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You are here: Home / Archives for Investors / Private Equity

October 17, 2011 By Samuel Dergel 2 Comments

Does a Small yet Growing business need a CFO?

You might think that given what I do, I would say “of course”.

I recently read a great piece by Janine Popick in the Huffington Post called Small Business CFOs: Do You Need One? In this article, Janine discusses the personal story of the growth of her company, Vertical Response, the challenges they faced as they were growing, and not having the right finance resources when they needed it.

Janine’s honesty is refreshing. She mentions that there were numerous times she needed to take decisions to bring on the right finance resources, but her concerns of cost overrode her need to build value. She also admits there were things she did not know.

The fact is many entrepreneurs of growing companies face the same issues. And make the same mistakes. I highly recommend this article to any entrepreneur who is building a growing business.

So, does a small yet growing business need a CFO?

If the business is small, growing and simple, I would say no.

If the business is a complex business (where revenue is not a simple formula, where there is innovation in the product or service and where new investment is needed regularly to accomplish success) I would say yes.

My recommendation to entrepreneurs of growth companies is: If you’re not sure, there are people you can ask. You can approach an entrepreneur of a successful growth business (like Janice) for their input. You can seek advice from the people that have invested money in your business (or people you hope will invest money in your business) for input.

Or, as one entrepreneur did last week, you can ask me.

Related Blog Posts:
More companies are ready for their first Real CFO
CEO and Investors: Are you ready for your First CFO?
New CFOs and the Entrepreneurial CEO – How to make it work

Filed Under: All of Samuel's Blogs, All of Samuel's Blogs, All of Samuel's Blogs, Board, Board, Board, CEO, CEO, CEO, CFO, CFO, CFO, CFO Consulting, CFO Consulting, CFO Readiness Program, CFO Readiness Program, CFO Readiness Program, CFO Relationships, CFO Relationships, CFO Search, CFO Search, CFO Search, Courage, Courage, Courage, First CFO, First CFO, First CFO, Investors, Investors, Investors, IPO, IPO, IPO, VC, VC, VC, Venture Capital, Venture Capital, Venture Capital

October 5, 2011 By Samuel Dergel 4 Comments

New CFOs and the Entrepreneurial CEO – How to make it work

I have been privy to viewing (from near and far) many successful entrepreneurial businesses over the last 20 years. I have always been fascinated by how one person (or a small group of people) can create an amazing business out of nothing. It takes a certain type of individual to have the motivation, drive and skills to be a successful entrepreneur.

I have also seen many entrepreneurial companies reach a ceiling on their growth potential. The management structure and style that has made them the success they have become can no longer support continued growth without a radical change in how the company is run.

This inflection point is where it can continue its growth and success.

Or it can all fall apart.

It is at this time that the Entrepreneurial CEO, driven by his or her own logic or by outside forces (usually external investors), understands that he or she needs to hire a Real CFO.

I have been called in to situations like this to help with the CFO Search. The biggest challenge CEOs face at this inflection point is emotional, not logical.

A recent article by Alix Stuart in CFO.com called How to Avoid Power-Hungry Bosses discusses this issue, and provides a 7 point check list on how to avoid a “Control Freak CEO.”

From my vantage point, the challenge for CFOs as they assess new and exciting opportunities is more than just avoiding difficult situations. The challenge is: How does a new CFO “make it work” with an Entrepreneurial CEO on the cusp of major change?

In essence, the company needs to be ready for a Real CFO. For an outside CFO candidate on the verge of accepting an offer from a growing company, this is difficult to assess.

The Question for the incoming CFO is: Are they ready for a Real CFO?

The Question for the Entrepreneurial CEO is: Are we ready for a Real CFO?

For companies facing this important point in their growth, I always recommend our CFO Readiness Program.

You can learn more about our CFO Readiness Program by reading our blog – CEO and Investors: Are you ready for your First CFO?

If you are a New CFO getting ready for (or having just started) a new role in a growth company with an Entrepreneurial CEO at the helm, you need to learn more about how this CFO Readiness Program will help you help your new company.

If you are an Entrepreneurial CEO that knows you will be facing an uphill battle in the move towards a more corporate structure, our CFO Readiness Program will equip you and your entire team to make the shift with more impact and less pain.

