The SME CFO

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As Seen in CFO Studio Magazine Q3 2015 Issue

By William Craig Chief Executive and Financial Officer, Tarantin Industries

 

TO LEAD OR NOT TO LEAD!

Years ago, leadership was a military concept, but over time it has become part of mainstream business — though it is not always clear what leadership is, whether it can be taught, or whether it can be learned. The business world goes further than the military by making the distinction between leading, knowing what to do, and managing, or getting it done. For the Small/Middle Market Enterprise (“SME”) CFO, it may be a distinction without a difference.

Offline discussions at CFO Studio have raised the issue that a Fortune 1000 CFO’s job is not the same as an SME CFO’s. As organizations decrease in size, roles become less distinct, and nearly everyone, especially the CFO, wears more than one hat. Most CFOs are functionally jacks of all trades. The SME CFO, with fewer resources and the same deliverables, likely has more functions to handle on his or her own. Given the vagaries around what leadership in business means, and the many hats the SME CFO wears, what does it mean to discuss SME CFO leadership?

Many believe the best characteristics of a leader include intelligence, judgment, character, empathy, charisma, and the ability to inspire.

On the other hand, the most sought-after characteristics of a CFO include being a strategist, and —moving down the scale — a catalyst, a steward, and lastly, an administrator.

If we dig behind the words, we realize there exists a great deal of overlap between the characteristics of leader and CFO. While they align in many ways, the divergence is interesting, particularly in the administrator trait. An administrator manages the back-office and support functions. This is what many people think of when they describe a CFO, but it is actually the least important aspect of the position and is not at all part of the leadership profile. Administering is the same as managing, the art of getting things done. So in considering leadership and the SME CFO, being able to administer, or being able to manage, is the least important element of the role.

Understanding this perspective is crucial to the success of the SME CFO as a leader. The SME CFO needs to lead, and needs to grow as a leader, and needs to be a versatile leader, if his or her organization is going to succeed. The challenge is in not getting overwhelmed with administration and management such that the leadership opportunities are not utilized.

The SME CFO does not have the choice to lead or not to lead. All CFOs have the responsibility. They set an example, they focus on results, and they communicate in every direction. They need to know the difference between being efficient and effective, and when to manage and when to lead.

Copyright 2017