Recently I have noticed a number of companies assigning the title of CFOO to the current CFO. CFOO is a combination of CFO and COO and has overall responsibility for both Finance/Administration and Operations. I am sure most CFOs would agree that Operations executives are not technically qualified to be CFOs. Conversely, is the CFO qualified to lead the Operations side of the business?
There are two elements to consider in answering this important question: leadership and technical skills. Executives need leadership skills to provide the guidance and direction needed to achieve the organization’s goals. Many CFOs have the leadership and project management background that can be useful in operations leadership.
On the other hand, CFOs who may have excellent leadership skills lack experience with the size and complexity of Operations. Finance functions, while they can be highly complex, tend to be smaller and more tightly focused than what an Operations executive will encounter.
Many CFOs feel they are qualified to lead the Operations side of the organization because they have:
1) Measured Operation’s results,
2) Been involved in inventory and asset management,
3) Set budgets and capital plans for operations, and
4) Witnessed the failings of Operations organizations.
Unfortunately, observing failure is not the equivalent of hands on experience. Think of a time when the airplane you were on had a bumpy landing. While as a passenger you are entitled to say, “That was a bad landing,” it does not qualify you to be a pilot. Operations organizations require experience in production, logistics, supply chain, warehousing, distribution, process improvement, team development and many others.
So what is a CFO to do when presented with an opportunity to expand their responsibilities into Operations? First, assess whether the necessary leadership skills are present, and second, if the CFO lacks direct technical Operations experience, you may need to rely on your highly qualified top Operations managers or bring in a good Operations consultant to create a roadmap for success.
© 2011 – Rick Pay – All Rights Reserved