CFO-function taken to a new level
A private equity firm has acquired a medium-sized service company and has identified shortcomings. Immediate implementation of a new reporting system, and annual reporting in accordance with IFRS is required. Time is too short to recruit a new CFO, and they hire a qualified interim CFO instead.
- Take the CFO function to a new level.
- Review routines and working methods in order to make them more efficient, and build trust within the organisation.
- Produce a quarterly report in less than a month and compile an annual report, both in accordance with IFRS.
To be able to take action the interim quickly needs to create stability and security. Since there was no trust within the organisation the first task for the interim was to build a level of trust with both the staff members, the management team, CEO, board of directors, and owners.
– The feeling should be: ”here is someone who is capable”, who is pragmatic, and creates stability and security.
The owner demanded progress. As an interim I am quite dependent on the people around me, and implementing change is facilitated by my showing up early on. This creates a virtuous circle. Social skills are a must and it helps to be a little older, with an inner sense of security, in order to be able to evaluate and prioritise better. I am also clear in stating that I am executing an interim assignment, so that the staff members know how to relate to me.
The organisation had seen better days. The finance department was ill regarded, the manager had too many direct reports, and the employees felt that no one was listening to them.
– I spent a lot of time speaking to as many as possible, really listening to their problems. This was much appreciated and reignited the spark and the enthusiasm for work.
Already after three weeks the company’s first proper quarterly report could be presented. Since the CFO was still at the company, tasked with other duties, the interim could concentrate on driving change and the new reporting system.
– A regular CFO can, broadly speaking, survive by printing out instructions in his office. That does not work as an interim. I have to venture out into the organisation and be an ambassador for the department. Through selling myself I can gain acceptance for my ideas. In order to drive change, I must associate with and respect people.
REMEDIED THE DEFICIENCIES AND CREATED NEW ROUTINES
Other necessary competencies of an interim are technical skills and “craftsmanship” experience from various disciplines. Another requirement is a highly-developed ability to communicate, in order to share what is done and why.
In a short while ongoing work was organised, inefficient working methods were altered, and the most obvious deficiencies were remedied. Clear rules and routines were circulated – spiced up with some change – since they old ones were no longer fit for purpose. Other parts of the interim’s analysis had to wait for the permanent CFO.
- I requested new tools for reporting and suggested that the manager should not have so many direct reports, and that the payroll department ought to be outsourced.
HUGE ADDED BENEFIT IN A SHORT TIME
It feels good to be able to do so much good in such a short period of time]. Nowadays I am a full-time interim. I like to constantly experience something new, not having to get stuck in a routine, to see the potential and to create favourable conditions for everyone to do a good job.
It is easier if the assignment is well defined, so that the interim knows what to relate to and can prioritise properly.
Another advantage is not having to be politically correct, not getting caught up in office politics, but having the ability to question things. Often, the outcome is then so much better.