Here at CFO Growth Advisors (CGA), we’re very proud of our role as an outsourced CFO service for small businesses and startups in the San Francisco Bay Area. Unlike most other outsourced CFOs who are often glorified accountants, we’re eager to create insights and drive results on both strategic and operational issues.
An article last year in the Wall Street Journal illustrated how CFOs of large, public companies are also becoming more deeply involved with their companies’ operations.
Here are some interesting excerpts from that article along with our comments:
“In one way or another, many of the most successful CFOs are heavily involved in business operations. They also tend to have a long history of setting strategy alongside their chief executive, according to an analysis of S&P 500 companies by recruiter Korn/Ferry International .
“Many CFOs want to be able to effect change at a company, set its course and influence its culture, said Bryan Proctor, head of Korn/Ferry’s financial-officer practice. To do so, they often have to be willing to roll up their sleeves and become a part of the business, not just an observer from the corner office.”
As we have often mentioned, the traditional days of the CFO being only the chief accountant are long gone. It is no longer sufficient for the CFO to be the bean counter. He or she needs also be the chief internal business partner to the CEO in terms of strategy and operations in order to improve sales, costs, margins, profits, and cash flow.
“Thomas Hirsch became CFO of Fiserv Inc. in 2006, just seven months after Jeffery Yabuki was named to the top job at the financial-technology company. The two put together a strategy focused on integrating companies acquired in the past, rather than simply remaining a holding company, Mr. Hirsch said.”
This is a case in point of the CEO and CFO at Fiserv working together to dramatically change the strategy of the overall company required intensive efforts at the operational level in order to integrate acquisitions.
“A similar change took place in the C-suite at Constellation Brands Inc., a beer, wine and spirits distributor. CFO Robert Ryder took the financial reins in 2007, the same year CEO Robert Sands came aboard. The pair realigned the company’s distribution model to gain market share for several key products.
“Previously, the finance chief’s position was focused on keeping the company’s books, Mr. Ryder said. He changed that, and now spends most of his time engaged with heads of the various business units. Mr. Ryder says he cultivated his operational focus during the 13 years he spent in the finance department at PepsiCo Inc., rotating through eight business units.”
The example given here of Constellation Brands reveals how the CFO was instrumental in improving the strategy and operations of the company’s distribution model. This kind of impact required the CFO to become deeply involved in the operations. This is also consistent with our experience as a CFO for a variety of businesses in different industries that it’s important to be able to a multi-dimensional, skilled, business leader and not just a finance and accounting person.