Not all Chief Executive Officers (CEOs) are groomed for the position, no matter how well they performed in other executive roles. There’s no instruction manual waiting for them when they slip behind the CEO desk. Even if they undertake some training, it does not automatically prepare them for leading a modern-day organisation, many of which face massive market disruption because of new technologies.
In such an environment, CFOs can play a greater support role, particularly as they are often older and hence, more experienced than the CEOs to whom they report.
But good working relationships between CFOs and CEOs start with a good cultural fit, believes Craig Bernhardt, managing director of Robert Half Executive Search. He says age isn’t considered a barrier when you have similar working styles.
All very well; but how do you produce a working relationship that builds on experience while moving the age differential to the periphery? Start with not forcing senior executives onto younger CEOs. That’s the advice of veteran CEO Joel Trammell: “Otherwise, it’s a kind of adult supervision.”
A successful CEO and entrepreneur with a 20-year career in IT-related software companies and currently CEO of Khorus, Trammell has written books on being a successful CEO and runs an annual CEO seminar.
He’s not surprised by the youthfulness of today’s crop of business leaders, especially those in the IT sector who can start a business with a few computers in a garage. And while CFOs are regularly exhorted to go beyond their number-crunching role for the good of the enterprise, it does not include babysitting.
Trammel is not a fan of co-CEO positions, emphasising that the CFO works for the CEO, not for the board directly. He firmly states there can only be one CEO. It needs to be clear from the outset what their roles are, what decisions the CFO can make, and what decisions the CEO gets to make.
Ian Wainer, the CFO of DanozDirect, who has run a listed company and founded his own business, is unequivocal. “The key is that you don’t force yourself on the CEO. You allow them to develop and facilitate that growth.” Wainer, who’s been older than most of the CEOs to whom he’s reported, describes his working relationships with CEOs as “very, very positive”.
He attributes his success by building up what he calls, “the trust process”, which leads over time to the CFO becoming the CEO’s trusted adviser.
“I would carry out what I said I would do. I would talk openly and honestly but in a non-threatening way. Over a period of time the CEO would see that I delivered on my promises; that it was good sound advice with good insights. Only then can that relationship happen,” Wainer says.
“Once a trusted relationship is built up, then you become the trusted advisor. That is when the real magic takes place and they realise that they can draw on you. The key to this relationship is the ability of the CFO to tell real stories that provide clarity to the CEO.”
It was a lesson Wainer learnt from author and leadership teacher Dr Mark Strom, who stresses the importance of not only telling stories based on real experience, but also explaining what happened when a certain approach was taken.
Trammell considers those insights invaluable for a CEO, particularly a new start-up CEO who has done nothing but had success and raised money. He referred to the current uproar surrounding the sexual harassment and discrimination allegations buffeting San Francisco-based Uber. “Uber is probably the best example in the recent press of a culture just getting away from a CEO. The organisation is no longer like a start-up where the founder knows everybody in the room. Somebody with experience can say ‘I have been in large organisations before, I have seen how things can go awry. Let’s think about putting in place various systems such as anonymous feedback mechanisms.”
Because older CFOs have lived through multiple business cycles, they can ask a different set of questions when the CEO faces an unfamiliar situation. They can provide what-if scenarios when the time is right. Always having options and presenting those thoughts around other scenarios can prove extremely constructive to a CEO without that depth of knowledge.