The Keeper

This is not your father's CFO

Traditionally, CFOs were finance gurus, you know, the humorless buttoned-down types. CFOs were educated in the areas of business finance, micro and macroeconomics, analytics, and accounting. Often with CPA certifications and prerequisite MBAs, CFOs ran the minutia of an organization's finance department. They mostly looked in the rearview mirror and were the provider of a company's financial report card consisting of balance sheets and income statements. The most complicated work yesterday's CFO performed was dissecting mountains of financial data into small, easy to consume reports for operational management, Board of Directors, and lending institutions.

Not anymore, today's CFO is the "keeper." I apologize in advance to my European soccer-loving friends, as I attempt to make this sports analogy. I only recently became a fan of the MLS team, the Minnesota United, and am quite sure I will miss the nuances of the game that more seasoned fans observe.

In the game of soccer, the big money is spent on the striker, the team’s primary goal scorer. The team maneuvers the ball about the pitch ever trying to assist the striker. The striker gets the goals and the headlines. And if one’s name is Lionel Messi, a $20 million dollar contract is also the award. But there's another crucial position on the pitch. That is the position of goalkeeper. Whereas the striker is the key offense of player, the keeper is the last line of defense. The goalkeeper is the only player that has a view of the entire field of action. Where all the other players are adjusting to their immediate circumstances, the keeper is constantly monitoring the pitch and adjusting his position in accordance with the flow of the game. If the opponents win a breakaway advanced towards the goal, the keeper decides how to best block the impending shot.

In an organization, the CEO is the "money" player, the one who drives the company on offense and rallies all the other positions to work in unison towards a common goal. If the CEO is the striker, then the CFO is the keeper. The CFO is ever watching the actions of the entire company, guarding against deviations in economic conditions, keeping a watchful eye on tax and regulatory advancements and is the keeper of company missions and culture.

The modern CFO is far more active in the operations of an organization. Gone are the days when that position merely maintained and reported on a company's financial health. Today’s CFO must be an expert in a company's tech stack. Since technology is all about data and all data ultimately flows into financial reporting, the modern CFO must understand how a company's technology fulfills that requirement. Thus, in modern organizations, the IT department often falls under the CFOs responsibility.

The same goes for human resources. In most companies, the human component represents the largest expense, greatest liability and is most regulated by local state and federal jurisdictions. Because of the financial and regulatory nature of human capital, the CFO must be intricately involved in establishing compensation models and ensuring regulatory compliance. The CFO, in most instances, is also the position that selects and monitors the company's liability insurance regarding its human capital. Continuing with my analogy of the CFO being the keeper of the company, guarding against HR violations poses some of the greatest scoring risks against the company. As the CFO is always at the rear, ever observing the entire field of play, the “keeper” is always watchful for violations of company policy. Policies, that if not quickly identified and corrected, can catch the upper corner of the net. Just one noncompliant shot slipping past the CFO can end the game and possibly sink an entire season.

Where the CEOs can be idealistic in the way they play the game, the CFO must be realistic. It is the CEO that sets company vision and rallies team players to advance the ball. Overarching strategies, built on sound principles and solid fundamentals, often ignore the nuanced reality of players. Team members’ personalities, external market conditions and competitors’ counter punches affect the team’s performance. The CFO must take all these internal and external realities into consideration when preparing budgets, performing forecasts, and reporting the history of events.

Nowhere is this “keeper” mentality more evident than in maintaining company culture. Operationally, CEOs drive company culture through the various departments they oversee. But is the CFO who performs the role of keeper of company culture. By that I mean when the company offers benefits to its workers as part of its proactive forward-thinking culture, the CFO must be the keeper of those cultural policies. There is tremendous compliance surrounding 401(k) programs and nearly every state in the union now has their fingers in to some version of PTO policies. But more important than those necessary areas to watch, the CFO is the keeper of how the financial obligations of an organization's culture are maintained. The days are gone when the CFO simply reported on financial costs the X's and O's on the field. CFOs must now place value on intrinsic worker satisfaction. In the era of "quiet quitting" the expense of the organization’s cultural goals extend far beyond mere attraction and retention. The CFO must assess and place the value of the productivity of the entire workforce. Therefore, understanding the company's culture is essential for understanding the costs and benefits associated with maintaining that environment.

The monitoring of culture has incredible significance in fulfilling a company's purpose. CFOs operate in the world of percentages, starting with revenue at 100%. All other investments, expenses and subsequent profits are mere percentages of that revenue total. Understanding how culture affects those ratios is the essential task of a CFO. It is not a passive, after-the-fact reporting role. The CFO must constantly monitor all the various players and scoring initiatives within the company as well as keeping an ever-watchful eye on external forces such competitors’ advancements on the field, commodity fluctuation and labor trends. In the world of the CFO, competitors are not just companies vying for market share, some of the biggest competition of a company’s time and resources is government. Understanding how, complying with, and remitting to government regulatory apparats are daunting tasks. How those externals progress through local state and federal governments has a huge impact on company operations. Therefore, the keeper CFO must always be monitoring those regulatory opponents as well.

Your father’s CFO may have been the protector, the person assuring that financial resources were properly secured from over exuberance or malfeasance. But that position was more passive in past day-to-day operational decisions. Today’s keeper is on the field every day. Modern CFOs are actively directing operational activities through financial coaching on budget reaching strategies. CFOs are always looking at a company’s tech stack and analyzing its efficiencies and data integrity. Not only is the CFO responsible for cobbling financial information into cohesive and understandable operational reports, but they must also monitor and gather massive amounts of data from various data silos and analyze it for marketing teammates.

Finally, to be successful in today’s business environment, the CFO must be the keeper of leadership. For no other quality of an organization can have a greater impact on success or failure than overall team leadership. Leadership means staying cool in the box, even when the opponent scores a goal. Leadership means rallying the team after a defeat and setting them back on track. Leadership means assessing the leadership structure of the entire organization and placing intrinsic value on its impact on company purpose. Leadership is, after fighting a 90-minute nil-nil game, recording the point earned and readying the team for their next matchup.