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November 2, 2015 By Samuel Dergel Leave a Comment

Good news CFOs: The Future of Finance Looks Bright (But Only if you Plan and Act)

A new research report released today by CFO Research and sponsored by SAP shows that while Finance has improved a lot over the past years, there is plenty of opportunity to Finance to deliver more value to the organization.

The report, Thriving in the Digital Economy: Four Reasons Why Finance Is Excited About the Future has four key findings that CFOs, senior finance executives and board members will find of significant interest:

Finance professionals are embracing their influence in their enterprises—and looking forward to a bright future as their profession evolves.

The good news is that finance professionals are more influential than ever in their organization, and have opportunities to go beyond core traditional areas of ‘old’ finance. The biggest challenge with this opportunity comes from ensuring that talent with leadership potential in finance can grow beyond the core additional areas.

The organizational scope of the finance function—already broad— continues to expand to encompass risk management, IT, M&A, and other key functions.

Again, as Finance becomes the central organizational address for all administrative and support functions within an organization, can the talent planning match this need?

Finance teams will be challenged to fulfill their core performance management mandate in the face of rapid change and greater business complexity.

High value-add within finance can only happen with the right people, processes and technologies in place, especially as business gets more complex and change continues at a faster pace.

Finance professionals see the rising wave of digitalization and automation as the key to their ability to partner with the business to manage performance.

In a conversation with Thack Brown, general manager and global head of Line-of-Business Finance at SAP, he said that the impact of technology opportunities (digitization and automation) will radically change how the transactional part of finance is being managed, even by those following current best practices.

Stay tuned as I will be sharing parts of my interview with Thack Brown. The insights he offered were fascinating, and combined with this report, provides excellent food for thought for the CFO who is looking to be the best business partner possible to their organization.

January 28, 2015 By Samuel Dergel 1 Comment

Analytics, Shmanalytics? Why the CFO should care

The office and the role of the Chief Financial Officer continues to evolve.

This evolution may cause apprehension in some seasoned CFOs. These experienced financial executives feel this way because, in part, they have worked very hard to get to where they are. They believe that their past experience and success should speak to their future opportunities.

Yet for any executive, especially one in the finance side of the business, resting on your laurels is so 1980s.

The world is changing at a rapid pace, and the business world is either leading this change or trying hard to stay ahead. Organizations that do not continue to stay relevant wither up and disappear into obscurity. Ditto for CFOs.

Cindy Kraft, a CFO career coach, works with CFOs who want to stay ahead of the curve in their career. I like her work, and am always happy to refer senior finance executives to her. As a fellow blogger, she and I agree most of the time. In recent posts (here and here) she discusses technology and its relevance to CFO careers.

The statistics from Cindy’s questions on whether technology should be in the domain of Finance is interesting. I believe the results would be more telling if there was corresponding information on company size. From my experience, companies of a smaller size have CFOs responsible for IT, while larger companies have an executive in charge of Technology.

From my vantage point, CFOs who are able to stay ahead of the changes in the business world, including technology, are able to continue to stay relevant and add value.

So why does Analytics matter to the CFO?

In my book, Guide to CFO Success, I ask and answer “What is a Chief Financial Officer?” in the first chapter (you can preview a copy of Chapter One here). To summarize, I say that a CFO is a Strategist, Leader and Advisor.

Corporate value comes from making great decisions. Decisions based on analysis rather than gut is where Finance and the CFO have the ability to make a difference at the executive table. Technology is just a tool that helps intelligent people make great decisions.

CFOs need to be a Strategists, Leaders and Advisors to their businesses. If a CFO is not helping the company make decisions and adding value to the organization, they are not a Strategist, not a Leader and not an Advisor. In essence, they are not a real CFO.

To continue to be a real Chief Financial Officer today, you need to be able to help your organization make the best decisions possible.

The term Big Data has been bandied about as the cure-all for corporations. Technology vendors are very happy to use the term to get attention and their portion of corporate spending. But data itself is not enough, no matter how big the data is.

The Data Value Chain illustrates that data is only the beginning. It is the usable information that is pulled from this data, viewed through the lens of intelligence, either human or artificial (or both), that wisdom can be obtained.

