Starting a new CFO role comes with a host of challenges and a steep learning curve. It can be tough to work out what to tackle first.
When starting a new role in any function, there is a mix of excitement and trepidation. With a new C level appointment, the business expectation is that things are going to change. That can spawn a sense of fear or new hope depending on the existing frustrations and business culture.
Getting the tone right when walking into your new role is paramount. Here’s how you should approach your first three months:
Know your people (and the business)
There are a cast of new characters to get to know when entering a new role as a CFO. All are important for different reasons and need to be listened to.
Identify key influencers to ensure the right people back your ideas, as well as support to make changes. It could mean more time managing investor relations, auditors or key functional heads. This is a group which many overlook, and yet they can help to deliver plans.
Your team are critical to delivering your plan. Without their support, you are going to sink. So an early assessment of your team’s skills will pay dividends. Be brave early on to ensure you have the right talent to make your ideas happen.
Listening to the woes around processes, access to information, systems and communications which frustrate performance, are important in understanding where change needs to be directed. So take time meeting all the key players.
Take a value audit
A strategic review of how value is created in the business helps build a picture of what makes the organisation tick, how the company makes money, it’s margins and return on invested capital (ROIC). You must consider potential ways to improve these drivers, such as sources of growth, operational improvements, and changes in the business model, as well as how much the company might gain from all of them.
Several CFOs we interviewed conducted a strategy and value audit soon after assuming the position. They looked at their companies from an investor’s perspective to understand how the capital markets would value the relative impact of revenue versus higher margins or capital efficiency. They assessed whether efforts to adjust prices, cut costs and the like would create value, and if so, how much.
Be prepared for cultural differences, schedules and peaks and troughs. Your role may be more high profile in a growth business with private equity investors, or in a well-known brand. PR and promotion may become part of your remit, which will impact on your time. It might have very strong departments which demand more attention and ‘shout louder’ than others. Culture is tricky to navigate in a new role, and certainly the hardest to influence.
Process the pain points
The advent of new technology and the promise of benefits in time-saving, costs etcetera, so many CFOs are looking at undertaking transformation projects to improve processes. However, it is important to weigh up if the benefits outweigh the investment and time needed to make it happen.
Some improvements payback fast, while others take time to realise. A new ERP system will benefit many but may soak up months of time and energy, whereas better reporting functionality could ensure your team is better informed but will take just weeks to deploy.
Think about how a big project will impact you and your team. There is only so much time in the day to fit in projects, so make sure you don’t sink your team too early on in your venture.
Build a team
Good finance people are hard to find these days. It’s important that they are doing value-added work. Time spent number crunching, reconciling and defending data isn’t adding value to the business.
Conversely, a team that isn’t asking the right questions or analysing results may not be right for a forward-thinking business.
You might need to do some retraining or you may need to bring in some new blood. The better your team are at fielding issues, adopting new systems and speeding up the process of producing numbers, plans and budgets, the more they will support and relieve you of time spent fielding issues.
Plan and communicate
Planning relies on good data and information. It also relies on contributions from the whole team – it’s a truly collaborative process. A combination of the latest tools can also help you ensure it stays relevant.
Planning should drive better decisions, measure performance accurately and provide insight. Reports are a communication portal, so make sure you can share information easily to all. This will ensure everybody understands the plan and why it is important. This supports plans getting delivered successfully.
Don’t underestimate the importance of communicating your plan. When people get relevant, well-structured information in a format they understand and like then they can contribute to the debate – without it, they tend to switch off.
This blog is by Charlotte Taylor, director at Formulate. Formulate’s event are on the following dates, Thursday, 31st October, Central London – Book, Thursday, 28th November, Central London – Book, Thursday, 12th December, Birmingham – Book, Save your place now!