Very good CFOs are voracious viewers, and we’ve experienced the enjoyment of studying Ben Horowitz’s Very good Products Supervisor/Bad Products Supervisor awhile in the past. As an homage to Ben, we borrowed his format and utilized it to the CFO in 2020.
A excellent chief monetary officer (CFO) understands how to connect, regulate teams, and understands the facts driving the figures. A excellent CFO manages all the regions no just one else desires but however wants, like accounting, tax, services, coverage, monetary organizing, and treasury — to identify a several.
A excellent CFO paints a monetary image of the company’s subsequent 12 to 24 months to enable the senior executives see the potential and approach appropriately.
A excellent CFO is dependable for funds. He or she understands when the stability will be minimal and what to do about it (irrespective of whether to sluggish down funds burn up or raise cash).
A excellent CFO obtains input from other senior-level executives, can help them have an understanding of the wants of the organization as opposed to the executive, and architects a monetary approach that balances people wants. A excellent CFO reads the tea leaves of the gross sales crew and the in general industry, then can help program-appropriate to ensure the organization has potential viability. A lousy CFO blames others. “The executives invested also quick.” “The CEO is also optimistic.” “Our board users usually imagine of me as the lousy dude.” “VCs will not give us funding.” “Our tactic doesn’t get the job done.”
A excellent CFO does the opposite he or she understands the root lead to of what goes completely wrong by highlighting the challenge and proactively giving data to the board of directors, CEO, and other executives who will enable them see the route forward.
A excellent CFO is a great manager. He or she hires all-stars in their respective fields (e.g., accounting, tax, services). He or she trusts them to do a great occupation although preserving open conversation and possessing standard test-ins — trusting but verifying. He or she has a community of specialists to seek the services of or solicit feed-back from in buy to make the group greater. A excellent CFO understands how to delegate given that it would be extremely hard to be an expert in each individual spot less than the CFO’s purview.
A excellent CFO provides a eyesight of in which the finance group really should be in 18 to 24 months to enable the organization scale and then he or she supports the finance crew to get there. Other executives do not look at a excellent CFO as an accounting expert or a tax expert but as a strategic associate.
A lousy CFO offers engineering, solution, or internet marketing guidance to the respective executive. A excellent CFO provides beneficial facts, insights when a further executive is in excess of or less than spending budget, and unbiased analytics that will enable clear up difficulties and respect boundaries.
A excellent CFO speaks visually, with photos and analogies, not just analytically. Utilizing quick, pointed, nontechnical accounting or monetary explanations are crucial to producing a stage. A lousy CFO wraps himself or herself in jargon and focuses on what folks just can’t do and is usually prepared to say, “no.”
A lousy CFO seems for loopholes and manipulates the figures to explain to regardless of what story they want. A excellent CFO has large integrity and factually stories the figures. He or she is a risk manager and can help regulate the lows and highs by anticipating them and giving warnings to the organization.
A excellent CFO options ahead and encourages workers to explain to the truth promptly — irrespective of whether it’s excellent or lousy information — without the need of retaliation. A lousy CFO is constantly in a point out of chaos and hardly ever desires to listen to lousy information from their workers. A excellent CFO acknowledges they really do not have all the answers and engages their crew in fixing any challenges. A lousy CFO feels finest about on their own when they have all the answers.
A excellent CFO explains overages and shortfalls methodically, utilizing waterfalls to present the ins and outs of how actuals differ from expectations. A lousy CFO will not roll up their sleeves and dig into the nitty-gritty. A excellent CFO will decide on up a piece of trash on the flooring when they walk by without the need of expressing anything at all to anyone. A lousy CFO acts like a cop and wields his or her electric power in excess of others.
A excellent CFO has the maximum ethics and acts as the ethical compass for the group, contacting out lousy habits without the need of focusing on the personal, all the although holding their crew to the maximum conventional.
A excellent CFO focuses on shareholder price balanced with personnel and societal wants. Discussing the company’s monetary image with all workers results in transparency, can help tell determination-producing, and provides context to selections that ended up now manufactured.
Rob Krolik is a controlling associate at Burst Cash, serves on the board of directors and audit chair of The RealReal and Solar Basket and is an Aspen Institute Finance Fellow. He also teaches a CFO program termed, “How To Be A Great CFO.” You can make contact with him at [email protected].
Jeff Epstein is an functioning associate at Bessemer Enterprise Partners and a lecturer at Stanford College. He specializes in marketplaces and B2B computer software businesses. He serves on the boards of directors and audit committees of Kaiser Permanente, Twilio, Shutterstock, and many personal businesses.