TRANSITION CFO : ZOOM ON A SPECIAL JOB
The job of interim CFO is a special one, which requires many skills. Here is a closer look at a specific job…
Administrative and financial management: the CFO profession
The CFO must have a strategic vision, or at least be able to share that of the General Management (and this even more than all the other functions of the company). Because it’s him who raises the funds, leads the road shows, convinces the bankers, the shareholders, the board of the Group, builds business plans.
In all these strategic aspects, he must be able to go into detail, if indeed a business plan combines strategic vision and precise accounting calculation. Under these conditions, how reconciling strategic vision and almost finicky control of the accounts?
Especially since the CFO is not a direct contributor to the value of the company because it does not produce the products and services directly, does not sell them, and does not transport them. He does “only” count.
However, the Administrative and Financial Director is almost always part of the Management Committee, alongside the Commercial or Industrial Director. This can sometimes be tricky for him, because he points a finger at operational shortcomings, without contributing directly to the added value of the company.
So what about a transitional CFO?
The missions of the transition DAF
Interim Administrative and Financial Directors must manage the same things… but faster and stronger.
In addition to its managerial qualities, in finance transition management, as in all other functions, it is a question of going faster and stronger than in a traditional function.
This is the pipe theory: the tighter the pipe, the greater the pressure inside and the faster the flow.
This dichotomy between strategy and attention to detail becomes a real challenge in interim management. Hence the interest of working with oversized DAFs, which can almost automatically set up or monitor the control tools and go into the details of the figures.
And it is also good that the company’s strategy, although supported by the CFO, is not co-constructed with him if he is in transition.
Historically, interim management has developed, in Europe at least, via CEO assignments, but also interim CFOs, in particular this has been the result of Private funds
Equity, which have delegated Chief Financial Officers to their investments, with the dual objective of putting cash management under pressure so as to be able to raise it quite efficiently, but also of monitoring, or even controlling the action of the CEO of the investment.
The interim Chief Financial Officer then plays a leading role and must have solid experience.
Professional experience of a transition CFO
We generally expect the transition CFO to be quickly operational. Often comes then, and this is a difference with the recruitment of DAF in CDI, the question of the control of the systems of information.
On several occasions we have been confronted with decision-makers asking us for profiles with experience of this or that ERP in particular (when it is not a matter of completely finishing it
Even if we manage to make these decision-makers understand that it is useless to know such specific software precisely, we must admit that it is preferable for a transitional CFO to be really very comfortable QUICKLY with the company’s IS. Because he will have to enter these IS quickly and draw from them just as quickly the elements he needs for his mission.
If we add to this the fact that the missions of CFO can consist in structuring the organization, in improving it, we are even more entitled to expect from the CFO of transition that it is a little also DIS.
Beyond the CFO, we are now seeing more and more transition management assignments in the Finance Department, in treasury, in Management Control, in consolidation. Companies have strong needs for spot actions on specific links in their financial organization.
Sector of activity of the interim Administrative and Financial Director
Finally, in interim management, we find that the position of interim Administrative and Financial Director is the most multi-sector.
An interim manager (like an interim director) can intervene in many sectors, including areas unknown to him. Because the profession is very standardized. Ultimately, the “debit equals credit” rule, well known to accountants, is valid at all latitudes.
Accounting principles, cost price calculation methods, management tools, financial analysis methods, reporting with operational teams and to the Group, etc., remains valid regardless of the sector of activity, and requires little adaptation.
We certainly find in HR, in industry or in IS, transverse methods and tools, but which must adapt to the specificities of the company or products. DAF tools, on the contrary, take the reality of the company and fit it into their format.
What does a transition CFO mission bring?
Calling on a transition CFO mission is above all:
- tools implemented and left available;
- but also a better measure of performance
But this structuring allows the company that uses a transition management mission in DAF to change dimension. With an interim management mission, the company can QUICKLY go from a situation of disorganization to a war machine.
What a difference between false and/or late reports, a vague idea of its margin rate, mainly reactive relations with its bankers, the administration, the shareholders, and an oiled organization which knows how to answer all questions, which enlightens on the future (in any case near), who knows how to determine – or even demine – problems in advance, who can be proactive with their stakeholders?
We can affirm that the value of a company can really increase by several points if it shows an impeccable financial organization. And this can be quickly put in place with a transition management mission in the Administrative and Financial Department.