Strategic & Operational CFOs in Demand

Recruiters from Korn/Ferry International, Heidrick & Struggles, and Russell Reynolds at last week’s CFO Rising West panel all indicated that strategic and operationally-focused CFOs are in high demand once again.

In an article in CFO.com on September 28, 2009, E. Peter McLean from Korn/Ferry International said, “There’s been a quick sunset on the need for capital-markets expertise. We’re back to a focus on….real business people who have proven they are effective at driving value.”

Well, perhaps unlike the Fortune 500 which seemed to focus on recruiting CFOs with capital-markets expertise during the liquidity crisis, OpenView Venture Partners has always firmly believed an ability to drive value is critical in growth and expansion stage companies. CEOs of our portfolio companies and prospect investments often ask us how a CFO can get “out of the back office” and do this.

One key is that the CFO must have the ability to deconstruct a company’s strategic goals down into a business model, deconstruct that business model down into the key economic drivers, identify the optimum performance level for each of those key economic drivers, monitor the company’s performance against each of those optimum performance levels, and then use that knowledge to continuously improve the company’s performance. 

Until a company can understand its economic levers, and with that, understand how to effectively turn the dials, it’s a bit like flying blind. In good weather, a company might be able to coast for a while on the breeze and ignore the controls. In bad weather, companies that don’t understand those same levers will crash to earth fairly quickly.

Our goal in working with all of our expansion stage portfolio companies and their finance leaders, is to help them identify the key drivers of their economic model, and advise them how to optimize each of those levers in order to drive longterm value for their company.  An expansion-stage finance leader who can nail this is more than just the latest recruiting trend….he or she is worth their weight in gold.

Stay tuned for more from out of the back office…