In this week’s edition of Crain’s, Nancy Kaffer and I discuss the role of a CFO in an organization. Below is a copy and link to the article. I hope you enjoy!
To view the entire article as a PDF, click here CFOs Need More Than Numbers.
“REPORTER’S NOTEBOOK: CFOs need more than numbers” by Nancy Kaffer
When it comes to developing the skills of financial and accounting employees, many businesses tend to improvise, said Ren Carlton, managing director of Troy-based Dynamic Advisory Solutions PC.
And that’s a mistake.
For the companies served by Dynamic, which offers financial services to companies with less than $50 million in sales, long-view and day-to-day accounting functions tend to be compressed into one role. But as a company grows, those functions have two distinct job descriptions, Carlton said.
“The CFO is really visionary,” Carlton said. “Really strategic — a person who gets the 50,000-foot view, not the traditional bookkeeper. That’s more of a controller role. People try to improvise, find a person who will fill the whole role, but those are two different personality types.”
One reason business owners might be reluctant to divide the roles — and help their financial executive team reach the next level — is fear of the unknown, he said.
“When people get comfortable with a financial person, they really don’t want to bring a different person to the party,” he said.
Education can sometimes fill the gaps that would make a competent bookkeeper a top-notch controller, Carlton said.
“A lot of people in this space don’t have an accounting education background,” he said. “A lot of people come through ranks, start as a bookkeeper, evolve to controller or CFO. They have the “how,’ but they don’t have the “why’ behind it.”
College classes, he said, can help ensure that the controller candidate has the depth required to perform successfully.
The same is true of a potential CFO, Carlton said.
“The biggest disconnect is education,” he said.
But there’s another element in developing a likely CFO candidate, someone who can be strategic about the company’s fiscal future.
“Some of it is vision, but one of the challenges of taking a strong financial person and turning him or her into a CFO” is seeing the big picture of a company, he said — and developing the people skills to communicate that vision, as the financial side of a business’s operation is traditionally drier than its creative or sales side.
“If they’re not getting the full picture, the full vision of the company, a Dale Carnegie personal-skills type class — sales training, almost — can help develop interpersonal skills but also the big picture,” he said. “It’s not just about cost control.”