CFO Worthy Journey Animation Script
I have been a CFO for the last 27 years serving 7 different companies with, one IPO, several exits, over 15 acquisitions and lots of capital raised. Company size varied from start up to $140 million in revenues and was primarily in the tech sector.
This is to share things I learned that may be helpful to you.....the goal is for you to have a worthy journey vs an empty pursuit.
What is the worthy journey?
A cause, not just a job
Working for a CEO you admire and can grow with
Proud to be part of the organization where your shoulders straighten when you tell someone who you work for, a culture that has values you are passionate about
Customer centric......dedicated to the customer experience
The soul is filled not drained
What is the empty pursuit?
A job you stay with for the money or position
Leadership that lacks a value system
Short term thinking and decision making
Cut corners to hit goals
Lack of respect for all team members
Over sacrifice of family for work goals
Well you need to decide what kind of journey is right for you.....
to get on this journey, first you have to get hired. I asked my former CEO’s and founders why they hired me.......
#1 reason was that they believed I would align with the mission and purpose of the organization and get “sh**” done
Quickly followed by:
People skills
Possessed a wide range of skills that would help the business
Was a person of value and integrity
Coming up with my cash compensation was always a negotiation but fairly easily reached using market and internal peer equity as benchmarks.
Learning assuming that your compensation will always go up is risky.....your compensation can go up or down depending on the pay culture of the company.
There is an art to negotiating your equity compensation.....
this is an opportunity to be included in the equity game with the majority owners and create wealth for your family....
my experience was .75% to 1.25% of the fully diluted ownership......
IMPORTANT......know the cap table in detail, and understand how every owner/investor/option holder makes money going forth, request that the CEO demonstrate how much your share would be under different scenarios.....after negotiating for the highest % possible, offer to buy shares directly, this provides you with another way to increase your % ownership while demonstrating that you are “all in” with skin in the game. Even if it is not a big dollar amount, it will be viewed favorably.
Yippee!! You got hired.......now, how do you become effective and stay on the worthy journey path?
A key learning was how quickly my effectiveness at work meant little to me when my home life was not good.
This line between home and work life can only be defined by you and the people you love. I know that I never figured it out.
To many times I crossed the line where my loved ones were hurt by my lack of presence both physically and mentally.
I could be on top of my game work wise and then have a tough conversation at home and feel totally deflated for my lack of awareness of what I was doing to those I love.
Find your way here, or, it could be an ugly turn to the empty pursuit path. The CFO role is awesome on many levels. But, it comes with a price of admittance that is steep. Lots of hours, lots of stress, lots of risk, lots of travel. I did not lament the hours, I knew extra hours came with the role.
My spouse was extremely understanding, but, remember the line is there and crossing the line is dangerous.
What else is critical for your effectiveness? Working out? Connection to faith? Hobbies? Have to find a way to get them included in your life. It is another trip down the empty pursuit path to be successful in business and not have your health, your faith and other relationships/interests.
Unique to the role of the CFO is the influence matrix the CFO operates within........there is the direct relationship with the CEO, the CFO’s peers in the company and the board/investors.
To be effective the CFO needs to be good at each of the corners
of the triangle......this is an ART not a science......each animal is wired differently........I worked for seven tremendously talented founders.....but, here is the curve ball, they each had very different personalities....... as CFO’s we need to adapt. Regardless of the personality types they all had key characteristics that drove the CEO’s success.
Learnings:
Accept the founder for who they are. You are not going to change who they are. Nor should you try. Meet them where they are at.
If you try and change the founder or try and rein them in, you will be viewed as just another doubter. Founders of start ups have heard from a long long line of doubters telling them their ideas won’t work, or, that they are not good enough to make it work.
Successful founders never give up. They go all in and find a way to make it work. The art for the CFO is to be viewed as the supportive wing man/expert. Not afraid to speak up but do so in a way that accepts the founders ideas and explores them with insight.
I always did whatever it took to be aligned with the CEO to the board, investors, public and other company team mates. Not always easy......this is where you have to be in touch with your value system.....stay true north on your values or risk the empty pursuit.
You will grind on disagreements with the CEO, but, learn to work through it and come at it again. As long as you maintain your integrity, you will find that your ideas are generally incorporated or at least considered.
Sound easy?......what do you do when the board/investors disagree with the CEO and you do to? We CFO’s need to find a way to communicate without pushing our CEO under a bus, yet maintain your brand with the board. Tough stuff. I always felt it was more important to align with the CEO then to be “right” with the board. It is hard to bite your tongue when you know you are right. Not saying I exactly figured it out, but it was the only way I thought I could stay effective. The greater evil would be for the board to see disagreement between the CFO and the CEO at the board level.
I asked the CEO’s/Founders that I worked with for their top tips for CFO effectiveness. The feed back was fairly evenly split amongst these top items:
Understand the entire business
Keep the culture while pushing the organization
Work horizontally across the organization
Demonstrate the ability to think big and step up the risk in order to grow
If you as a CFO get rated highly in these areas, I think you are going to be one damn good CFO.
Peers:
I focused on investing heavily into the relationships of my fellow management team members, their direct reports and other staff members. It made me smarter about our business and once the relationship and trust were established it allowed us all to move faster.
