, they focus on either sales volume or product quality. Growing sales volume doesn’t require that the sales have to be profitable. Delivering a high quality product does not mean that it may be at a good price!

How does he or she do that? In order to reach their goals they need to surround themselves with a good team. They need to be able to leverage off of everyone’s skills and expertise. To grow a company it takes building an organization that is scalable.

A scalable organization requires that the CEO delegates responsibility of Sales, Marketing, Operations and Finance. Each function has its’ own definition of their role. For example the Vice President of Sales would be held accountable for reaching sales targets. The VP of Operations would be held responsible for the quality of the goods or service. They might have additional team members included in the management team, such as IT or HR.

So if the CEO’s role is to grow the company profitably, what is the role of a CFO? To learn more financial leadership skills, download the free 7 Habits of Highly Effective CFOs.

CEO's role in a company

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CEO's role in a company

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