3 Essential Steps to Taking Over as CFO Effectively

Maureen O’ ConnellExecutive VP, CFO and CAO

Scholastic CorporationNov12th, 2014

Note: The views expressed here are my own.

Taking Over as a CFO

“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.  Here, 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 Business

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.

It is important for you to reconcile the analysts’ 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.

Step 2: Select

It helps to remember that you represent an opportunity for improvement.

The second you are crowned monarch of the financial function, you are expected to expound words of wisdom that will transform the landscape in your organization.

Within two quarters of the year, you will be required to show results. The challenge lies in choosing what to do now, what to save for later and what not to do at all.

Select your Victories

Like in Step 1, this process will start with listening. Conversations with your CEO and other executives would reveal a list of points you should address immediately and establish immediate victories.

Whether it is tax savings, cost control, increased profitability, technology implementation or talent upgrade – the opportunities are yours to exploit.

Select What Not to Do

Sit back and reflect upon tasks that have a low probability of success.

Perhaps some tasks will drain resources but add little or no value. It is possible they remained undone or were left on the back-burner intentionally.

Weed out such tasks and make the tough decision of letting them go. Instead, focus resources in activities that will yield results.

Select your Team

When you set about assessing the finance team, you might be surprised to know how much bright talent remains untapped and how much deadweight the business has been carrying over the years. Insist on retaining only the best – and do all you can to keep them happy and motivated. Reshuffle the non-contributors so they can do meaningful work, too.

You may have to perform the unpleasant task of letting a few of the least contributing members go – hopefully, to other departments in which they can thrive; sometimes, out of the business.

If done with unambiguous vision and empathy, this exercise could leave your team sharper and more passionate to achieve the clearly defined goals.

Select your Message

Now comes the time to make a critical move: communicating the agenda of tasks simply and clearly with well-defined roles for each key player.

The more critical the task, the clearer its guideline message needs to be.

From time to time, redirect your team towards this message so they remained aligned to the path you have charted.

Step 3: Change

In this step, you can optimally utilize resources and skill sets to finally deliver your agenda of change for the world to see.

One of the best ways to bring about change is by assigning the highest skilled and best performing team members to execute the most important priorities. This will not only improve your likelihood of attaining success but also distinctly showcase your commitment to improvement.

Step 3: Change

The secret to effective delegation, the type that brings desired results, is to have complete confidence in the delegate but take complete responsibility of checking that the task is done right. Faith and monitoring are the two scales of a perfectly balanced, flawlessly delivered task.

Finally, destroy the barriers to communication between various functions. Short yet frequent face-to-face meetings that measure progress, celebrate triumphs, rectify issues and chart out next steps are the best way to achieve this. The more the separate functions are involved in working towards common goals hand-in-hand, the more transparent and accountable they will be towards each other.

Finally…

Trying to implement these 3 steps will bring never-before demands on your time, abilities and patience.

Give the role your all; persevere through these steps within the short 6 months that you have to show significant results.

After all, nobody said taking over as CFO was going to be easy. But, then,  nothing worth achieving ever is.

Maureen O'Connell

Maureen O’Connell is the current Executive VP, CFO and CAO of Scholastic Corporation. When not working, Maureen loves running, Skiing, Scuba Diving or Travelling.