Congratulations! You’re a newly minted CFO and have reached a career milestone that many dream of. However, if you think now is the time to rest on your laurels, think again. The hardest part is about to begin. Before you step into the role, spend some time outlining what success looks like for your role, your team, and the broader organization. To help you accomplish this, we’ve developed a guide of key activities that great CFOs should tackle in their organization.
- Understand industry and customer base. To be an effective leader, it is critical for you to understand the ins and outs of your company’s industry. It’s not enough to know who your key competitors are or how concentrated your customer mix is. As a CFO, you must be able to articulate the competitive positioning of each player, develop a hypothesis on their strategic objectives, and most importantly, understand how your firm’s way of doing business differs. Your role will be to quantify the impact of strategic changes and identify the business levers that the company can pull to achieve key objectives. Understanding your industry inside out will help you successfully accomplish this.
- Ingratiate yourself with the finance and accounting team. You may be a human repository for all of the facts of the firm. However, none of this will matter if you are not able to articulate your findings and find people to champion your causes. As the leader of the finance function, it’s critical for you to develop relationships with the people in the organization that you will likely be spending the most time with. Every company has their own way of structuring finance and accounting, so understanding how these departments interact with each other will help you establish the roles and responsibilities that each is accountable for. This will prove critical in tight deadline moments: knowing who holds what data will prevent you from wasting precious time!
- Build strong relationships with management and the board. It is also imperative to build strong relationships across the management team and, if applicable, board. Although often perceived as “ivory towers,” finance teams at their best embrace cross-functional collaboration. Building rapport with leaders of other functions will be critical in ensuring that your financial models have the most up to date information. Furthermore, by establishing trust across the organization, you will be able to provide valuable scenario planning that other departments can use to inform their decision-making. This, in turn, creates a positive flywheel effect for the firm in achieving broader strategic objectives.
- Evaluate current financial processes and systems. Depending on the state of the firm you are joining, you may be adopting a rudimentary pen and paper process that requires a complete overhaul. While it may be tempting to purchase the latest and greatest ERP system, before you do, it would be wise to take stock of what you’d like to accomplish. At a bare minimum, there needs to be some type of annual planning process in place. You can leverage this as a building block for subsequent budgeting processes, and other resource planning initiatives. Figure out the mission-critical objectives to the organization and find a way to incorporate this into your team’s processes.
- Set SMART goals. By now, you should be familiar with SMART (specific, measurable, achievable, realistic, timely) goals. Fortunately, since finance deals primarily with numbers, setting these types of goals should come more easily. However, don’t just rest on easily achievable goals. Push yourself to set aspirational goals as well. Whether it be centered around maintaining high morale, or integrating an ERP system within 2 years, find something that your department can rally around.