If you are an Investor in (or on the Board of) an Entrepreneurial Growth Company on the cusp of change, investing in CFO Readiness will take the guessing out of making the shift to the more corporate environment that will make you sleep better at night.

So, how does a New CFO “make it work” with an Entrepreneurial CEO on the cusp of major change? With the CFO Readiness Program.

Filed Under: Uncategorized

September 7, 2011 By Samuel Dergel 6 Comments

CEO and Investors: Are you ready for your First CFO?

Companies in growth mode face great challenges. One of the biggest challenges a growing company faces is bringing in their first Real CFO.

In a previous post we reviewed an article written by Emily Chasen in the WSJ CFO Journal about how More Companies are Ready for their First CFO.

A growing company built on entrepreneurial spirit can only continue to grow so far on that spirit alone. At a critical juncture in the life of a growing business, it needs to make a transition from decisions made by the entrepreneur alone to a dynamic team that works on a business model of delegation of responsibility and co-operation between interests within the company.

This is an inflection point for many successful growth companies — when a CFO is recruited because the management disciplines that grew the enterprise to its current state will not be enough to take it to the next level.

Intellectually, the CEO and other key managers may know things need to change.  But that doesn’t mean they’ll be comfortable with a CFO who asks tougher questions, instills new disciplines or has a fiduciary responsibility to the investors as well as a loyalty to the management team.

So, what is the answer?  How do you strengthen CFO readiness when the next level of success takes people out of their comfort zones?  Courage.

That’s why we developed our CFO Readiness Program in conjunction with Dr. Merom Klein & Dr. Louise Klein, leaders of the Courage Institute.

The Courage Institute wrote the book on The Courage to Act — about 5 Courage Factors that equip effective leaders to challenge the status quo, champion new possibilities and get traction on breakthrough ideas and improvements. This is the foundation of the CFO Readiness Program.

The CFO Readiness Program is an assessment, feedback and action planning program that works to equip  the entire executive team to:

    • Strengthen and align your veteran executives — so they have the courage to welcome new thought-leadership and collaboration
    • Clarify your wish-list of expectations and priorities for the new CFO
    • Prepare for healthy debates and challenges to “the way we have done things here” as the new CFO identifies new opportunities
    • Equip the new CFO to conduct an independent assessment of your enterprise’s infrastructure, financial well-being and resources
    • Ensure career paths and mentoring opportunities for the finance executives who brought the enterprise to its current level
    • Identify fears, sensitivities and bridge-building that the new CFO could face — and ways to build courage to lift performance
    • Lift courage to embrace and accelerate change to get traction on new metrics, new ways of working and new ways to ensure regulatory compliance and good investor/board relations
    • Identify debates, deferred decisions and risk factors that the new CFO will face — and the input desired from the new CFO
    • See how to move past rivalries, turf-issues, personality clashes and other fear-inducing courage inhibitors that can reduce luminary efficiency at the executive and middle management levels
    • Invite scrutiny and transparency to sharpen up team thinking
    • Navigate matrix structures, networks and alliances — where it is not clear “who is in charge” or “who settles which debates”
    • Overcome fear and reluctance — as veteran members of the executive team are asked for courage to share decision-making discretion and authority with a new CFO

To receive a copy of our brochure and find out more about how our CFO Readiness Program can help your company, please complete this form:

[contact-form subject=”CFO Readiness Program” to=”[email protected]”] [contact-field label=”Name” type=”name” required=”true” /] [contact-field label=”Email” type=”email” required=”true” /] [contact-field label=”Position” type=”text” required=”true” /] [contact-field label=”Company” type=”text” required=”true” /] [contact-field label=”City” type=”text” required=”true” /] [contact-field label=”State / Province” type=”text” /] [contact-field label=”Country” type=”text” required=”true” /] [contact-field label=”Phone Number” type=”text” required=”true” /] [/contact-form]

Filed Under: Assessment, Assessment, CFO Coach, CFO Coaching, CFO Compensation, Executive Coaching, Finance Team, Hire your Next CFO, Hire your Next CFO, LinkedIn, OnBoarding, Onboarding, PE, PE, Public Company, Public Company, Real CFO, Real CFO, Successful CFO, Successful CFO, Team Structuring, The Strong CFO, Training and Development

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