Getting Out of the Back Office

February 11, 2010

I was planning on writing more today in my series of blogs about building great boards of directors, but ran across this wonderful article, “Escaping the Executive Bubble” in the January/February 2010 issue of CFO Magazine.

This is what getting “out of the back office” is all about. CFOs, by the very nature of their job and their position on a company’s executive team, can be pretty intimidating. After all, a lot of employees associate the CFO with “no,” or the company cop, or (in some really extreme situations) as the spy for the CEO. Compounding this stereotype is the simple fact that CFOs can sometimes speak in a language that no one other than another CFO or finance geek can understand. I mean really…how many company employees can get excited about the implications of new FASB guidance or an SEC ruling?

Sadly, many CFOs don’t ever escape the executive bubble. There are a number of reasons that probably contribute to this unfortunate predicament: there is often too much work to do just keeping the dialtone on, the stress from the personal liability in the finance profession is unlike any other in an organization and really can result in some nonsocial behavior, reaching out to individuals outside of finance may just be outside of the comfort zone of a CFO, or the CFO just doesn’t know how or where to begin. I’m, of course, giving CFOs the benefit of the doubt in assuming that they actually WANT to escape the executive bubble, but there are probably a few who just don’t have this desire.

Surprisingly, I see this behavior even in smaller companies, like the expansion stage companies in our portfolio. This syndrome is not limited to big company CFOs! The tips in this article in CFO Magazine are definitely worth reading for the finance leader in an organization at any stage.

As part of the operational support that we provide to our companies, we work closely with the CFOs to assess themselves and their organizations against a Capability Maturity Model (CMM).

Some of the attributes of progressing to a higher level in that CMM involve Finance and the CFO taking a more proactive role in driving change and excellence through an organization. This can’t really be done without building relationships across functions and down through all levels.

Other attributes involve the CFO raising the financial awareness and competency of the organization as a whole. This, too, is pretty hard if the CFO can’t connect with non-finance people.

Still other attributes require the CFO becoming more involved as a strategic partner on the front end of business cycles. This can also be quite difficult if the CFO hasn’t built the relationships with the business people in the trenches.

Further developmental progression in the role of the CFO can often lead to helping to drive strategic acquisition. This can be hard to do if the CFO hasn’t broken out of the bubble to really listen to the insights of the development, sales and marketing team around the company’s product, product roadmap, competitive positioning and the like. Hearing this solely from the executive suite in management team meetings is not quite the same.

Last, one of the most critical things for technology companies at this stage is to really get their arms around their economic model, and gain an understanding of the drivers of that model, so that they can turn the dials to optimize the results. The CFO can’t help the company accomplish this without having a solid understanding of the company’s business model and how the various business flows inter-relate. It’s pretty hard to understand how to propose actionable initiatives to reduce the cost to acquire a customer without having some context of the first-hand experiences from the sales and marketing team.

In the end, getting out of the back office is pretty easy. Just get up out of your chair, leave your office or your cube, head over to someone in sales or marketing or product and ask them what they’re working on. Take an interest. Really listen. Ask what they find most challenging. Ask what’s working well. Next, ask them how you (in finance) can help make their jobs easier. Ask how you can make a difference. This is probably not the time to opine on what you believe their best practices processes should be. This is the time to listen.

Remember, finance is ultimately a service organization for the company. Start building rapport by helping your co-workers understand that you really do care about helping to support their efforts. This one small step will build the foundation for the rapport and relationships that will help break out of the executive bubble….actually it will help break out of the finance bubble…no matter what your title.

Stay tuned for more from out of the back office…