How to Build a Management Team – Part 2 of a Series

Subtitle: The Chief Financial Officer

The role of a chief financial officer has changed significantly the past ten years. What use to be a glorified bookkeeping or scorekeeper position has evolved into a strategic position of importance since the enactment of Sarbanes-Oxley in July 2002. It is not unusual for the CFO to become extremely close with the CEO … maybe even serving as partner … definitely as an officer with fiduciary responsibility. Today the CFO helps to manage the business toward its goals, achieve buy-in from key investors, and assesses the wisdom of pursuing new business ventures. Once your startup business starts growing at a rapid pace you will know you need a good CFO. This normally would be when you start looking at outside financing or careful cash management, need to start doing a formal audit, when your payroll reaches the 30+-employee level, or when you are contemplating a complex transaction such as an acquisition or merger … or maybe an IPO.

Seek Integrity and Excellence

So how do you go about finding an excellent CFO? Some companies use a quality CPA firm as a backup or help to their initial bookkeeper and then attempt to hire away one of the CPA firm’s employees whom they have observed and feel will be a good fit for them. Or they may go the traditional route of referrals or a retained recruiter with experience finding CFO type executives. Whichever route you choose to take, I always advise that you look for work ethic as the number one ingredient. Someone with work ethic is a worker, a doer, a fixer, and a thinker who is always scheming how to do better with a commitment for excellence and teambuilding. Furthermore, this person needs to be a good fit with your personality because you are going to be working together closely for many hours and, hopefully, years. In addition you want someone with the highest integrity and who has an excellent grasp and understanding of economics and how the markets work … globally.

What are your ideas or experiences in deciding when a startup has reached the CFO point?

Next: Part 3 – Top Marketing Person

© Phil Hoffman 2012. All rights reserved

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Tags: business, CFO, Chief financial officer, Integrity; Excellence

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