It’s a topic that has been widely covered lately, but Ken weighs in with his views on the differences between a Controller and a CFO…..

As a networker and recruiter of senior finance and accounting talent, I often meet CFOs who truly fit the bill, but oftentimes I meet folks with a CFO title in a Controller job.  Some people have such a hard time breaking into the CFO ranks, while others have no problem at all.  I’ve often wondered what separates a good CFO from the others working in the finance and accounting function, and I’ve identified 5 factors I believe which clearly define the CFO position:

 

·         CFOs are more outward facing than any other position in finance and accounting.  The outside world is more dynamic and risky, and the CFO position requires maturity, real technical knowledge, and good relationships developed over a career.  The outward-facing relationships include investors, bankers, regulators, clients, vendors, accountants, industry contacts, etc.  Many people know that I am passionate about networking and relationships.  Many of these outward-facing relationships are developed deeply through networking.   If you are a CFO in a middle-market company but it’s actually the CEO who “owns” these relationships, you are acting like a controller.

 

·         CFOs are more forward looking than any other position in finance and accounting.  Whereas a Controller spends much of their time looking backward while closing the books or determining how to record an entry according to GAAP, CFOs spend relatively more of their time on hiring, developing their people, budgeting, planning and most importantly, on strategy.  These are clearly things that impact the future.  Listen to a good public company conference call and you will see how much time is spent on how current information will impact the future.  Networking also comes in here as well, as what is more forward looking than building a relationship? 

 

·         CFOs are more expansive in their thinking.  I recently had a conversation where a hiring CEO was describing what he wanted in a CFO.  The CEO said, “I want them to take the cost out of the cost structure!”  I thought to myself that, for a good CFO, this isn’t really a huge requirement.  And while a good CFO needs to do that, the great ones will also be thinking about how to expand the business.  Cost-cutting opportunities are finite; expansion is limitless.  This is why good CFOs are constantly thinking about M&A opportunities.  Have you ever heard of a Controller proposing a merger or acquisition?  Real CFOs influence strategy.  Real CFOs sell!

 

·         CFOs are experts on the Balance Sheet.  The Income Statement is simple; the Balance Sheet is complex.  The Income Statement takes the short view; the Balance Sheet takes the long view.  The Income Statement looks backward; the balance sheet will impact the future.  More than any other position in Finance and Accounting, the CFO is the expert on the Balance Sheet. 

 

·         A good CFO is also a good networker.  I have interacted with hundreds of CFOs and I have determined that good CFOs are good networkers because most of the responsibilities and activities mentioned above require great relationships inside and outside the company.   Good networking is a requirement to excel as a CFO, much more so than any other position in finance and accounting. 

 

If you are one of the many people who aspire to be a CFO, I recommend that you ponder what it is you will need to do differently not only to break into the CFO ranks, but also how you can excel there. 

 

Ken Tudhope

Project Pro Search

ktudhope@projectprosearch.com