As CFO, it is your duty to provide wisdom to your organization. This wisdom will lead to the creation of corporate value. Analytics is the point where you turn all that data into valuable decisions.

If you’re not providing the wisdom you would like (or think that you should) to the rest of the business, understand why that is.

Is it because…

You do not have the tools?
You do not have the people? Or,
You do not know where to start?

As CFO, no one expects you to be intimately aware of the available tools and be able to analyse this yourself. However, as CFO, you are only as good as your finance team allows you to be.

As CFO, no one expects you to choose the right analytical tools by yourself. As CFO, no one expects you alone to do the analysis necessary to come to great decisions. However, as CFO, you need to make sure your team can support you in this value added activity. As CFO, understand the power of these tools and information yourself of what they can do. Then you need to guide, lead and develop the team necessary to do so.

I had the pleasure of meeting RK Paleru at the AICPA CFO Conference last May. RK is the Analytics guru (Executive Director, Systems Analytics and Insights Group) to the CFO at George Washington University.

RK blogged about an article I shared with him about the idea of companies hiring a Chief Analytics Officer. While I do not think that most companies are ready to create another seat at the executive table, I do think that Analytics can add tremendous value to the executive table. I am certain that the CFO of GWU thinks that the analytics that RK does bring tremendous value to the CFO, as well as adding significant value to the institution and its mission.

Anders Liu-Lindberg wrote recently about his take on Analytics within the finance function. Anders, from where he sits in his role as Regional Finance Business Partner at Maersk Line, sees corporate value ONLY IF the talent team is built properly within finance is able to partner with the generalist functions. Finance should act as a true business partner to the business, helping make decisions at all levels of the business.

CFOs who do not continue to improve, change and learn will, as mentioned earlier, wither. Resting on laurels is career limiting.

If, as CFO, your response to “Analytics” is “Analytics, Shmanalytics”, you’re not only missing the boat, you’re doing a disservice to your employer and your team.

To remain CFO, both today and tomorrow, both within your company and at your next employer, understand the power of Analytics. Then, ensure you develop and nurture a finance team that can give you the wisdom to help your company make great decisions.

November 25, 2014 By Samuel Dergel 2 Comments

Do CFOs read e-books?

In a previous blog (Do CFOs Listen to Podcasts?), I mentioned that I polled my CFO Advisors on their content habits. Here is one more tidbit from this survey.

While CFOs may not be the world’s most voracious book readers (see Jack Sweeney’s LinkedIn Pulse post: Imagine Being a CFO Who Doesn’t Read Books: Welcome to the Bean Counters Club), when I asked my CFO Advisors what book format they prefer to read, 1/3 of them said they prefer to read an e-book, while the 2/3 majority prefers a real paper book.

Here are some comments from my CFOs about their book reading preference:

I don’t read many books.
Gradually making shift to e-book. Reading my first now & getting comfortable!
Use my iPad for many magazines, but like to highlight books and prefer feel of holding book.
Are you trying to make me feel old? It worked.
I like to highlight, etc.

When I began my journey writing Guide to CFO Success two years ago, I had never read an e-book. As I was about to become an author and my book would be made available as an e-book, I felt it was important to understand what an e-book was all about, so I bought an Amazon Kindle. Today, reading an e-book on my tablet or phone is my preferred method of reading, but I enjoy the senses that come from reading and handling a real book.

As the holiday season approaches, consider an e-book as a gift for your favorite CFO. You can tell them that Samuel says they should try it out and join their forward looking peers that are making their way through the digital age.

(I won’t tell them that a main reason you bought them an e-book was because they are very easy to purchase as a last minute gift.)

Happy Thanksgiving,

Samuel

February 4, 2014 By Samuel Dergel 4 Comments

The Sleepless CFO

Being Chief Financial Officer can be stressful. The responsibility that the CFO bears for the company they work for is not a 9 to 5 job. Most CFOs I have met and spoken with agree that the role takes up most of the hours they are awake, and even some of the hours they should be sleeping.

So what keeps the CFO awake in 2014?

To find out, I reached out to my CFO Advisory Group. My CFO Advisors were instrumental in providing me with relevant and realistic input as I wrote my upcoming book. Guide to CFO Success: Leadership Strategies for Corporate Financial Professionals is published by Wiley & Sons, and will be available at all fine bookstores end of March 2014.