These steps helped me.......I took all new employees out for a one on one lunch, I invited myself to visit customers and significant vendors..... gotta get out of the frickin’ ivory tower office.
Again, I got smarter, demonstrated to the team that we were all in this together and it made the journey even more worthy as it was energizing and fun. I also had a mantra that if a customer issue arose, I would drop what I was doing so that the customer issue could be resolved. A common example was deal contracts. On the short list of business absolutes I believe in, is, that organizational speed is a critical company competitive advantage. Our companies cannot afford to move at the speed of the CFO...to slow, and the market will run you over.
Board Members/Investors
Board management is a skill that few CEO’s have. This can lead to major problems with getting decisions made. The CFO’s role is to support the CEO and recommend steps to be taken to help with the board. Unhappy boards/investors make for draining mental time, wasted extra board preparation time and a slow down of the organization.
Dealing with investors (private equity/venture capital) is an entirely different equation. You need to be both aware of it and recognize what is happening. While you can build an effective relationship with your company team mates by performing and acting with character, that is not necessarily the case with investors.
They have different goals, outside influences and a short-term perspective that will at times put them at odds with the goals of the company and management team. It does not mean that investors are not talented. Quite the contrary. They are generally really smart, really rich and have successful track records. As CFO you just need to know they see the world through a different set of glasses. They are driven to get the best possible return for their firm. Things like core purpose, loyalty, customer success and personal relationships which are key for you are quickly sacrificed if the PE/VC believe it is in their best interest. While impossible to not take personally, just know that it is the nature of the animal you are dealing with.
Most investors I dealt with want to keep the relationship with the CEO as the primary for communications. However, frequently, they are looking to the CFO for the straight talk. Be careful here. You owe it the investors to give them good, useful information. But, make sure your CEO is not surprised by information you share with the investors/board members.
As good as a CFO gets with the triangle, sometimes it will just not be enough to keep you employed.
I twice had my position eliminated as part of broader management re-orgs. Both times it was surprising and devastating to me. I was all in with these companies and teams. I worked hard and had great relationships with the CEO’s. Here is my key learning.......you will most likely get fired at some time on your journey. It may be the most unfair decision you have ever experienced. It will be frustrating, embarrassing, and you will worry about your career. Once you have the chance to look back it and look at the world around you. You will see a long line of the most talented people you know, people who you deeply respect have the same thing happen to them. I learned that it happens to nearly everyone and to every organization......again, it is the nature of the job. Comes with the territory like being a pro sports coach. So......what do you do when you get fired?
Read Zen and the Art of Happiness for a great reframing of what it means when you have a set back and how to view what is next.
Learn how to get a job, network, join a job transition group. Healthy for mind, soul and effective in getting your head screwed on right. On the web site is a link to the Wooddale Job Transition Group. Awesome resource for making you more effective in a job search. Don’t think you are better than others who have lost their job. You can and should sharpen your skills for interviewing. BTW.....it helps your soul to help others and get out of your funk.
Building teams.......there is no greater compliment to a manager that they built an enduring capability for their organization. How do you do that?
Hiring great people is essential to any manager’s effectiveness. I was blessed with fantastic controllers and finance team mates.....don’t be afraid to pay up for the better talent.....manage by values and accountability.....the team owns their work.....especially the balance sheet......they are to find mistakes and correct them, not the CFO, continuously improve and stay aligned to the goals of the company and train them to become story tellers not reporters, that is how they add the most value to the company.
Final thoughts on day to day effectiveness:
Through the good days and the tough days, stay True North on the core purpose, values and vision of your company. Using the culture of the company as the governor of behavior and the multiplier of organization speed
Keep a list of the five things you don’t know about your company/markets that you feel you should. Keep knocking these items off and share back with your CEO and team mates.
Deal time is SHOW time.......acquisitions and fund raising are when you can prove your value.
This is when the CFO needs to shine.......you need to NAIL it......have your skills ready so that you can deal with investors, prospects, legal...work whatever hours you need to and respond promptly to any questions/requests.
Find ways to develop yourself........this is where the CFO has another opportunity to bring value back to the organization. Read......listen to audio books and go to development opportunities. I had the chance to go to Stanford for a two week executive course and to Kellogg for a shareholder value creation course. I learned a tremendous amount from those courses and to this day use the skills I learned. I joined a local CFO work group called the Collaborative. We met monthly and continuously learned from each other. A learning I had later in my career was that reading and listening to audio books after work as energizing and not draining. After a long day, listening cleared my head feeding the strategic/planning portion of my brain....can almost feel my brain saying thank you for pulling it out of the burn out that comes with the tactical vortex of the day to day.
I encourage all us CFO’s to share ideas and continuously improve our profession. There is a web site set up for you to find more of my learnings, development ideas and a place to share information with fellow CFO’s. The web site is at www.cfoworthyjourney.com.
Finally, it was an honor for me to be a part of teams where I could chase a common goal and create that magic where commerce thrives. As a CFO, I was given a unique opportunity to contribute. Whether you see yourself as a type of CFO like Wonder Woman or Captain Kirk or more like a Jimmy Stewart in it’s a Wonderful Life, I hope this gave you a nugget or two to consider as you craft your worthy journey.
Rock On!!