Following our recent CFO dinner with Crowe, which focused on the 'changing role of the CFO', attendee David Bailey, the highly successful Portfolio CFO/Interim Exec within the tech-media sector, wrote a guest blog for us on his key takeaways from the evening.
5 steps to success as a senior finance professional
Step 1 – Don’t forget the basics
Most of the value creation achieved by a CFO is not intellectual, it is in enforcing basic management, hygiene and focus.
People take financial and accounting skills for granted but pay a premium because of the breadth of skills that a good CFO can bring – “HR, IT, mentoring, legal, are all valued much more highly than producing a set of accounts”.
The CFO is often the only person who can translate the business objectives into plain language and simple numbers so that everybody can align themselves. That ability to translate is often undervalued by CFOs but is highly valued by those that hire them.
The CFO often acts from a privileged point – non-financial staff cannot really challenge them on their core skills or knowledge, but the CFO can challenge all others as they tend to have a wide range of skills (perhaps not sales!)
Step 2 – Decide what you are selling
It is much easier to sell the outcome than the process. Clients are most willing to pay when you can take them to a point at which value is genuinely created:
Acquiring another company
Make clear the value that you generate, for instance, Felix Velarde has a simple statement of “I will treble your revenue in two years”. Others have simple tag lines on LinkedIn and on their business cards.
Step 3 – Be seen
If you wish to be a successful consultant, then the only methods of marketing that work are those based on physical presence –
Speak in public
Ask for one-to-one meetings
Be recommended by a friend
Theoretically, videos, podcasts, and books can increase sales leads, but they have significant overheads and very few solo practitioners are able to use them. Where there are small groups of consultants, or the consultant is part of a larger organisation, then these can be extremely valuable.
All CFOs make the mistake of engaging with the client and then allowing their pipeline of Leeds to fall away. The 80/20 rule will really hold as regards doing work and generating the next set of clients.
Contacts can generate leads for 30+ years. Be nice to your network.
Step 4 - Start on the right foot
The critical factors on arrival in a new client are:
The establishment of trust
Matching or complimenting with the culture
Understanding the real OKRs and KPIs that will create stakeholder value, and driving them from day 1
Once those are in place, the rest of the CFO role can be made process-based:
Focus everybody in the business on serving the customers that they have and can reach
Cover all the internal hygiene factors with one or two people who do not distract everybody else
Keep fundraising and corporate actions away from the team which are driving sales and revenue
Never lose sight of the need to simplify, cut out the deadwood, remove underperforming staff, and remove friction internally
Never miss a deadline for numbers
Translate the numbers into real-world events and actions
This will leave you time to engage on a human level with the CEO, which is when your strategic value-adding powers really get seen.
Step 5 – Stop selling the hours
The aim in the medium term is to put your product in a box (as far as possible) so that you are not selling your own hours. This is very difficult for most finance people, but some areas can be privatised:
Write a book
Written down processes built into software
Timetables and calendars
Algorithms and heuristics
Online digital training
Interim and consultant roles are offered at £500/day to around £1,500/day. That isn’t reasonable recompense for 20 years’ experience and the ability to create £50m+ for other stakeholders.
Take equity whenever you can. Options or stock. Take it and hold onto it.
Top CFOs and consultants in the sector are charging £3000-£5000 per day +100% success bonuses. (Obviously, the success bonus comes only on success!). This makes it worth getting out of the crowd and into the top division.