<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=174246963156137&amp;ev=PageView&amp;noscript=1">
Have a question? Call us toll free at: 877-735-7693

Be a Smart CEO by Learning From The Four Types of CFOs

Posted by Stephen King
SHARE

 Smart CEOs

While larger companies typically employ an in-house CFO to measure and manage the organization’s financial risk as well as financial planning and allocation, most small businesses do not share the same luxuries. As a result, many growing businesses choose to outsource their financial processes such as bookkeeping, billing, and financial reporting.

With a growing number of small businesses electing to outsource their financial processes, many of their CEOs are taking on more of a financial role within the organization. Without having a CFO on staff, the CEO makes major financial decisions and is responsible for reporting, growth, and business strategy.

By looking at the four types of CFO (once outlined by McKinsey & Company), we will narrow down how CEOs can adopt traits from each CFO to become a Smarter CEO.

Download The CEO's Guide to Keeping Score

The Four Types of CFOs

1) The Numbers Expert

This type of CFO traditionally has experience with multiple positions within the finance department, including controllership, treasury, auditing, and financial planning. They are usually an internal hire, and because of this, they tend to hold a great understanding of the inner workings of the company.

2) The Strategist

These CFOs usually are hired from outside of the finance department. They typically have experience working in other verticals, such as operations, marketing, and general management. These folks focus on tightly run operations, the allocation of business resources, and often have a major influence on their colleagues regarding major business decisions.

3) The KPI Advocate

These types of CFO love their scorecards. Many are hired from outside of the organization to provide a non-biased look at performance metrics, cost reports and standardized data. To them, everything is measurable and there is often a strong focus on meeting or exceeding established goals.

4) The Growth and Development Wizard

Although the least common among CFOs, this type is becoming more popular. Growth and Development Wizards are usually hired externally and have years of experience in mergers, acquisitions, private equity and venture capitalism. They keep their eye on the prize of expanding the current business operations of the company.

Download The CEO's Guide to Increasing Profits

Becoming a Smart CEO

Just because there are four established types of CFOs doesn’t mean that every CFO fits into one singular category. The same should be considered for CEOs who operate without an on-staff CFO.

A Smart CEO will embody multiple attributes of each type of CFO. With the help of their outsourced financial services firm, a Smart CEO will pay close attention to bookkeeping and financial management while using KPIs and reports to make data-driven decisions and build better business strategies.

Smart CEOs then use their existing financial data to identify opportunities for growth and can start to make plans for expansion, product line extensions, partnerships, or even mergers and acquisitions.

The CEO's Guide to Keeping Score