Business owners and CEO’s of small privately-held businesses are faced with multiple demands on their time. They are tasked with developing new markets, growing the existing market, keeping on top of changing technology, creating a healthy internal culture, communicating a consistent brand to the marketplace, developing and maintaining customer relations, making major financial decisions, developing business strategies, reporting financial results. The list goes on and on. A common role that a business owner will continue to play as the business grows is the role of Chief Financial Officer. One might think that this would be a natural role for the business owner to take on, and that it really is not as critical of a function to outsource or delegate.
So what really does a CFO do? And is it wise for the CEO to take on this role? Last year Mckinsey & Company published a report identifying four different profiles or strengths that a CFO brings to a business.
The Four Types of CFOs
1) The Numbers Person – This person loves crunching numbers and understands the internal workings of the company from a financial perspective.
2) The Strategist – This person typically has experience working in operations, marketing, and general management. They focus on tightly run operations and careful allocation of business resources.
3) The KPI Advocate – This type of CFO loves the scorecards. They look at performance metrics, cost reports and standardized data. To them, everything is measurable and there is often a strong focus on meeting or exceeding established goals.
4) The Growth and Development Wizard – This type of CFO generally have years of experience in mergers, acquisitions, private equity and venture capitalism. Their goal is to keep their eye on the prize of expanding the current business operations of the company.
It is challenging enough to find a trained CFO to bring all of these traits to a business, much less to expect the business owner or CEO to be able to effectively cover these all of these areas. Whether a company is big or small, there is generally great value in engaging a skilled CFO to come alongside the business owner to help guide, measure and monitor the company’s financial health.
http://www.mckinsey.com/insights/corporate_finance/todays_cfo_which_profile_best_suits_your_company