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Chris Bintliff, back with you again for create the next from Pro CFO partners. And today I have as my guest the return o fmanaging partner and co founder, Nelson tepfer. And Nelson. In the last several episodes, we've had lots and lots of opportunities with many of the principles from Pro CFO partners to talk about how sometimes there's an outdated notion or an inaccurate notion about what is the role of the CFO? And what is a leader getting wrong about the CFO? I wonder from you? What is the CFO getting wrong about the CFO? What do you think, are some things that the CFO should be thinking about themselves or doing differently in their own role?

Sure, Chris, thanks. Great to be back again, thank you for having me. So the CFO role is always an interesting one from different perspectives, I've held several of them, as many of my team, we've held several of these internal CFO roles. And what I find fascinating is the actual difference that they have in different sized companies where I've met CFOs have really large entities, you know, 50 hundred million 200 million type entities where they're essentially just bookkeepers. And I've certainly met the CFO is a really, really small companies, where they're basically the CEO of the company, what many of them are, I'm not gonna say getting wrong, but perhaps not focused on correctly is increasing the impact that they have over the entire business, they're not really supposed to be that siloed, the gatekeeper type role, obviously, which I know is topical, has been discussed before. But more than that, it's their role is really to create the function that is forward looking, that actually drives the growth of the company

to create the function that is forward looking. Now, as you explain that, or explore that, and you start by mentioning in different size companies. Talk to me more about that, should I be thinking differently inside of a, you know, $100 million company that I am inside of a startup, what things are the similar for me to be thinking, forward thinking and be a forward thinking sort of leader and what things are totally different require unique skill sets.

So we'll start with the differences, obviously, the needs of the company, perhaps are different there, you know, a $300 million business is going to bring up perhaps that CFOs and be spending a lot more of their time. Most because they have entire staff filled out under them, that handles a lot more of the day to day, whereas a much smaller company, they'll still need to be a lot more operational. So there's just mechanical differences and programmatic differences based on some of the sizes of the company. But the perspective is really important for the verb. And both of those really vary in many ways, in many ways, shapes and forms should very much be the same. In that it should be when we say forward looking as in, I can, I can't think of a better way to put it in. But the company who's spoken to recently, where he tells me his controller, who's the highest person who's essentially the CFO of this company, those guys controller gives him the KPIs for the company. And I said, Great, does she tell you what they should be? And the CEO pauses for a minute and thinks, and then starts writing some notes frantically, because naturally, it's not actually happening like that. So what what, what

what a lot of CFOs are doing is reporting realities, but not

how to change them how to effectively effect that evolution. So they become that almost like, Okay, this is what happened, this is our performance. And it's like, Okay, great. But what happens next? What do we do with that? And that's why when we talk to us, to a CEO of a business will also have nine people in his accounting department. He's got a VP of finance there, who's essentially the CFO, and he tells me, you know, p doesn't have that strategic partner. And that's what he's looking for in the CFO he's looking for a strategic partner will say, Okay, this is what we're trying to do with these initiatives. This is how we're going to measure how well this happens. Well, this is a plan we're going to put in place to get at 10% growth next year. He's looking for that, and he doesn't have it with his current team, despite the fact that this is a large company with seven, nine or 10 people in their accounting and finance function.

Now, what's interesting about that is, I imagine there are a lot of CFOs, who at when the when they came into the organization, or maybe they came up for years and years and years, that role, that ability to sort of report intelligently on lagging indicators was valuable,

but now valuable, no, it is very valuable. You can't get to the next part of it without having that but it's also an essential part of the process. The problem is when it doesn't translate into what comes next.

And that's got to be kind of a visionary mindset. I mean, that's that's a, that's a, I've described before that I think a great tip is to be creative, and you've kind of rolled your

eyes at that. But for me that sits in this position. You have to be a person who can creatively think about possibilities and then route them back into meaning For predictable actions, we think you're absolutely correct. But we also think about it as providing the framework to make those decisions and measure the successes or failures of those, a company that decides they want to do a strategic initiative, we need to build a framework around how we're measuring how successful that is when to say we want to put more resources towards it, when to say we need to cut our losses and move on to something else. So that's what the strategic partner the CEO becomes, is, how do we create this system and process around those decisions? That actually a measure the success club, and B also define? Which of the things we want to actually invest in to drive the company's growth?

