What are the best characteristics to look for in a strong CFO?

I am in the process of starting a new business, and as the "CEO" of the company I have found that I am the creative, mile-high "big picture" guy. I have struggled with finding and identifying a partner with stronger CFO characteristics than me because I am always the one hiring them, and I find myself more attracted to similarities rather than the strengths where I possess weaknesses. I would love to hear some suggestions from other CEO's/business owners that have had similar struggles, and that have any suggestions for how to go about doing this.

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General Management

Operations

CFO

Leadership

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T. Perkins

asked on May 23, 2011

Karen Fisher

SHRBP

Posted on May 30, 2011

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T. Perkins

Hi, I am coming at this answer from a HR point of view. Having worked in many roles, in many industries both large and small, one quality I think is imperative for a CFO to master is the ability to understand HR. In smaller organisations, HR does not have a senior role and often reports into the CFO. Therefore the CFO is involved in / represents the decision making around the people side of the business. Businesses are much more than numbers on a spreadsheet, they work successfully by having the right people in the right place at the right time to instigate growth. A CFO needs to understand and work comfortably with this concept.

Bob Swedroe

President & CEO, Expandable Software

Posted on May 30, 2011

Recommended by:
T. Perkins

The wording of you question and summary is interesting as 1) you talk about characteristics as opposed to tasks or responsibilities.and 2) you state "I am the creative, mile-high "big picture" guy. I have struggled with finding and identifying a partner with stronger CFO characteristics than me because I am always the one hiring them."

My fundamental belief is that the CFO should be see the "big picture", as long as the smaller details and business logistics are under control. Given that, I struggle to understand your other statement where you say " I have found that I am the creative, mile-high "big picture" guy...... I have struggled with finding and identifying a partner with stronger CFO characteristics than me

The CFO's #1 job is two fold; 1) to to make sure your books are prepared accurately and timely and 2) to safeguard the assets of your company.Having said that, those responsibilities are essentially "cost of entry". If the CFO struggles or fails to achieve these 2 tasks, then time to look for another CFO.

The additional things that you want from your CFO are :
* Business Partner: they should understand your business and be your adviser for strategic and tactical issues
* Finance expert in terms of business deals, contractual arrangements, arranging financing, and managing cash.
* For a smaller business, you need a jack-of-all trades to handle or at least represent multiple functions including HR (as Karen recommended), legal, facilities and IT

A few of the desired characteristics are:
1) Unquestioned Integrity
2) Strength to disagree with you or the majority of your team; having a "yes" person, might make you seem smart, but is that what you really want?
3) Self starter; so many tasks to juggle
4) Perseverance
5) Team builder
6) Leadership qualities

T. Perkins Replied on May 31, 2011

Bob: Really appreciate your and Karen's feedback. I wrote that question in a flurry without really digging in to the intricacies of the question, and you answered a critical part of what I was asking without me really asking you to. I guess one of the biggest struggles that I have had is identifying what my specific skill set is more inclined for, and identifying where I have specific weaknesses or points I'm not as strong at that a good CFO could essentially bridge. I'm not the best one to be handling the book keeping, but I am the best one to go out and syndicate opportunities for my growing businesses. I agree that the CFO should be an equal part of the "big picture" from the standpoint of "does this make sense, are we doing it at the right time, and is this a path that we should be going down?" Having had a few business partners in the past that I did not work well with identified for me characteristics in a business partner that I should look for as assets to the business, and others that I know will be detrimental to it. You said I have struggled finding someone with better CFO characteristics that me, and I would say that is totally correct. My biggest hurdle is finding someone who I can TRUST enough to place in that critical role of the business and know that what needs to get done is getting done. It seems like a daunting position to ask someone to fill, and I think I might feel that way because I find the responsibilities of that role daunting to me.
Last year I had to shutter one of my businesses and file Ch. 11 (it was a magazine) because we found ourselves financially incapable of being able to accurately depict our financial future (our business ran COGS around 75% of our revenues, and we had clients paying us 60% of the time when they felt like it). I guess my pessimism of myself in hiring the right person for this role stems from feeling a bit responsible for the outcome of that business, and I need someone who isn't afraid to drill in to the tougher parts of the business that I'm not as good at drilling in to.