VideoA prospective CFO also needs to dig into the company's core competencies, says ImmunoSite's Vennare, who demands that his finance chief understands the company's business and financial model, not to mention its relationship with the capital markets. "If the CFO is still learning about my business, the learning curve is already too long," notes Vennare. He adds that a candidate hoping to join the C-level should be more of a teacher than a student. "If I wanted a CFO who was just good at finance," quips Vennare, "I would have hired a graduate student with good marks in finance."
Other sources we spoke with agree: A CFO who is short on basic operational knowledge won't have enough information to make the best financial decision. Of course, the CFO shouldn't get bogged down with operational details — or with financial details, for that matter. To some degree, a finance chief must rely on unit managers to direct the appropriate information up to the C-level. (Maintaining a close connection with operations may be more critical than ever due to some of the reporting requirements of Sarbanes-Oxley.)
7. You're the "Quiet One"
If you can't step up in front of a large group and speak about your company's finances and business, you won't make a good CFO, counsels Clothier of Howe and Associates. Eloquence may not be essential, but you've got to be good on your feet. "You rarely see a wallflower become a CFO," asserts Clothier, especially when you consider how often the finance chief must stand in for the CEO.
That was the case for Jeff Burkel. Almost immediately after being hired as the CFO of Blattner Brunner, an advertising agency, Burkel and executive vice president Scott Morgan were asked to handle some duties for the CEO, who was busy arranging a majority-stake buyout of his partner. Their job was to "be the face of the company," explains Burkel, who says the duo became agency ambassadors to clients, bankers, and lawyers, as well as industry and community groups.
Burkel's negotiating dexterity turned out to be as important as his financial skills. Within a month, he was sent to a large pharmaceutical client to make his agency's case for a major rate hike, in the face of adamant objections by the client. Eventually, Burkel drove home the point that the increased rates reflected a higher level of service. The agency held on to its client — at the new, higher rates.
Regardless of deft negotiating and public speaking skills, a CFO will rarely match the crowd-pleasing persona of a CEO. "I feel for CFOs who have to follow the CEO on stage," remarks Calgon Carbon's Cederna. Successful chief executives are great in front of crowds, so when the CFO joins the CEO in a tag-team presentation, the finance chief usually comes off second-best. Nevertheless, the CFO should have the confidence and expertise to weather any crowd.
8. You've Got a "Financial Disconnect"
Bringing old and new financial relationships to the table is essential for anyone who's stepping into the top finance job. So is a thorough understanding of financial "triggers"; during the past year, many companies with poor cash flow or sinking stock prices took a hit when loan covenants were broken due to downgrades in corporate credit ratings.
For public companies, experience with SEC filings is extremely important (all the more, now that CFOs are required, literally, to sign off); so is a solid relationship with corporate lawyers and commercial bankers. Specific expertise — say, with reverse IPOs or with mergers and acquisitions — is more of a case-by-case requirement. (Providing earnings forecasts, on the other hand, may no longer be an issue for the many companies that are getting out of the guidance game.)
And since the finance chief is the point person with bankers and the SEC, adds Cederna, it's important for CFO candidates to have some treasury and accounting background. As we've mentioned, the CFO shouldn't be bogged down in the details but should be expected to manage the accounting and treasury staffs from a position of experience.
Private-company CFOs need to be well-versed in venture capital portfolios, the motivations of the company's investors, the expected return on investment, and how long the investors intend to keep their money in the company. Finance chiefs at private companies often go so far as to develop a proprietary database that slices and dices the investor base by dozens of criteria, including narrow special-interest markets.
9. You Pay No Attention to the CIO Behind the Curtain
Information technology — and the IT department — shouldn't mystify you, let alone intimidate you, says Shull of Resources Connection's Shull. Given the pressure to deliver more information, more quickly, to the CEO, to the SEC, to analysts, and to business-unit managers, adds Shull, you won't find too many top CFOs who are in the dark about IT. (In fact, if your IT IQ doesn't measure up, you might just want to consider another career.)
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