I recently asked my CFO Advisors what top their top 3 concerns that keep them awake at night. After reviewing their responses, here are the top 3 current issues that are keeping CFOs from getting a good night sleep.

#3 – Team

CFOs are worried about their team. Some CFOs are concerned about how to continue to grow and motivate their staff. Others are losing sleep worried about retaining the staff they need or dealing with the aftermath of unforeseen resignations. There are some CFOs who are unsure of how they will succeed in acquiring and developing the new talent they need to make their team even better.

Regardless of the type team based challenges facing the CFO, they know that they can only be successful if their team is strong enough to support them. When the finance team is not giving the CFO what she needs to succeed, this can cause anxiety and sleeplessness for even the most experienced CFO.

#2 – Growth

Growth can be an issue for many CFOs. Or, rather, the lack of growth is the real issue. Most for-profit companies define success as making more money, and for the Chief Money Counter, growth drives corporate financial success. It is the Key Performance Indicators of this growth that informs the CFO if the company will reach their targets or not.

When companies are continually growing their revenue and profit, all is good. Few companies though, do this regularly and consistently. Financial success for most organizations can only come when sales rise and profitability continues an upward trend. For the CFO, who knows they are king when the results are good, and the court jester when the results aren’t, losing sleep over growth is understandable indeed.

#1 – Cashflow

Cash is King. The ultimate responsibility of whether there is enough cash to do what needs to get done rests with the Chief Financial Officer (even when their team does the technical work). CFOs are concerned with cash from all sides, whether they are collections issues, access to capital and lending or how to make decisions about allocating cash in the most effective way.

Cash is, by far, the most common issue that is keeping my CFO Advisors awake at night. What is interesting about this response is that cash was a concern for most of my CFO Advisors, yet they all come from different industries and company sizes. It seems that cash issues are a challenge in most, if not all companies. While the type of cash challenges will certainly change based on the situation facing a company and its industry, most companies, and therefore most CFOs, are anxious and losing sleep over cash.

What is keeping you awake at night?

February 5, 2013 By Samuel Dergel 4 Comments

I’m writing a book for CFOs. You’re invited to participate.

I previously announced that I will be writing a book. I’m pleased and excited to announce that I signed a book deal with Wiley!

The book I will be writing, which is tentatively titled A Guide to CFO Success: Leadership Strategies for Corporate Financial Professionals, targets CFOs (and future CFOs) who want to invest in strategies to become better and more successful financial leaders.

As I enter into the heart of writing my first book, I am interested in feedback from CFOs like you that have achieved success and are interested in sharing with their peers the important things they have learned on their personal road to CFO success.

To this end, I am creating an advisory group of accomplished senior financial professionals to advise me on questions I will have, as well as feedback I will need, when writing my first book for CFOs.

Members of this Advisory Group will be sent an email when I have a question for them, and will be able to provide their answers in an online survey format that will assist me with accumulating their answers.

Each member of this Advisory Group will be mentioned and thanked publicly in my upcoming book. Any feedback you provide me with in this process will remain completely confidential.

To apply to join Samuel’s CFO Advisory Group and make a difference to your peers, please sign up here.

I’m looking forward to working with you,

Samuel

January 31, 2013 By Samuel Dergel 13 Comments

Why do CFOs Leave?

What does it take for a CFO to move on in their career?

We asked this question to CFOs in January 2013 and had over 150 responses to this question.

The responses shown in the graph give a good indication why CFOs leave.

What I found more interesting (and personal) was the detailed reasons given below.

