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For CFOs, Rocky Beginnings

A McKinsey survey shows finance chiefs in their first 100 days at a company generally unhappy with the way they learn the new business.
Stephen TaubJanuary 2, 2008

Many CFOs, it seems, get off on the wrong foot when they join a company.

In a new survey from the consultants at McKinsey, most chief financial officers report spending more time in their first 100 days on nitty gritty financial matters like financial planning, budgeting, and analysis; management reporting and performance management; and financial accounting, reporting — including on audit and compliance. But what they really believe they should be doing in that early period is bigger-picture stuff, such as learning to understand the company’s business drivers, providing input into business strategy, and setting up the core finance team.

What’s more, when asked to name the top three activities on which they currently would like to spend most of their time, CFOs singled out the more overriding issues. Corporatewide strategic initiatives were mentioned by 72 percent of the respondents, for example, while mergers and acquisitions and other business-development activities were identified by 45 percent of the respondents.

McKinsey drew the results for its survey of first-100-day reactions from 164 finance chiefs, it said.

The responses showed CFO to appear a little less concerned about their personal interactions within the company than with their strategic activities. When asked what individuals within the company they might spend more time with during the first 100 days as CFO, 61 percent singled out business unit heads. But that was the only group singled out for more time by a majority of the respondents.

When it comes to spending time with the CEO, executive committee and board of directors, a majority of CFOs would not change anything.

The CFOs in the McKinsey survey also indicated that they did not exactly shake up the finance organization’s staffing shortly after they arrived.

According to the survey, at least 70 percent made little or no change in a number of areas during their first 100 days, including the release of significant numbers of current staff; elimination of functional positions; relocation of the core team or other staff; and hiring significant numbers of new staff.

Earlier in December, we pointed out that optimism among finance chiefs about the U.S. economy fell to a record low in the latest Duke University/CFO Magazine Business Outlook Survey.

The final results for the 2007 survey of 573 CFOs in the U.S. and 1,275 globally found that 72 percent of CFOs are more pessimistic than they were in the previous quarter. Meanwhile, just 9 percent were more optimistic. Since its inception six years ago, the survey’s optimism index has never been lower.