Can that be learned? Can the ability to do that be learned? Is it simply a matter of experience or experience or experience? Is it a, an innate sort of quality that you have to look for in the right sort of person?

So it's pretty interesting, I've actually seen both. I've seen the ones who do it innately. And I've seen the ones who obviously, it was not innate to them, but they've learned it through their experience, which I find fascinating when you see the different profiles of really successful CFOs. And we do, because those are people we like to bring onto our team. And the profiles are so different. We get asked this very often for anyone from the executive level, I remember, I think just like a CEO or business owner, it's more important that they know their own strengths and weaknesses. Yes, again, as they're growing in the organization, they build the teams around them that support what they're doing. I remember being asked by a younger CEO, he says, you know, you work with a lot of businesses have you come across, you know, what's the profile that the successful CEO needs to be. And I said, I've seen every profile be successful. Hmm. But every single one of those knew about themselves, what made them successful,

interesting point, because then that if you have that self awareness, you can also say, and this is the sort of organization that I will excel in. And this is the sort of organization that somebody else will be

better equipped to be in. Absolutely. And very often, interestingly enough, that's what I see defines what the CFO ends up doing is what's in place in that organization before then, again, a really, really good CFO will come in and change over an organization. But when you walk into someone where you have a CEO, who is very, very good at the numbers and built a lot of the processes, that CFO is not going to be focused as much on that side, because that's already there, they're gonna tweak they're gonna find to make it better, obviously, but they're gonna focus a lot of their efforts on the things which they really belong there helping, as opposed to if they walk into a company where the CEO is that entirely different the left side of the brain type of mentality. And they're not thinking about any of this kind of systems process, that they're really good at delivering the product or service or you know, those kind of things, then that CFO needs to go out and build a lot of this. And it's how they build that it will very often is going to guide the success of the business. Create. The next is brought

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do you find that there's a natural resistance or tension, either from leadership or from you know, others on the team, for a CEO to come in and say, Look, we're going to start looking at the future, which means we're going to do a lot of things differently, or is it a great big breath of fresh air and a sigh of relief that somebody is coming in here to change things up?

It's fascinating to me. So much of that depends on that CEO and the communication with the company.

And the culture, probably they've created. Yeah,

exactly. Right. Some of them are terrified of change, and they don't know what's going on. But a lot of that comes from a lack of communication, or how certain things are conveyed when you're telling them this is what we're doing. Many of them if you actually go through the process of explaining this is what we're doing and why they're thrilled. They want to be better, they want the company to do better, they want to be part of something which is growing and evolving. What I also find very, very interesting and growing organizations is that many an ACO blanket this across the C suite don't recognize that their communication has fallen by the wayside with how they're talking about it. Especially a fast growing company where you've grown from five people to 50 people over the course of five or 10 years. It's that same executive team who's been in there that entire time. Many of them don't realize that when they just say something to somebody in the hallway, like that used to be everybody in the company knew it then now it doesn't mean like that you have to actually thoughtfully communicate with people because the business has changed. And the lack of communication does create more fear, those create more nervousness, and that's obviously when employees started looking for different opportunities when they don't when they're not sure what's going on.

I think there are a lot of, I won't say bad habits but maybe less effective than they used to be because a company started doing something when they were five employees and or, you know, $500,000 in revenue and those same things. Got to be familiar patterns as they grew and grew and grew and grew and grew. And in fact became more and more out of touch from the top level to the third or fourth level down used to just be one level down. You could say something to somebody in the hallway, and you felt like the whole company knew it. How is that reality, this sort of growing pain? When do you start thinking to yourself? Okay, we need to have a fresh look at our team is that every milestone of some sort?

When do you When should you, okay?

