by Rob Joseph, Director, BeaconCFO Plus
Understanding the Talent-Focused CFO
Like millions of readers worldwide, we continue to be fans of the management classic Good to Great by Jim Collins. Despite attempts to debunk some of the case studies in that venerable text, the principles have stood up in the 21 years since its publication. This is especially true of the importance of having the “right people on the bus, and in the right seats.”
No matter your industry, the success of your business relies on talent—not only hiring the right people but retaining them for the long run.
“Nothing we do is more important than hiring and developing people. At the end of the day, you bet on people, not on strategies.” – Lawrence Bossidy, Former COO at General Electric
In our experience, many of the difficulties encountered by companies with otherwise good business plans and products are caused by people entrusted with executive power they are unable to carry out with positive effect. The reasons for failure vary. To quote another business authority, Lawrence J. Peter, the author of The Peter Principle, many managers are promoted to the level of their incompetence. (See The Peter Principle, by Laurence J. Peter, New York, William Morrow and Co., Inc., 1969.) [The exact Peter Principle is, “In a Hierarchy, Every Employee Tends to Rise to His Level of Incompetence.” If you have not read The Peter Principle, you should seek it out, even though it is currently out of print. It is readable and witty, and would indeed be hilarious, except that it is sadly true.]
We have also seen capable people slotted into positions for which they are unsuited, simply because they were present on the staff when a vacancy arose. A temporary accommodation becomes a permanent—but inappropriate—solution, because of inertia or a lack of alternative candidates. I know of one local manager, a great guy, who would be a huge success if he were his company’s head of engineering. Instead, he is the company’s operations manager, with the result that most of the production staff is in perpetually open revolt against him because of this individual’s astonishing lack of people skills. Nice guy, wrong job.
With so many challenges facing HR departments and hiring managers—ranging from the pandemic, a universal shortage of skilled workers, and high turnover rates—CFOs have an opportunity to make an impact on hiring decisions and talent acquisition strategy. Personnel and position mismatches create risk. As the company’s de facto risk-management officer, the CFO is often charged with pointing out these risky mismatches to the management team and advocating for personnel changes. Again paraphrasing Professor Peter, the critical corollary to the Peter Principle is that “[All productive] work [in a profitable company] is accomplished by those employees who have not yet reached their level of incompetence.”
Talent significantly affects profit and loss for your organization. Because a CFO is armed with metrics and data, he or she can help with both hiring and retaining employees. As they have a vantage point across all departments in your organization, they have a strong understanding of the impact of employee turnover, such as lost revenue and money spent on training. They can also partner with HR to make the most of the team you already have in place by investing more in your current staff and creating a long-term retention strategy.
A talent-focused CFO will be able to do the following:
- Define and guide company culture. As a CFO looks to the future, they can pose important questions about the company’s mission and how current hiring decisions are working toward long-term goals.
- Create a comprehensive hiring plan. In the changing workplace environment, you likely employ not only full-time employees but part-time remote workers, contractors, and consultants. A virtual CFO can help you manage your staffing and promote ROI.
- Build a strong employee experience. From benefits and training to ongoing retention strategies, your CFO can work with your HR team to foster a meaningful and fulfilling employee experience. This boosts retention—and protects your company’s bottom line.
- Drive training and development. Your CFO can help you identify key knowledge and skill gaps left by unfilled positions and work to fill those gaps by investing in the training and development of your current employees.
Strengthen Your Retention With a Virtual CFO
Speak to the BeaconCFO Plus Team
All of our virtual CFOs have experience across multiple industries and would be an asset to your organization’s talent and retention efforts. Reach out to learn more about our outsourced CFO services and request a complimentary consultation.