Making sure your company has excellent financials is crucial to its success in the long-term, as bad numbers in even one quarter can result in its stock market valuation getting battered, destroying wealth held by investors, many of whom can be your own employees if they have options in their portfolio.
As a company grows in complexity, the CEO will have less time to mind its balance sheet, as they will need to take on leadership roles that will demand increasing amounts of their time.
With no room in their day for important financial concerns, they will need to hire an executive to handle these vital responsibilities.
Known as a chief financial officer or CFO, they ensure that a business doesn’t run afoul of tax laws, keeps revenue and profits rising in an orderly fashion, and they work tirelessly to keep risks to a minimum.
Kingstown Capital has employed an amazing CFO over the past decade, allowing them to elevate their business to unprecedented heights.
Wondering what makes a CFO great? Make note the qualities mentioned below and you’ll secure someone who will help take your company to the next level.
1) They excel at analyzing financial data
As a requirement of their position, your chief financial officer will be constantly dealing with the numbers that your company produces each day, so make it a priority to bring someone on board that can run analysis that will produce actionable conclusions.
The rise of Big Data has made it possible to run tests that can radically transform a company’s fortunes, but this can only be harnessed if you have a CFO that understands what tests to perform.
Executives who can use these conclusions to predict the path of a business or an entire industry will allow the company they work for to have tremendous advantage over companies who are less effective in making the numbers work for them.
2) They are risk minded
By 2017, most economic sectors have felt the heat that disruption has brought to their doorsteps. With no end to the accelerating pace of technological change, risk for established firms has never been a more important topic than it is right now.
With countless bootstrappers looking to steal market share from current players, CFO’s must have a through understanding of the evolving nature of risk in the 21st century.
Nobody is immune from being made obsolete. Kodak found that out the hard way when digital camera sent them broke within a decade.
These days, Jeff Bezos is sending chills up the spines of grocers from Kroger to Winn-Dixie with his recent acquisition of Whole Foods.
Your chief financial officer needs to be able to spot threats before it is too late to take meaningful action. As such, any choices they make should be viewed through this prism.
3) They must understand how to use technology
The rise of technology should not be viewed solely as a threat. Any executive these days should understand how technology can be used to propel their business to unseen heights.
Tech disruption is a very real concern, but its qualities as a force multiplier can give your business a massive advantage.
Having a CFO that implicitly understands this is key, as they can’t be afraid to loosen the purse strings to acquire top of the line equipment or software. Doing do may generate the sort of growth that will leave your competitors eating your dust.