Board decided they wanted a different profile CFO
Corporate consolidation/restructuring
Board forced new CFO, CEO resisted then succumbed, I was hired as new CFO, CEO made life tough for me, I offered resignation after 2 years.
No more personal growth potential
I resigned due to a desire to relocate to another state
I was with my former employer for twelve years as their CFO. Owner’s son got married and needed a job. The owner decided to give my job to his son.
Company changed direction in terms of exit strategy.
unsustainable business model
It was apparent that the foreign founders wanted to re-domicile the company to their country of residence, so I began evaluating other opportunities.
Disagreement over revenue recognition policy
moved management positions to a different city
After selling controlling interest to PE I did not adapt fast enough to PE requirements vs. family owned prior to sale.
Left to start a consulting practice.
Retired
Sold the Company
No opportunity for equity
Company moved HO to another country.
Internal restructuring, consolidation of back office functions
Lead the restructuring process with CEO, which transformed the company to service a specific market, eliminated all C-Level positions.
Get bored quickly
Was resigning regardless of another opportunity.
It’s complicated – but in essence, I was no longer effective as CFO there.
I did the restructuring and elected to leave due to lack of opportunity and company prospects.
Poor fit
Disagreement with CEOs strategy or lack of it…
New CEO (2 responses)
The wife of the president was involved in the company. she often disagreed with the president’s decision
Controlling interest taken by Venture Capital Firm who in turn brought in new BOD and New Executive Team
One of the partners was creating major issues as he wanted to significantly modify the business model. His disagreements were also with our lender, which was creating cash flow issues.
Various reasons not listed above. No longer felt like it was a fit for me professionally.
Under resourced
Interim CFO role

Interesting food for thought, isn’t it?

What do you think about the results of this survey?

September 20, 2012 By Samuel Dergel 8 Comments

5 Reasons why Talent Development is a Challenge for CFOs

Ever meet a CFO who wasn’t busy? I didn’t think so.

CFOs have lots of demands on their time. Unfortunately, when CFOs do not manage their priorities properly, they can end up with surprises.

As someone who has received calls from CFOs in a panic when a key person on their team has left, I can tell you that this happens too often.

If you haven’t seen my CFO Relationship Map, you should. A premise I have made time and time again is that a CFO needs to be able to manage all their relationships. (You may also be interested in reading my other blogs on the topic of Talent Management.)

Ensuring the success of the Finance Team is as important as meeting the demands of the CEO and the Board. Without a Strong Finance Team, the CFO will not be able to meet these demands.

I recently spoke with Mary Driscoll from APQC about their recently released results from their survey A New CFO Priority: Talent Development with a Focus on Soft Skills. This report , created in conjunction with EPM Channel, details how proactive CFOs are evolving their talent development programs so that Finance can excel at the strategy table.

(To view the report, you need to sign up with APCQ. You do not need to be an APCQ member to read their report.)

The summary findings of the survey are as follows:

There is a staggering gap between the potential value that the typical finance organization can deliver to its stakeholders and the value now being delivered.
The gap exists because finance is bogged down in transactional work and doesn’t have the time needed to produce meaningful analysis.
It is hard to add bandwidth because finance, in general, is not given the tools needed to increase productivity and free people from grunt work.
The toughest vacant positions to fill are for financial planning and analysis.
Finance people who are considered effective business partners tend to work for CFOs who have a strong commitment to professional training, including crucial soft skills such as persuasive presenting.

When I spoke with Mary Driscoll, she provided me with this interesting perspective. “Unfortunately, too many CFOs fail to make a commitment to the development of their finance talent. Many say it’s hard to devote time and budget to creating a sustainable program. Some, quite frankly, don’t see the point. But those CFOs are shooting themselves in the foot,” says Driscoll. “They’ll be sorry when the day of reckoning comes and top people walk out the door for lack of professional growth opportunities. All I can say to the CFO who lets this happen is ‘Shame on You!’”

Are you a CFO that has implemented a talent development plan of your finance team?

Do you need help with your finance talent attraction, development and retention?

December 8, 2011 By Samuel Dergel 7 Comments

Executive Search: Do CFOs understand the difference between Cost & Value?

Last week I wrote 4 Reasons you should use an Executive Search Firm when hiring your CFO. Cindy Kraft brought to my attention a poll that was running in SmartBrief for Finance. These are the results of the poll.

I agree with Cindy’s analysis of the poll results. I find it interesting that it is OK for CFOs to call every Executive Recruiter when they are looking for their next opportunity, while close to half of those polled don’t see the value in using a Search firm when they need to hire.

Can’t say I’m surprised by the results.

I love CFOs. Heck, they are my favourite people.

Except.

Except too many CFOs worry too much about cost, and not enough about value. Unfortunately for these myopic CFOs, this statement applies not only to recruitment, but to many major decisions that they take as a CFO.

Another point I find interesting is that while 30% of CFO see the value in Executive Search, 1/3 of these CFOs don’t know how to sell the value proposition internally.

