Let me begin this blog series with a disclaimer: there is no single formula for taking over as CFO successfully. CFOs are appointed in a variety of ways: promoted from within or hired from outside; in family-run business or multi-national corporations. The sheer variety makes it impossible for all new CFOs to follow a single path. In this series, I only wish to point out 3 essential steps that would benefit new CFOs regardless of their backgrounds.
Step 1: Learn
New CFOs must start by gaining deep understanding about the business, its strengths, imminent and long-term threats and stakeholders. This learning process starts as soon as they lace their CFO shoes on the first day and lasts for at least 3 months. The best way to learn is also the simplest: just listen. Listening will help you understand pain points. It may also help you find the solutions hidden within the issues. Be a student, be willing to learn and accept contributions from key stakeholders. A great by-product of this process is that you will start forging healthy relationships with them right from the outset.
Learning about the business
Spending some time getting to the core of how the business actually makes money is key, especially if you have come in from a different industry or business model. Perhaps the greatest challenge you need to learn to tackle will be to adapt to the culture, both across the business and within your team.
Corporate literature and reports are just the starting point. The most useful inputs will come from meetings with the rest of the C-suite, your team, auditors and industry analysts. Speaking about analysts: it is important for you to reconcile their perception and the reality expeditiously. The moment analysts and shareholders feel confused after your communication, they tend to distrust and neglect your business’ stock. Streamline reporting processes such that they say exactly what the business wants to communicate.
Learning about stakeholders
You have already listened to the perspectives shared by the C-suite, your team and auditors by now. Also invite inputs from other functional heads. Learning about the challenges they are facing can help you create your agenda of focus points. Assess the utility of all these opinions and how they might affect your decisions. In addition, try to spend a large chunk of time learning from the CEO in the days leading up to your formal appointment. It will help you gain clarity about your profile, stakeholders’ expectations and how you can make a difference.
Learning new skills
A CFO’s role often puts you into unfamiliar territory, where you need a whole new set of skills to chart your path. To develop these skills, you could get formal training from experts; informal tips from former CFOs or peers; and learn a whole lot on the job.
Remember that no matter how talented and experienced you may be, you cannot be an expert at everything within your range of responsibilities. Thus, you must build relationships with those within your team who can execute various tasks superlatively. The aim is to fill up all the skill gaps to attain your corporate objectives efficiently.
The next post in this series will give pointers about wisely selecting amongst the overwhelming number of to-dos on your agenda.