Top Finance Concerns

The CFO Rising conference yesterday morning was right up my alley with sessions on Creating Alignment in the C-Suite, A New Dynamic in the Boardroom, and … particularly … Finance Skills for a New Decade. My next few blog posts will talk about what I heard, but I’ll start with some interesting stats that opened the morning.

The CFOs in attendance were polled around critical issues they are facing, and here are some of the results …

–89% felt the worst was over but do not anticipate a turn around anytime soon

–Only 4% felt growth was likely to happen in the next several months

–70% were concerned and VERY concerned (35%) around the cost effectiveness of proposed government regulations

–When asked about the proposed health care legislation, 69% were very concerned about the tax impacts and 62% were very concerned about the quality of care

Conversely, the attendees felt there was some good that came out of the economic downturn … it has forced finance to go back to basics.

–32% said they now had a core business focus

–25% were focused on increasing productivity

–3 out of 4 indicated they would be preserving cash as a hedge against economic uncertainty

–77% indicated their focus would be on organic growth … which means …

–Only 10% indicated M&A was a core business focus

Is your CFO position safe?

According to CFO.com’s article in the Career Center today, Chief Financial Officer’s who work for a founding CEO are more likely to be terminated after a restatement than the CEO. In fact, the CFO is fired more than 80% of the time (vs. 65% for other irregularities). 

I guess if there is any good news in the article, it’s the last paragraph …

Consistent with the idea that CFOs were being fired as scapegoats and not because of true culpability, they found that fired CFOs of founder-managed firms were less likely to be the subject of a Securities and Exchange Commission enforcement action and more likely to find subsequent employment in a private or public firm, compared with fired CFOs of nonfounder firms.

Founding CEO aside, is your CFO position safe? Maybe for today, but what about tomorrow? There are so many things that high-value Chief Financial Officers and senior finance executives  can and should be doing … long before it’s even necessary to be doing them. Strategies that can mean the difference between a short search and an extended search, having to explain being terminated rather than being invited into something better, or even accepting a lesser paying role instead of continuing the career climb.

If no one outside of your firm knows about your brilliance, how will they find you?

CFO Recession Impressions

The November 2009 CFO Magazine contained a survey of Senior Finance Executives’ thoughts on the impact the recession was having on their role/career. Very interesting results particularly because responses were categorized by Chief Financial Officers, VPs of Finance, and Controllers.

Here are a few that jumped out at me …

–41.7% of CFOs said the recession has enhanced their career opportunities

–42.4% of VPs of Finance say it has harmed them because of fewer opportunities both internally and externally

–56.6% of CFOs say their role has become more important and respected 

–86.8% believe they have a voice in the company beyond finance

–27.9% feel they are stuck in a siloed role

–66.6% of all finance leaders say specific past experience (treasury, investment banking) has helped them achieve their current role

–48.3% attribute success to demonstrating their abilities such as IPO, restructuring

–28.5% of CFOs believe operational experience will help them advance

–3.3% believe that an MBA or CPA will be beneficial

–30.5% of CFOs would leave for the right job

–39.1% would NOT leave, citing enjoyment  of their current role as the reason … NOT uncertainty of the current environment

Interesting is the discrepancy between the belief that operational experience will help CFOs advance (I believe that’s true as well) and where having an MBA or CPA falls … particularly in light of so many companies making those credentials a requirement. What exceptional talent might companies be missing out on by adding that requirement?

Also curious was the reason CFOs cited for staying in their current jobs … enjoyment?

Thoughts?

LinkedIn: Your Portable Portfolio

There have been a couple of good posts about LinkedIn this week. If you aren’t currently on LinkedIn (shuddering in horror), here’s a good primer … “7 Ways to Get More Out of Linkedin,” which is posted on Mashable.

And the FP Executive Blog has a great post on LinkedIn taglines. Taglines are incredibly important and vastly under-valued. Boring is out, inviting is in. Remember, when you’re standing with a crowd, you’re blending in. Separating yourself from the crowd will get you noticed. The tagline “CFO” or “Chief Financial Officer” will, because its commonality, push you into the crowd in any keyword search.

What was distressing to me about this post was this reality:

John Smith: Looking for work

This gentleman lost his job title and in the process, he also lost his identity. Looking for work might be “what” he is doing, but is NOT “who” he is. It is not “who” any job seeker is. Your value is much greater than your job title.

And this tagline …

John Smith: Business Strategy Executive and Visionary exploring new opportunities

is forcing me to evangelize. This is definitely a more positive statement, but it is still broadcasting a message I personally don’t believe belongs in a tagline. Remember, the most attractive candidate is “still” the one who is passive. Don’t trade “hearing” about new opportunities (as a passive candidate) for “exploring” new opportunities (as an unemployed candidate).

A recent article about the future of finance careers by Kate O’Sullivan at CFO.com is a must read for finance executives. Here’s one of the key points from that article:

As the economy has begun to stabilize in recent months, however, the market for finance talent has showed signs of thawing. "We're going to see more voluntary turnover where CFOs are going to say, 'I helped my company get through this, and now I'd like to move on to my longer-term objectives,' which might be moving to a bigger company, moving to a CEO role, or maybe deciding it's time to retire," says Walter Williams, a partner at executive search firm Battalia Winston International. Wilson says some finance chiefs will likely look for operating roles as well.

Because you hold the most power NOW, while you are still employed, it is imperative that you build out your digital footprint and your network to facilitate your ability to secure your longer-term goals … and to stand out from your competition. Are you digitally distinct? Or, digitally dead? And what does your LinkedIn tagline tell the world about you?

To Tweet or Not to Tweet?

