Gone are the days where the CFO title was synonymous with a shy number cruncher tucked away in a distant (and lonely) finance department. The ideal business partnership now involves striking the balance between an extremely ambitious, fearless, go-getter CEO coupled with an equally grounded strategic CFO. Each position has a distinct and crucial role that they play within the company. As someone who has played the role of both CEO and CFO, I believe the most successful businesses enable these two roles to balance each other and collaborate together.
A CEO leads with a vision, but visions don’t come without a cost. As the business environment continues to fluctuate and many industries are becoming more competitive, each and every decision a CEO makes must be analyzed from differing perspectives. Informed viewpoints increase the likelihood of making the soundest decisions possible. That’s why CFOs now find themselves working alongside their CEOs, applying their financial knowledge of the company to ensure feasibility of strategic decisions. Naturally, a new and active dynamic has developed between both roles, where the CEO steers the company in a certain direction while the CFO hits the breaks in financially unsound territory.
While the traditional CFO may have been responsible for checking the math, today’s CFOs are expected to know the ins and outs of the company’s business and to understand its strategic direction. Their knowledge of the company’s financial standing plays a crucial role in determining the business capacity of making the CEO’s decisions a reality. Having a better understanding of financial operations and strategy now yields more positive opportunities for financial leaders wishing to transition from CFO to CEO—if presented with the opportunity.
Before settling into my current role as the CEO of The Glimpse Group, a Virtual Reality and Augmented Reality platform company, I’ve served as the COO/CFO of three other businesses. Nearly a decade ago, I found myself wearing these two hats in a private IT healthcare organization where a large part of my work involved helping position the business for growth and later sale. Rather than focusing solely on providing financial information—as many still perceive to be the sole duties of a CFO—I applied that information to shoulder large strategic responsibility alongside my CEO. These experiences opened my eyes to the idea that, as a CFO, my role isn’t one dimensional. My financial knowledge is valued and needed in aiding sound corporate level decisions. This is the insight that has shaped my perspective towards the role of CFO in my company today.
Effective CFOs must serve as the CEO’s trusted partner. CFOs must be unafraid to tell the CEO that his or her seemingly brilliant decision may not be so bright in light of the company’s current financial standing. This marks the evolution of the CEO/CFO dynamic, one that I can dually relate to from a CEO point of view. No one tells you this, but CEO is a lonely position. There are a lot of important decisions to be made, and you can’t open up to everyone about them. As with anything in life, establishing a system of checks and balances is essential in covering all possible shortcomings.
We can’t have everyone at the company making top-level decisions, but a good CFO should not be confined to the backseat. Instead, a strong CEO/CFO dynamic puts a CFO in the passenger’s seat—the co-pilot who monitors the fuel tank while simultaneously keeping an eye on the map, the weather and the driver’s stamina. They ensure that the company reaches the desired destination in the most efficient, affordable and realistic way possible without losing sight of where the company is headed. While they may have a tight financial hand, ultimately the CEO benefits from having another perspective. Good CFOs don’t confine themselves to just following the numbers; their perception is broader than that. They predict how product and project execution could lead to further revenue growth. That’s why Glimpse’ CFO/COO Maydan Rothblum is my strategic partner and I get him involved early in all critical business decisions. Our business relationship is built on trust and open communication, and his My knowledge of our company’s ability to execute product and project delivery decisions is fundamental in formulating a future growth strategy for our company.
For any CEOs working quite closely with their CFO, there will be times where you’ll step on each others’ toes. Trust me—understanding where the lines are drawn between the two roles took a bit of getting used to when I transitioned from my last CFO position to the CEO of Glimpse. Oftentimes, I found myself trying to drive the car on my own. However, the experiences I’ve garnered from having my foot on the breaks at previous companies have prepared me in becoming a better CEO today. I understand the pressure a CFO carries on their shoulders to assume the dual role of financial expert and strategic consultant to the CEO.
My current CFO and I have many heated back-and-forths. As CEO, you want to spend as much as it takes in order to make your vision happen, while the CFO stands on defense in order to keep company operations in check. Had I not been in his position before, I may have found his challenging stance to be a source of headaches; however, this would neglect the need for the sober second thought that strategic CFOs bring to the table. Thankfully, I recognize the need for an outside and often opposing point of view from someone who feels just as strongly about the prolonged success of my company.
If you’re a CFO, your role in the company goes beyond the Excel sheets and accounts payable. Become a partner to your CEO. Voice your opinions pertaining to potential strategic decisions. These concerns should come from a place of financial competency. Your understanding of budget limitations is an essential asset to any CEO’s thinking process, and serves as a crucial role in the moving parts of a healthy company.
CEOs have a lot on their plates and although their company decisions may make theoretical sense, they need someone to constantly look over their shoulder to make sure these decisions can pass the reality test. CEOs must trust in the CFO’s abilities to work in the best interests of their company. Out-of-the-box thinking paired with down to earth feasibility forecasts is a match made in corporate business heaven.