What are the Secrets of Rock Star CFOs?

The CFO position has evolved considerably in recent years, from what was sometimes derisively called a “bean counter” in the past to more of a strategic role. In fact, it’s not a stretch to say that the CFO-CEO relationship is the most important partnership in most businesses.

Jack McCullough, the founder and President of the CFO Leadership Council, knows all about the responsibilities and expectations of CFOs today. Throughout his long and distinguished career, he has served as the CFO for 26 different companies and worked with 35 different CEOs. 

McCullough has written a book titled The Secrets of Rock Star CFOs. He recently shared some of his thoughts about these secrets in a recent webinar hosted by Consero.

Secret #1: Think Strategically

The CFO should serve as the strategic partner to the CEO. “It’s the single most important relationship in the company,” says McCullough. “CFOs must have a strong, strategic relationship with their CEO who sees the value they add to the company.”

McCullough notes that sometimes there’s a lot of pressure on public company CFOs to hit numbers for the quarter in order to please investors. “But you can’t mortgage the future for short-term goals,” he says. “Sometimes the CFO has to be the one to emphasize this.”

Secret #2: Provide Ethical Leadership

Integrity is critical for organizational strength, so it’s important to create a corporate culture where ethics are emphasized. “The way I like to put it is you have to be ethical even when it’s inconvenient,” says McCullough. “Once you make the first ethical compromise, it’s easier to make the next one and then the one after that.”

Secret #3: Master Dealmaking

It’s up to the CFO to assess the risk of potential deals and help identify opportunities. “When it comes to dealmaking, the CFO is the most important executive on the team, right along with the CEO,” says McCullough.

Traditionally, the CFO’s job when analyzing deals was to try to avoid making mistakes. But McCullough believes CFOs today should be more proactive in looking for reasons to make a deal happen. He refers to this as “CFO-go” instead of “CFO-no.”

Secret #4: Build Elite Teams

McCullough sums up this secret as follows: Hire people who are smarter than you and don’t be afraid that they’ll outperform you. “Also, be forward-looking when building your teams: Hire for what you’ll need in three years, not what you need today. Look for employees who can grow with the company and who share your passion, energy and work ethic.”

Secret #5: Learn Continuously

This isn’t just about ongoing formal education like an MBA. It also refers to peer-to-peer networking, which McCullough believes is just as important. “Elite executives learn from each other,” he says. “For example, we have informal networking for an hour before and after CFO Leadership Council events.”

Secret #6: Develop Board Relationships

McCullough believes it’s important for CFOs to talk regularly with board members without the CEO around. “For example, plan to meet with a couple of board members every month and really get to know them. Nothing bad has ever come from having good relationships with your board members.”

Secret #7: Perform Cross-Functionally

The old-school accountant approach to the CFO role doesn’t work in today’s world. A CFO’s job today has to be cross-functional — they must understand the entire business and overall corporate strategy, including sales and operations.

“CFOs shouldn’t think of themselves as financial executives,” says McCullough. “They should think of themselves as an enterprise-side executive who happens to be a financial expert.”

Secret #8: Maintain Financial Expertise

A CFO can be strategic, but if they can’t perform basic financial functions like closing the books, it won’t matter. “If the numbers aren’t right, then nothing else is credible,” says McCullough. When it comes to financial expertise, “the buck stops with the CFO,” he says, “not the controller.”

Finance as a Service (FaaS) can help CFOs accomplish the basic blocking and tackling tasks involved in financial operations, like closing the monthly books, more efficiently. This frees them up to spend more time on strategic tasks that add value to the company.

Secret #9: Keep Your Work and Life in Balance

Studies have consistently shown that workaholics usually aren’t the best performers, so it’s important to maintain a healthy work-life balance. “Exercise regularly, eat right and don’t spend too many hours at the office,” says McCullough. “Also, guard your mental health by participating in hobbies or anything else that you find enjoyable and relaxing.”

Contact Consero to learn more about how using Finance as a Service could help strengthen your position as a strategic leader for your organization. 

You can also order this book on Amazon.

Consero FaaS: Disrupting the Outdated Traditional F&A Model

Transformation
  • Cash to GAAP conversion
  • Clean-up work
  • Interim oversight & support
  • Accounting software Implementation

Build it Yourself Solution

  • CFO / Interim CFO
  • Consultants / VARs

Consero FaaS Solution

  • CFO / Interim CFO
  • or Consero Interim CFO
  • Consero Setup/Transformation
Ongoing F&A
  • Monthly financials
  • Daily accounting support
  • Management reporting
  • Integrate add-on acquisitions

Build it Yourself Solution

  • CFO
  • Controllers & Accounting Team
  • Enterprise Accounting Applications

Consero FaaS Solution

  • CFO
  • or Consero Fractional CFO
  • Consero FaaS Enterprise F&A Software and Services

New PE Platform Investment F&A Challenges

Founder Owned Company Accounting:
  • Existing accounting done on a cash/hybrid basis
  • Run on SMB accounting software and other disparate applications
  • Inability to produce auditable financials
  • Lack of know-how to develop projections & KPIs
  • No consistency/structure to customer contracts
  • Underqualified staff
  • Non-scalable manual processes
Carve-Out Accounting:
  • Required to move off parent company accounting applications in a timely fashion
  • Have to build an entire F&A team
  • No documented operational policies and procedures
To Optimized Finance & Accounting:
  • Monthly financials available in 5-10 business days
  • Audit and diligence ready support details
  • Integrated enterprise grade accounting software
  • Budget and forecast reporting
  • Business KPIs
  • Efficient & scalable processes for rolling in add-ons