I was just re-reading CFO.com’sHeard on the Tweet” in preparation for this blog post. The question really is, should CFOs tweet … or not?

And then, as often happens, this tweet jumped out at me before I typed a single word. It pointed me to a great blog post by Gary Boomer, “Social Media, Influence or Control.” While it is directed to accounting firms, I believe it contains excellent points for CFOs as well.

Here’s an important excerpt:

Clients and potential clients are talking about you and your firm online. Do you know what they are saying? According to Nielsen Research, 78 percent of people trust their peers' opinions. This is not a new phenomenon, but social networks make it much easier to disseminate information. In particular, micro-blogging tools like Twitter and Facebook's status update feature enable users (including businesses) to spread information instantly.

Boomer is right. And I also agree with his statement that “firms should make every effort to influence social media and forget about trying to control how employees use them.” However, that is a corporate decision that only you and the executive leadership team can make.

The impact of a decision to not influence social media, though, for you and your career is far-reaching. Consider these … very true … statements.

— “You are who Google says you are.”  

Much like your brand, who you are is held in the hearts and minds of others. Are you who Google says you are? 

— “If you don’t show up in Google, do you exist?”

Being digitally dead is akin to being extinct.

You can certainly choose to ignore the social media trend, but it’s not going away. And as I said yesterday, the choice to not be proactive is a decision, by default, to be reactive. The question is, if you react too slowly or too late will you be able to cover the gap quickly enough to compete with your social media savvy peers (ahem, competition)?

CFO Turnover is Down … That’s Good, Right?

CFO.com’s recent interview with Tom Kolder, president of executive search firm, Crist/Kolder Associates, resulted in the article, “No Place Like Home." In it, Kolder talks about what he sees happening within top finance positions.

The title of the article speaks volumes. Quite succinctly, risk-averse finance execs are hunkering down. I’ve blogged about this phenomenon numerous times (see Social Media and Career Management and CFOs are Worried). 

There is absolutely nothing wrong with staying where you are … unless you are blindsided by a move that is forced on you. Here’s the piece of the story you can’t, and shouldn’t, ignore:

And there is still plenty of movement that is totally driven by the other end of the equation, where, rather than the CFO deciding to leave for a better opportunity, the company says, "We're not satisfied, we're making a change, this person's gone."

CFO searches are often confidential. If you believe there is corporate loyalty, the Board and CEO love you, and your job is safe, then perhaps you are not hunkering down … maybe you have your head stuck firmly in the sand. Believing it won't make it true.

You are the only one who is vested in your career. Your career is the thing that provides for your family and funds every other thing in your life. At the risk of repeating myself and boring you to death, you have the most power and are the most valuable while you are gainfully employed. So certainly, stay at home if it makes sense to do so, but be prepared to move! If you do the hard work of crystallizing your value proposition now while you’re still occupying that corner office, you won’t have to play catch-up from the curb.


Raise EBITDA … Raise Salary

There is a must-read article on CFO.com regarding a recent survey done by FEI on finance executive salary.

It is important for CFOs and future CFOs to recognize how their performance will be measured as it relates to salary; and then, have a clear and compelling marketable value proposition (MVP) around those contributions. 

Would you rather be in the group of finance executives whose salaries remain flat … or, the group who wins both a raise and a bonus?

If it is the latter, what do you need to be doing TODAY to ensure you are well-positioned for that outcome?

Why Employees Are Like Napkins

In a recent CFO.com article entitled “Why Employees Are Like Napkins,” Jeff Higgins, Executive Vice President of Client Services, North America for Infohrm, and former CFO of Klune Industries, responds to a question about layoffs with this comment:

Employees are usually seen as period expenses. They're the same as a napkin. They're less than a chair, because if you bought a bunch of chairs, they are capital equipment. Computers rate far higher than people in accounting systems.

OUCH!

Are you a napkin? Disposable and easily replaced? You might be if you don’t have a branded and compelling marketable value proposition, a clear message, and visibility among your target market. Without these things, sadly, you may just be a commodity, one of many. Much like a paper napkin in the napkin holders at a fast food restaurant. As soon as you use up one, you toss it in the trash and grab another one. 


It’s not easy to move beyond napkin positioning, but career longevity depends on it. Especially today.


Operational CFOs

For the past couple of years, I’ve suggested that CFOs with a proven track record and deep understanding of operations would be the most in demand and valuable CFO candidates of the future. Is the current financial crisis driving that train … even faster? If so, it is potentially great news for strategic CFOs with a solid business understanding of how operational functions interplay with the numbers. It is also potentially devastating for CFOs who have positioned themselves as primarily numbers guys.

A snippet from a recent article at CFO.com, “Future Tense” …

Some finance departments are beginning to incorporate methods such as scenario modeling, sensitivity analysis, and contingency planning to help CFOs think through a wide-ranging set of potential situations, thus avoiding a monocular view of what's ahead. They are refreshing forecasts more frequently, homing in on a handful of measures that have a financial effect on the company (so-called driver-based forecasting), and doing more to provide synchronous information flow between finance and operations.

Today might be a great day to have lunch with the COO!

Interview Your Future Boss?

 Should you interview your future boss? Absolutely! While it seems like a novel idea, it really isn’t. Rather, it is a strategic move … whether you are a CFO or other senior–level executive. Your ability to ask great questions of a potential company says as much about you as do your answers to their questions.

Interviews should be conversations, not interrogations. Landing in a new position should be a mutually–beneficial decision. If it isn’t the right place for you, the result is a costly mistake for the company and another job search for you.

CFO.com’s article, “Nine Things to Ask Your Future Boss, the CEO,” is a good read. I would add that being clear about your brand – how you do what you do – will increase the likelihood that the answers to these questions will be what you want to hear.