CEO compensation is one of those areas companies want to get right, especially if it means avoiding the ire of customers or the wrath of a Board / Shareholders. It makes sense.
What about measuring CFO performance? Does anyone really care? Hopefully the Finance Chief cares, since his measurable contributions can not only drive his current pay but future pay with a new company.
Rarely – very rarely – do my CFO clients have a written record of their measurable impacts when we begin working together. For many of them, recognizing the importance of those measurables is akin to a V-8 moment. When the light bulb goes on, suddenly it all makes sense.
And I’m not just talking about a listing of measurable results. I’m talking about being crystal clear in all your marketing messages and documents about your ability to understand the problem (the pain factor), create a strategy to solve the problem (you are hired for your problem-solving skills), and then, your documented record of executing the initiative through to both a bottom-line impact and a longer term strategic positioning.
You might be valuable … but when you start with the pain factor, your value increases exponentially.
Tracking your ability to impact often affects your current pay, but it can also greatly increase your negotiating power when you make the decision to move.
Cindy,
You would think CFOs would be able to do the math and understand that their success can only happen if he or she is adding value to the company.
You would also think that CFOs would understand the math that the more they increase their value as a CFO for themselves, they are adding value to their employer as well.
So why do few CFOs understand this math?
Samuel Dergel – The CFO Expert
Director, Executive Search
Stanton Chase International
http://blog.dergelcfo.com
Great question, Samuel!
Paid for performance is always a hot button issue, especially for a public company. Thanks for sharing some additional insight into the issue.
Cindy:
Nice work!
Andy
Thanks Andy!
You are right in your belief. Paid for performance is a valid issue and concern among CFOs. However,there are companies who do not get it right because on the belief that CFOs are just bean-counters. CFOs’ are beyond math. Their involvement in strategic planning, problem-solving skills add value to themselves and to the company as well.
Thanks for your thoughts, Emmanuel. You are right … CFOs are merely bean-counters no more!
Emmanuel,
It may be too easy to blame companies that think their CFO should be a bean-counter. The other side of the coin is that there are too many finance professionals with the CFO title that live up to the ‘bean-counter’ stereotype.
In my experience, companies hire exactly what they are looking for.
Regards,
Samuel Dergel – The CFO Expert
Director, Executive Search
Stanton Chase International
http://blog.dergelcfo.com
Cindy,
Given that a lot of organizational efforts are team sports, it is sometimes difficult to measure the value contribution. A comment or question in a weekly team meeting might well be the domino that starts an important innovation or solution, yet on reflection few would attribute the results with that interaction.
Any suggestions on how to tease out the CFO’s measurements when there are 5-7 others in the same boat?
David, were you on my last Proformative webinar? It might be a good starting point for how to think about your value contributions.