CFO: Communication Techniques with the CEO

In your experience, what are some of the techniques that you've used or have come across that gets the CEO-CFO relationship off to a good start?" Let's say that you join a company tomorrow, what are some of the things that you'd have in mind that would be the first that you'd do with a CEO?

I think broadly speaking, my principle in taking on any new responsibility is to listen a lot and speak little for a period of time. Because you may come into the job with external or public information that leads to questions and views. But I try to reserve judgment until I've thoroughly understood how a business works. Working with the CEO in a well-run company will involve onboarding so that you meet everybody in all your direct reports in the finance function, obviously, but then all of the business leadership, the executive committee, and their direct reports. By the way, meet customers, go to whatever it is, whatever service or product is being produced, understand it, see how it's done and get a sense of how people in the business view it. I think that's a multi-month process. It's a cliché, but I always say, two ears, one mouth, and try to stick to that for a long period of time.

I think one of the things a good CFO does, particularly if they change companies or even industries, is to be culturally sensitive and to understand that whether or not a business’ practices, systems and so forth are optimized, there's still a reason for them. And there are a lot of people who have invested in them, in the sense of worked on them, and think they're good. Understanding that first and then being able to move diplomatically to where you think the finance function needs to be. That's part one.

As you're coming on board the company, part two is understanding what the mission of the company is and understanding what the CEO thinks the mission of the CFO is. Again, that can vary. That can be "our accounting is messed up, and we need to clean up the accounting function", or it could be "we're doing a massive program of M&A and we're going to need capital markets access and the integration of M&A" or it could be "we need a systems overhaul and we need you to lead to the installation of a new ERP or other major systems within the company."

Listen, understand the environment. Next, understand what the mission is, make sure there's consensus around that, develop that as you build your knowledge and your hypotheses about the company. Then finally start to develop data because I think it comes back to the numbers. Well-run companies are managed on the basis of data. That should fuel every decision and every view of the company. So as you gather that, then you can further build your hypothesis and start to enter a dialogue of "we're here and this is where we want to go strategically and this is the mission of the finance function, and here's how I plan to get there. Here's what I need in terms of being able to hire my team. Here's what I need from the business. Here's where I think we could do better in budgeting." Whatever it happens to be, begin to focus on those.

To me, the key of it all is to remain open, take in information, take in data and then start to act or at least to convince others that you will act in a way that benefits the company.

What about communication with the CEO? Is there a certain structure you put in place?

It depends very much on the relationship between the two. When I first joined UBM, one of the reasons that they recruited an American is that more than half of the revenue generated was in the United States. Their thought was that it might be beneficial to have me, the CFO, based back in the US after a period of understanding the company.