Would you believe that striking a healthy work-life balance is one of them?
For many CFOs, the idea of achieving a satisfying work-life balance is something of a fantasy. The hours are long, and the pressure to excel — making certain every big-picture strategy is sound, virtually every detail precisely right — is extreme.
One could point to almost any finance chief at a big company, or a struggling one, or one that’s growing fast or starting up, and say with a fair degree of confidence, “that person is a workaholic.”
But is that a good thing? Not according to someone who should know: Jack McCullough, who has served as finance chief for no fewer than 26 startup companies. “Being a workaholic is a mistake,” he said during a webinar he recently presented. “Workaholics are not the best long-term performers. There are times in all of our careers when we have to work 80 or 90 hours a week and forego other things. But it’s not a wise long-term strategy.”
In McCullough’s view, a good formula for a successful CFO includes a lot of “other things”: family, friends, physical exercise, reading (and not just business books), hobbies, and community service. And “if your boss asks you to skip your vacation, skip your vacation but also start a job search and make it up to your family.”
So important is striking a healthy work-life balance that McCullough included it in a list of 10 “Habits of Highly Effective CFOs,” which was the title of the webinar. “If you don’t want to do it for yourself or your family, then do it for your company, because you’ll be better at your job,” he said.
Also on the list was “continuous learning,” and the way McCullough prepared for the presentation offered a perfect example of it.
McCullough is the founder and chief executive of the CFO Leadership Council, a 12-year-old, membership-based educational and networking organization that now has 23 chapters nationwide. In that capacity, he’s gotten to know hundreds of finance chiefs. But with the webinar coming up, he didn’t rely on his past conversations with them, nor on his own long experience as a CFO.
Instead, he painstakingly interviewed dozens of finance chiefs specifically to find out what characteristics they consider to be drivers of their success.
With regard to continuous learning, most of the CFOs he spoke with are “very intellectually curious,” he said. For example, a majority of them have MBA degrees, which finance professionals often obtain after their careers have begun. And all of them are readers.
Many of them highly value mentors, McCullough added. To find a mentor, he noted, speaking with board members is a good strategy, as most of them have a lot of high-level contacts. He advised that CFOs, or those aspiring to the job, seek mentors outside their organizations. It can be awkward, he pointed out, to tell your boss that you need mentoring because you don’t understand some things or need professional polishing.
Most of the effective “habits” on the list are no surprise — for example, “thinking strategically.” Noting that old-school CFOs were known as the people who said “no” to spending on new initiatives, McCullough said, “Be a CF-GO, not a CF-NO. You want to be involved in making it happen, not putting on the breaks.”
Others on the list:
Providing ethical leadership. Overall, the finance chiefs McCullough interviewed identified this as the most important characteristic. “CFOs seldom lie — it’s not in their DNA,” he said. “But there’s more to ethics than that.”
CFOs are expected to be the most ethical person in the company, he noted. They need to “fully and accurately disclose all relevant info to all relevant parties. And [they] always need to be evaluating the needs of all constituents, be they stockholders, investors, customers, employees, suppliers, and every once in a while society as a whole.”
Serving as a trusted adviser. That of course means advising the CFO’s immediate boss, the CEO. But, McCullough stressed, it’s even more important to be a trusted adviser to the board of directors, which represents the interests of shareholders. He offered an anecdote to drive the point home.
At one of his career stops, the company was experiencing revenue-recognition issues. The CEO told him not to tell “Bob,” the audit committee chair, about it. “If he wanted to be 100% sure that I was going to call Bob, that’s the one thing he should have said,” McCullough noted. “He’d now obligated me to call Bob, because my fiduciary duty is to the stockholders. And I told him that’s what I was going to do, and I did it.”
Communicating proactively. Effective CFOs are forthright in their communication style, he said. If there’s bad news, they don’t spin it, hide it, or delay it. Their communications are “timely, clear, brief, truthful, and once in a while they need to be compelling, although the other four are more important.”
Performing cross-functionally. Most of the CFOs McCullough interviewed said they like working outside finance more than within it. “A lot of them told me that they’re the best person in the company at selling, the best recruiter, the best fund-raiser, the best deal-maker. They didn’t say this in a cocky way. A lot of it is the trust factor.”
One CFO in San Francisco told him that while it’s virtually impossible to hire a lead engineer in the area, he was able to do it. “The reason is because he made the effort,” McCullough said. “The CFO gave the guy an hour of his time, and he was flattered. It was about trust: again, there was no spin. It was, this is why we need you and this is the direction we’re going in.”
Master deal-making. The key here is an ability to identify opportunities and risks, not just negotiating deals. Several of the CFOs McCullough interviewed spoke of a mind-shift they experienced at some point in their careers, when they began to focus on creating opportunities rather than simply solving problems.
That’s not to diminish the importance of and skill involved in solving problems, he said, but their “world suddenly changed” when they began thinking of their purpose as creating an opportunity for growth, for example.
Building elite teams. McCullough often heard from the CFOs about the need to “build a team for where you want [the company] to go, not where you are today. Think three to five years ahead.” Team-building skill is especially vital today, he added, given the shortage of talent “in places where the innovation economy dominates” and the proclivity of “20-somethings” to switch jobs every couple of years.
Maintaining financial expertise. McCullough noted that every year recently there have been more financial restatements than the previous year. “Sometimes there is a lack of focus on the financial accuracy part of the job,” he said. “It’s less sexy than all the wonderful strategic, cross-functional, and operational responsibilities. But while ‘GAAP may be crap,’ as a former boss of mine used to say, never forget that the F in CFO is for financial.”