How to Live with your CFO: Fixing a Dysfunctional CFO-CEO Relationship

CFO CEO Relationship

 

The best way to build a strong, profitable and sustainable company is to start with a solid CFO-CEO relationship.  In the best companies, the two executives are in lock-step, working together to realize a common vision. And in doing so, they divide the work, compliment each other’s strengths and have each other’s back.

When it works well, the interplay and support between CEO and CFO creates value greater than the sum of its parts and catapults the company past the competition. When it fails, the bad relationship can tear an organization apart at the seams.

3 Danger Zones

Creating a great CFO-CEO relationship does not happen naturally.  Like a marriage, the relationship takes time, effort and self awareness to understand how your work style impacts your CFO (and vice-versa).

If you and your CFO are not working together to build the strongest company possible, perhaps its time for some couple’s counseling.  See if you recognize yourself in any of these three common relationship danger zones:

1.  Too Close for Comfort

  • The Good News: You Are Like Family. Family and long-time friends often end up in business together.  The top execs share power easily and can “read each other’s minds”.  When they share a common vision and values, making decisions is fast and effective.
  • The Danger: Frustration. Sympatico relationships slip easily into a pattern of less overall communication (why say it if he already knows it?).  This breeds frustration when the CEO takes an executive action that doesn’t make sense to the CFO. And in the worst case, the close personal relationship creates extra stress (familiarity breeds contempt). If the friendship or family bond prevents you from communicating your professional frustrations, it gets bottled up — or spills over into other areas of your life.  Either way, you end up miserable, and eventually the relationship and work product both suffer.
  • What it needs to work: Space and Structure. Schedule time with your CFO for regular open communication – a “Start, Stop, Continue” feedback structure can help both parties identify what actions are valuable to the business and which are destructive. If work styles are radically different, a personality test (like DISC or Meyers Briggs), paired with a professionally facilitated discussion of the results can help open up new channels of communication.  And finally, put some space between the two of you by drawing up better job descriptions: set boundaries and clear roles so that decision making becomes less antagonistic and more predictable.

2.  Who’s the Boss

  • The Good News: You are Learning.  Not all executive teams grow up together.  When an organization brings a CFO in from the outside — or hires a part-time CFO on a consulting basis — the team can wind up in a teacher/student relationship. The dynamic can be rewarding for both parties – the CFO feels important and the CEO feels that he’s learning more and more about the business.
  • The Danger: Reliance and Resentment. The teacher/student paradigm has the inherent danger of devolving into a dysfunctional relationship. An overly agressive CFO can push a weak CEO into a pattern of over-reliance: the CEO hesitates to make any decision wihout consulting the CFO and in the end will lose their own vision and passion for the work.  Likewise, a less confident CEO may become so intimidated by his teacher/CFO that resentment, intimidation and finally separation are the natural result.
  • What it needs to work: Care and Confidence. To build a more effective relationship, the CEO has to learn to trust themselves – and to view the CFO not as teacher but as resource. Likewise, the CFO must dial down the didactic and amp up the support. The CFO’s goal must be to make themselves unnecessary. That’s a hard goal for a CFO and requires a willing CEO to take the reigns. Simple, accessible DIY tools (like dashboards and CRM systems) can help the nervous CEO get past reluctance and insecurity. If this sounds like you, remember to share your goals and visions with the CFO before asking for advice. Explore issues together, but remember that the ultimate direction for the business comes from you — and your CFO is just one sharp tool in your toolbox.

3.  Chaos vs. Controll

  • The Good News: You are Set Free. Perhaps you have a CFO that seems to take on all the drudgery of the office. He magically leaves you free to pursue your passions, be the visionary and toss around ideas for the Next Big Thing.  You can rely on your CFO to be the operations engine and enforcer at the office while you search for new markets and new lines of business.
  • The Danger: Burn Out, Resentment.  As the CEO you may be having the time of your life, but your CFO probably feels that he is left holding the bag.  If you see your CFO trying to solve HR problems, dealing with angry customers, or constantly fighting cash flow problems, you may have turned your CFO into a reluctant parent figure. At first, the CFO may feel important as staff turn more and more to him for help. But this is a warning sign that your business is out of control — and your number two guy is trying to save a sinking ship. Eventually you will break both your business and your CFO.
  • Tools to Make it Work: Discipline and Distance. If you think you might be the cause of the chaos, learn to play by the rules of the office — at least while you are in the office.  Understand that those around you are often overwhelmed by your energy and enthusiasm. They are so busy doing whatever you think is urgent that they fail to do what is important. So instead of roping the entire team into your Next Big Thing, save some of your ideas for later.  Meanwhile encourage your CFO to be the strong co-pilot that you need to keep the ship sailing straight. Commit yourself to a more professional, disciplined demeanor inside the office with some simple rules: (1) always set meeting agendas; (2) review financial reports on a weekly basis; (3) work within the agreed upon budget.  And finally, give your CFO permission to be the bad guy — let him set goals and budgets, veto new projects and control spending. When you are in the office, help your CFO avoid burnout by following the rules and being an example instead of an exception.  If the CFO knows you are supporting his short-term operational goals, he will be more committed to company growth… And you will have more time (outside the office) to dream the big dreams and pursue new goals.

Every executive team will have its own relationship and cadence, but its important to create a nurturing environment where you can both grow as professionals – and grow the company together. Doing that starts with being aware of the relationship dynamic and finding ways to optimize the performance of each executive.

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