To the people that responded to this poll, here is my feedback for you based on your answer:

Yes, but I’m not sure there is a worthwhile ROI: Then you haven’t asked the right questions or your search firm isn’t explaining the value of the services you are reluctantly paying for. Either ensure you get value for the search mandates you give them, or work with someone that will give you value.

No, and we do just fine recruiting top talent without them: Congratulations on this accomplishment. Hiring top talent isn’t easy. Be aware that you could be hiring mediocre talent thinking they are top talent. Also keep in mind that while you may be able to attract top talent in some areas of your company, you may still need to hire using an executive search firm for key roles.

Yes, and they are worth every penny to get top talent: I love you. Call me at +1 (201) 961-0838 for your next executive search to receive even more value than you are getting now.

No, but I wish we did: If you took this poll and answered this question, email me to let me know WHY you wish you did.

Thank you Cindy for bringing the poll to my attention (It was in my email inbox, but I didn’t get to reading it). And if you are a CFO and you are not signed up for SmartBrief for Finance, you really should be.

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November 22, 2011 By Samuel Dergel 6 Comments

Why can’t finance and HR just get along?

This blog is a Guest Commentary written by me that appeared in Canadian HR Reporter on November 21, 2011. You can view a copy of the original article here.

Why can’t finance and HR just get along?

Finance and human resources have more in common than they care to admit – here’s how HR can improve its relationship with the CFO

I have been fortunate enough in my career to deal with organizational leaders in finance as well as human resources. For as far back as I can remember, I have noticed the friction that exists between these two groups and it has always fascinated me.

Finance and HR have more in common than they care to admit. The CFO’s role is to manage the financial assets of the company while the CHRO is mandated with managing the company’s human capital.

Both finance and HR are important support functions for any enterprise. However, neither finance nor HR drive revenue — they support it. In organizations where finance and HR work well together, they provide solid support to corporate objectives.

The biggest point of this interdepartmental friction comes from the intersection of their interests — HR deals with people, whose costs are usually the largest expenditure in a company, while finance is mandated with managing costs.

So why can’t finance and HR work well together? The truth is they can — it just takes effort from both sides to make the relationship work.

Here’s a rundown of what HR professionals can do to improve their relationship with finance:

Communicate: A CFO needs to understand what you do, how you do it and how you can help her. HR needs to be proactive to understand the needs of the CFO and work together with her to provide appropriate solutions.

It sounds simple yet how many HR groups really have an open and effective line of communication with finance?

Treat finance like a business unit: A successful CFO needs a strong team to support him to meet objectives. As an HR professional, you understand what is involved in building, developing and sustaining a solid team, so help the CFO in his quest for having the most efficient and effective team. This is one sure way to get on the same side as the CFO.

Give finance what it wants: In the spring, my firm conducted an online survey of 40 CFOs to find out if they were willing to commit internal resources for the development of their finance teams.

More than one-half (56 per cent) said they want support for succession planning, 83 per cent want help with talent management and 94 per cent want a more effective and efficient structure for their finance team. We asked them if they were willing to invest resources in these areas and the majority of them said yes. Who can better solve these challenges than human resources?

Finance training: Ask your CFO to help develop the financial literacy skills of the HR team. Imagine the synergy that can exist internally when your team better understands the financial aspects of the business, how it applies to the corporate objectives and what it means within the context of delivering strategic and tactical HR functions.

These are just some examples. To make the relationship with finance work, HR needs to take steps to build relationships — with the focus on adding value.

Do you have examples of how you were able to bridge the divide between finance and HR and have a positive impact on your organization?

August 25, 2011 By Samuel Dergel 5 Comments

Does a CFO need a PA?

A recent article in CFO World UK (The bottom line on time management) got me thinking about CFOs and Personal Assistants (PAs).

Personal Assistants (formerly known as secretaries) used to be standard for senior level executives in companies of all sizes. With the advent and proliferation of computers and personal devices to assist with communications and scheduling, many executives have taken control of their own agenda and their own communication methods.

So the questions that need to be asked in the current world we live in are:

Does a CFO need a PA? [polldaddy poll=5451855]
If a CFO needs a PA, why? [Share your comments below]

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