You’ve Landed a New CFO Job…. Now What?

The first 60 days at a new company can make or break the tenure of an incoming CFO. Here are some tips for tackling the priorities, according to Cfo.com.

When stepping into the CFO chair at a new organization, some say that within the first few weeks you should:

1) Gain a clear picture of the business’s operations first, then meet with other senior executives.
2) Aggressively delegate lower-value-added activities immediately.
3) Spend more time interviewing customers than meeting with the CEO.
4) Stick to meeting with department heads and avoiding gathering intelligence from their subordinates.
5) Immediately ask to take over functions more operational in nature, like corporate development, if the CEO is looking to delegate.

Does all of the above sound wise? Actually, tips 1), 3), and 4) are highly questionable, according to consultants and sitting CFOs. But they do suggest that there’s a lot to think about when planning how to attack the first couple of months at a new company. To be sufficiently prepared, the best CFOs develop a game plan before their first day.

Why should CFOs be thinking about this now? Many CFO posts at all kinds of companies will be opening up in the next few years. The reason is generational mathematics. A 2016 study by Spencer Stuart found that the average retirement age for a Fortune 500 CFO was a shade over 58. An informal study of the most recent Fortune list by CFO columnist John Touey pegged the current average age of those companies’ CFOs at about 56 (give or take a few months). The population of baby boomer CFOs is rapidly shrinking. And though many baby boomer CFOs will stay in the workforce, few will do so at the CFO level past retirement age.

To fill those vacancies, U.S. companies are increasingly turning to outsiders. An August 2019 study by Crist|Kolder Associates found that 43% of CFO positions at Fortune 500 and S&P 500 companies are occupied by candidates hired from outside the company. That’s 10 percentage points higher than the average the previous 10 years, the recruiting firm says.

Given these dovetailing trends, many finance departments are going to be handed to CFOs coming into an organization cold: they may know the industry, but they won’t have the organizational knowledge accumulated from climbing the ranks. And, unfortunately, a new CFO can’t expect much help during onboarding. According to a 2018 Gartner study, only 9% of companies have formal CFO orientation programs.

Since most finance chiefs will have to go it alone, we’ve compiled six tips that will help a new CFO get off on the right foot.

What do I want from senior executive peers?

More than one-third of CFOs (37%) in Gartner’s 2018 study, “Succeeding As A New CFO,” said building working relationships with the leadership team was one of their most significant challenges as a new CFO. But it is also one of the most crucial first activities.

Building rapport with senior management colleagues is all about establishing credibility by asking the right questions and listening carefully, says Judy Munro, senior managing director at Robert Half Executive Search and an experienced CFO and board member.

“Start off by building your internal capital,” she says. That means asking two key questions to open the lines of communication and earn trust: First, “How can I help you and support your role?” Second, “Is there anything that I need to know about past experiences that we can do differently?” The answers will help a new CFO understand internal customers’ priorities, among other things.

Above all, get to know your colleagues as people, Munro says. “Get them out of the office. If you can take them out to lunch, fantastic, and just let them talk.”

Who are the “doers?”

In a start-up, relationship building can be more difficult, says Marie Myers, CFO of UiPath, a robotic process automation company. It’s tricky when the org chart is a rapidly moving target, but connecting with the right people is essential. 

 

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Instead of merely going through a checklist of department heads, “what you might find is that you have to reach out to people who traditionally may not have been considered part of your circle of influence.”

According to John Reidy, CFO of Diabetes Canada and a former senior finance executive at large multinationals GE Healthcare and NCR, the importance of forging ties within the organization’s informal power structure in the first 60 days can’t be underestimated.

“There are employees that don’t necessarily have grand titles like vice president, but they’re absolutely the people that get things done,” says Reidy. “They’re also the ones who know where the bodies are buried.”

However, says Reidy, proceed with caution: “People often have a reason for telling you things and their motives aren’t always as pure as the driven snow. But at least it gives you one more piece of the puzzle.”

Continue reading.

 

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SAIBA and IAFEI

 

 

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