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Stumped from Twin Cities asked:

I joined a large, private manufacturing company as a finance director about 2 years ago. I thought the financial reporting was odd when I joined because the VPs of Finance of our divisions didn’t have a balance sheet or cash flow statement, let alone a cash flow forecast. Nobody in the divisions has line of sight to a full P&L beyond the division president and his operating committee. And only the division president answered for a P&L - everyone else just had cost center duty.

Our group CFO has been in the role for 20+ years and said this is all because we’re privately held, and the owners want everything close to the chest. The VPs have all been with the company for 20+ years, and I’m beginning to think they brought in a few of us “outsiders” for validation (which we aren’t giving) instead of best practices.

I’m becoming increasingly concerned there is potential for significant risk even though we pass an audit by a big 4 (famous last words). How long do I stay with a company and try to impact change before deciding to cut bait and move to my next opportunity?

Hey Stumped… thanks for the question.

What you describe is not uncommon in privately held companies. They can be fiercely private. Especially family-owned businesses. That can lead to strict ‘need to know only’ type information rights in the business. I’ve seen this myself before first-hand.

This will be frustrating and unsettling for you. You are probably thinking ‘What is there to hide?’ The answer is probably nothing (other than the shareholders not wanting anyone to know how much money they are making). But there is, of course, the possibility that there are undiscovered issues in the finances too.

Ultimately, if your CFO isn’t driving to change this information-sharing policy, nothing is going to change. And with 20 years in the seat, it sounds like they aren’t going anywhere soon.

So, it’s time to be realistic… nothing is going to change. If you aren’t getting the learning you need from the role, it sounds like you should plan to go somewhere else. Somewhere you can get the growth & acceleration you need.

BUT… if that’s your plan, then why not have one forceful go at trying to change things, before you head out. Sit down with the CFO, be brutally frank about your concerns, and see if it changes anything. If it works, then you can hang around to see how things change. If they don’t then you have your answer.

And if you piss your CFO off with your bluntness, you also have your answer.

Just make sure you have some irons in the fire before, so this becomes a low-risk play.

Best of luck.

FreshPerspective from London asked:

I recently joined a company in a Financial Controller role, knowing there was a vacancy in the CFO position that I wanted to position myself for eventually. Within 6 weeks of being with the Company, they opened up internal applications for the CFO role (much sooner than I expected).

I want to apply for it, but recognize that I’m up against people who have been with the Company for years and I haven’t yet had an opportunity to prove myself here. Any advice for how I can frame my newness as a positive that is compelling?

Hey FreshPerspective, interesting question.

My gut feeling is that this is a long shot. You were hired to do a job, and you are six weeks in. You’ve proven nothing yet.

But long shots sometimes pay off. So it’s worth a go.

Book a meeting with the decision maker and tell them you’d like to share your initial thoughts, six weeks in.

Take your thoughts on three simple slides:

• What is working

• What is not working

• What are the biggest priorities

Keep it simple, use those headings. A handful of bullet points under each.

Build some trust and confidence in that meeting, and show you are thoughtful. Blow them away if you can.

Then with fifteen minutes left, land the bomb:

“I know this is premature. But I don’t think either of us was expecting a CFO vacancy so quickly. I joined the business because that’s the job I want, and I know I’ve only been here six weeks. But I have a bit of a feel for the place, and I think I could do it. What would you need to see from me to consider me for the job?”

Then see what they say.

As I say… it’s a long shot, but as the late, great Bill Withers said, “No one can fill, those of your needs that you won't let show.”

Bturtle from New York asked:

What's the optimal FP&A team structure? How do you balance costs that are centrally managed (e.g. T&E policy, Real Estate) vs. those that are owned by business unit owners (discretionary costs)? Corporate FP&A vs. Business Unit FP&A?

There is no one-size-fits-all.

The right structure is the best structure for your business. Especially in FP&A where you need to match up against the wider business. Remember, finance is a supporting function - it needs to adopt the structure that best helps it support the business.

There are some common principles you can use, though.

FP&A titles are broad and can mean lots of things. So the question is what is the actual work?

If the work is business partnering, then try and get this as close to the function it is partnering as possible.

If they are partnering operations - get them on the shop floor. Partnering sales? Get them sat with them. IT? Get them sitting with the IT function.

The hard bit is stopping them from ‘going native.’ So you need the right touchpoints to make sure you keep them on a finance agenda while serving the business.

If the work is financial and strategic planning, then you want to bias that more toward centralization. Coordination and context are important for good financial planning.

Whether that is best held at a business unit level or corporate level depends on how much autonomy your business units have vs corporate.

The question of structure is a huge one - I wrote more extensively on it here. I hope this helps you.

Thanks for your question.

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Disclaimer: I am not your accountant, tax advisor, lawyer, CFO, director, or friend. Well, maybe I’m your friend, but I am not any of those other things. Everything I publish represents my opinions only, not advice. Running the finances for a company is serious business, and you should take the proper advice you need.