You tell me,

when do you is unfortunately, when you start feeling the pain of not doing it? That's what should relate? In some ways. That's exactly true. You know, when you start running into cashflow issues, and you realize it's because your process for how you invoice your clients makes it that you don't send them out into four to six weeks later. You know, that's usually too late. I mean, that's usually too late for when a company should be doing it. But we're, when do they that's when they actually do it when they should, is really as they're going through different milestones, or as they start seeing the images of it. What I very often find is those CEOs who are the great CEOs, they have an inkling of these issues long before they actually choose to address them. And it's making sure that they recognize that no, this is real issues. And then let's be addressed as a really important part of it. I remember talking to one CEO, and he asked me if you know, we can do a review of their current financial systems and processes because they have somebody at a senior level in the finance and accounting function, and they want to do a review. I said, Of course we can. But if you're asking me to do it, you probably already know the answer, don't you? Hmm. And he thinks for a second he goes, Yeah, I said, Okay, I said, Look, I'm happy to do it with you, but you already know really what needs to be done. And that's the perspective that I think is very important for CEOs or any C suite or any leaders to really recognize, most of them really know when the issues are already starting to form, they choose not to address it a because they may have more pressing issues, which we all get obviously growing a bit growing or running a business is certainly not easy. But it's also because it's just easy not to deal with it easier not to deal with it than to try and tackle it. And unfortunately, when you let certain things like that lie, and then they grow and fester usually creates far bigger issues

and exponentially. I mean, what what what is really tough now 50 more hires from now, you know, or 500 million more dollars from now or whatever, you thought it was tough, then, you know, it's it's going to be really something that you got to think about. So if I if I am thinking of I want to give some great piece of advice here. Is there something that if I'm a CFO, what should I be thinking about? What What should I be recalibrating in my own space? Just to kind of think, am I doing the best job I can be doing? And if I'm a leader, what questions should I be asking myself about? Look? Is it time to start thinking bigger about this role?

So you know, we'll start with the CFO, one, a lot of it comes down to what is the impact that they actually have on the growth of the company, not just what costs? Are they controlling? Not just you know, one of the things that they're managing and monitoring for reporting purposes? That's all, that's all part of it? What's the impact that they're having on the growth of the company, I'm driving the evolution of the company? Because that's really where truly outstanding CFOs really separate from the fact. It's not just about, can you report on everything the company's going on? That's the basics. No, can you? Yeah, can you tell me the reporting on how well we did last year? Of course, you have to have to be able to do that. But where should we be next year? And what are we doing to get there? That's really where the questions and the impact and the thought process is really needs to be truly separate a great CFO. Yeah.

And and for that executive, when, if I'm having that little whisper in my head when I can't sleep at night, is that when I should be making some calls? or What should I be thinking about?

Matt many, first of all, for sure, they definitely should be making this call as a question as to who I mean, there are tremendous amounts of resources from other executive groups that exist out there, that many people are going through similar type issues to you, is a lot of resources, talk to your trusted advisors, they work with many other businesses around this, there are a lot of resources to go through that, you know, don't just put it away and say it'll get better type of thing, but actually reach out and have the conversations with those people who are experienced around these fields. And inevitably, advisors is those peer advisory groups, there's so many different resources,

it's probably a really healthy and enjoyable conversation. When you get into it. It's one of those things you put off and put off and put off. But as soon as you start talking to somebody who's like on your level on your wavelength, this, it gets invigorating, it gets exciting. And now you start to see the possibilities and potential it's not as bad

as you thought it was. Absolutely. And it's funny, we had a conversation like that recently with a company we were speaking to here. After the first conversation we have with them, you see them give them a huge sigh of relief. You mean this is normal? This isn't the just us having these problems. And like, I don't know, these are very common issues that I've heard absolutely there. And they were so thankful that I did it. And of course, now they're upset, they didn't start doing this much earlier on to save them a lot of the pain. So reach out and talk with people that are many resources around to help companies tackle these issues.

And of course, pro CFO partners is among them. If it can be useful, Nelson, thank you so much for spending time with us today. I always enjoy talking to you. We need to do this more often get you back in these episodes because I always enjoy it. Thanks so much for sharing your expertise with us today. Thanks, Chris.

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