The First 90 days of a new CFO
BCG has released a report on how a new CFO should structure their first 90 days in the role. They refer to the new role of the CFO as described here:
Gone are the days when the CFO was a numbers person who supplied other leaders with data to inform strategic decisions. Today’s CFOs are strategists and value creators in their own right, with broad mandates and continuous responsibilities to drive strong performance.
This new CFO role, which we can refer to as the modern CFO, presents both a challenge and an opportunity. It’s an opportunity in that today’s CFO has increased visibility and a greater presence in the leadership of the enterprise. The flip side to this coin is that anytime you encounter increased levels of expectations, performance, and responsibility it also represents a greater operational challenge for the person holding the position.
Some of the initial tasks the new CFO will need to focus on include:
- Help shape the company’s agenda
- Engage with investors and capital markets
- Ensure strong financial performance
- Partner with business colleagues to support operations
- Oversee core functions including audits, regulatory and risk management
The trap highlighted by this report is when CFOs attempt to do all of the above-mentioned items all at once.
The stress of delivering value across so many areas is resulting in quicker than desired turn-over for the role:
A BCG analysis found that nearly 10% of CFOs at top companies leave their role within a year after they start the job. And more than 50% have left by the end of the fifth year.
BCG recommends that the new CFO build a 90-day plan to include the following:
- Form relationships
- Understand current performance
- Develop a vision
- Set an agenda for execution
The very first step for a new CFO should be to assess the company’s financial health across these three areas:
- Cash flow
- Accounting practices
- Audit issues