Traditionally, a company might groom its Controller to ascend to the role of CFO, either as part of a long-term management plan or upon the former CFO’s departure or promotion. It makes sense on paper, since the Controller and CFO work closely together, sharing responsibility for the back office. However, as discussed in the blog titled 3 Common Mistakes by Management – through the Eyes of a CFO, more is expected and needed from the CFO in these changing times. These responsibilities include strategizing with upper management to develop tactics for managing the growth of companies. This makes the jump from Controller to CFO more challenging than ever. In layman’s terms, it’s like asking a historian to become a prognosticator!
Much of the Controller’s job is preparing and reviewing historical data to give upper management an accurate portrayal of the company’s past performance. The CFO is more forward-looking, asked to take that historical data and make managerial decisions. From a job where everything tied out neatly (debits equal credits!) Controllers might struggle with the transition.
What is recommended?
- If a company interviews prospective Controller candidates with the intention of eventually promoting the Controller to CFO, managerial and people skills are just as (or even more) critical as accounting proficiency. Do the candidates possess natural leadership skills? Do they have the aptitude to become leaders? What level of hands-on training will they require to develop or fine-tune their competencies? These are some of the questions that the interviewers should consider during the hiring process and in laying out a road map to aid the Controller’s rise to CFO.
- Involve staff in management meetings early and often. Don’t wait for the CFO to leave to start inviting the Controller to meetings! The same goes for other staff members. Observing the company’s executives in action provides the Controller and fellow staff a model of the way to conduct business in a professional and managerial setting.
- Organize periodic “teach-ins.” This was a big hit at my first Wall Street firm. Once a month, we organized a company-wide lunch meeting, an opportunity for members to talk shop across departments. One month, an analyst might speak; the next, a member of the Marketing or the Accounting departments. The Controller can benefit in three ways:
- 1) meeting with other division heads to discuss tactics helps the Controller to better understand the overall business
- 2) the Controller can improve managerial skills by involving members of the back office in these presentations, and
- 3) the Controller can demonstrate the willingness to assume a leadership role by volunteering to speak, and then by effectively educating employees of the importance of the back office function.
Written by Ray Petrino, founder of Hemera Financial Solutions, LLC, provider of part-time, interim, and contract CFOs, Controllers, and Directors to businesses of various sizes across diverse industries.