Evolution of the CFO

Evolution of the CFO

Stereotype of number cruncher has moved on to become key player with tech-savvy acumen BY COLE EPLEY

The chief financial officer has come a long way from being an organization’s chief bean counter to being i a diversified asset with intimate understanding of a company’s human resources, compensation and benefits structure and, increasingly, the technology that ties it all together.

A November 2011 survey by Robert Half Management Resources found that 44 percent of CFO respondents reported they had become more involved in technology related decisions, thanks especially to information technology and company finances becoming more closely entwined.

“Generally, the old stereotype of the accountant was that it was a green eyeshade wearing number cruncher that was more of a gatekeeper or a tracker of historical information,” says Dan DeNisco, a senior vice president at Robert Half. “That is certainly not the case today”

Perhaps now more than ever, DeNisco says clients are looking to do more with less. And as companies continue to evolve, so does the CFO. The post-financial crisis in banking and finance and health care reform have created as many opportunities as they have obstacles for success within the sectors, and a CFO with acumen can make all the difference.

Joe Fracchia, a partner in the Memphis office of executive recruiter Vaco, says ever-changing regulatory matters are contributing to the new shape of organizations’ top financial executives.

“These executives are having to get more involved in compliance matters, both from an operations standpoint as well as a public relations standpoint,” he says. “CFOs have to be more involved in those discussions about how much risk to take, keeping in mind both penalties and what happens if a company’s name shows up in the paper.”

But for companies looking to fill the post, knowing what is needed and actually getting it can be two very different things. Small businesses, especially, may not have the required capital for a full-time CFO, so they are forced to either make do with what they’ve got or get creative in finding solutions.

Tony Armstrong, owner of Armstrong Transportation & Trailers LLC, reached out to Kevin Campbell, a partner with B2B CFO, to satisfy his growing company’s need for a deft financial executive about two and a half years ago.

“I had been in business for almost 11 years before I brought Kevin on,” Armstrong says. “Once we got about $10 million (in annual sales), we started requiring more precision and planning.”

Campbell functions as a virtual CFO-for-hire for small businesses that need a dedicated financial executive, but either don’t have the capacity to hire in-house or realize they need one in the first place.

“What I’ve seen is business owners have started a business, have gotten it off the ground and everything is great, but at some point in their growth, it becomes basically impossible to keep their hands on every aspect of the business,” Campbell says. “They get mired down in the minutiae of the business.”

Steve McGhee, president and owner of Bartlett-based Special Event Service & Rental Inc., found himself in a similar position to Armstrong’s. His company is nearly 20 years old and has grown from a home-based business to one that now occupies 24,000 square feet on 10 acres.

“Managing cash flow got to the point where it was more than we could take on and certain things just continued to faU through the cracks,” McGhee says. Bringing Campbell on as a contracted CFO has helped the company continue its growth trajectory, but the inclusion of a perceived outsider was met with some reluctance at first.

“We had a lot of interest in bringing someone on (as CFO), but we were a little apprehensive,” McGhee says. “It was hard to think about opening up and letting someone else have access to those things that were so closely held between a few of us in the company”

The benefits, however, have far outweighed any remnants of apprehension, and Armstrong says he’s seen his banking relationships improve because of the company’s increasingly healthy financial accountability

“Bankers are able to come in and see what we have going instead of just having to take my word for it,” he says. “We can bring them in and show them the results of what we’re doing and that has helped our relationships.”

Both Armstrong and McGhee plan to continue their work and growth with Campbell on board, but the position will continue to evolve much as it already has.

“One thing needed for all this to work are the soft skills, or the people skills, so the CFO can communicate with various personalities,” says Robert Half’s DeNisco. “The soft skills are equauallyy important and as the position evolves, you’ll see the CFO become more involved on the operational and soft-skills side.”

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