Oct 11, 201209:48 AMMad @ Mgmt
with Walter Simson
The CFO checklist
I have been hearing about continued signs of economic improvement. Clients are reporting stable, even improving orders. But a more subtle, but important, issue is staffing. Recently, I heard from Dorothy Ramsey, a Milwaukee-based CFO of a specialized retailer. She is also a director and career services chair of the local chapter of Financial Executives International, the premier association for CFOs. “Staffing demand is up at all levels, especially for the staff accounting jobs and first-line managers,” she says. “The majority of CFO placement requests are coming from the manufacturing sector. This is a relatively new phenomenon in Milwaukee, at least as compared to the recent past.”
(I can corroborate the manufacturing anecdote to this extent: Recently, on a flight from Milwaukee to New York, I met a trio of British engineers on a buying trip to the U.S. They loved their supplier; praised the quality, service, and pricing; and said they felt ill giving the work to China.)
Then, a CEO of a Southern manufacturing company asked for thoughts on what kind of CFO he should recruit. He had a longtime controller, and the bank and board thought that with the growing business, more talent was necessary.
I gave him, via a brief email, some thoughts on how first-time CFO-buyers might decide what kind of CFO to hire. The idea is for the CEO to go through the mental checklist of qualities that would help his or her private company. The list is graded generally from lower skills, such as recordkeeping, to higher ones, such as M&A and deal-making.
I thought, in the spirit of hoped-for growth of CFO hiring, I would reproduce those thoughts here …
CFO Needs Assessment
This measures the principals’ perceived needs, not the CFO’s current capabilities.
Please rate the degree of your need as Low … Medium …
1. Accounting, controllership, and reporting.
A) Knowledge of accounting principles, ability to close the books and records for accurate view of the past performance.
B) Risk management, insurance and protection of assets.
C) Interaction with auditors or accountants.
D) Budgeting and tracking; understanding variances; publishing reports.
2. Operations Management
A) Costing, workflow, vendor qualification; construction or rental oversight or negotiations.
B) HR functions; remote site management; import or export functions.
3. Banking and Finance
A) Interaction with a bank or banks; negotiating deals; projecting growth and new money needs.
B) Finding new sources of financing; selling a "deal"; preparing a stock sale.
4. Strategic Management
A) Advising the principals on internal operating trends; discussing the needs of the operation with internal peers to anticipate and resolve profitability issues; "seeing around corners."
B) Tracking competition; understanding the market; pricing; customer wants and needs; measuring marketing effectiveness.
C) M&A, both buying and selling; enterprise valuation principles.
D) Seeing the company as a portfolio: core products, core customers, driving positive change from deep understanding of the firm's economics.
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