“the biggest challenge is the pace at which we (PE firms) need to create value... ” - Operating Partner talking about CFOs who don't make it. An "unobvious" part of the #CFOs job is to drive the velocity of decision-making, execution and adaption. The inability to do so is one of the main reasons you'll hear CFOs fall out of favor with sponsors. In many organizations, the CFO (along with the GC) are seen as slowing the clockspeed of organizations. Here's why it’s important: If you're not rapidly deciding, executing and adapting then you aren't learning and iterating at pace needed to achieve the investment thesis or drive information back into the organization. When I spoke behind Harry Gruner at the JMI CFO Conference, he told their CFOs "we love slow competitors". I then picked up the mantle to talk about the CFO's role in driving tight OODA (observe, orient, decide, act) Loops. The CFO doesn't do this alone, he/she has to partner with the #CEO and #CHRO to drive velocity of decision-making and adaption. I use the analog of a gyroscope. In a gyroscope, angular velocity (spin rate) is what creates stability and balance and protects it from being buffeted by external forces that could knock it off its axis. It's the internal momentum and alignment that ultimately allows an organization to generate external momentum. It keeps the company balanced and aligned, allowing for controlled growth. It ensures that each part of the business—finance, sales, operations—works together in a stable trajectory toward long-term goals, rather than wobbling and losing control of direction that could lead to panicky pivots, inefficiency, wasted resources, or missed opportunities. When we talk about Performance Leadership in our PE Accelerators (link below) - driving operational cadence/clock speed is one of the four key components of performance leadership. ??performance leadership ??enterprise leadership ??transformational leadership ??insight leadership ??strategic investment leadership If you want a quick read on your clock speed - analyze your meeting cadence and outcomes. Do they drag on and result in milk toast decisions? Or do you quickly get the information out, diagnose the issues and get moving? Diagnose - Do - Refocus - Repeat
Florian Pecher
4 个月
Very insightful as always Scott! Especially your point around driving tight OODA loops can be a game changer - gets the CFO out of being “stuck” and creates that cadence. In my experience, CFOs can’t always put that model straight into practice due to softer factors - their narrative or story of limitations and limiting mindsets. Might need to work through both, the mechanics and psychology.
Michael Richards
4 个月
Your gyroscope analogy is ace, I’m going to steal this :)
Executive Search - Interim and Fractional CXOs - PE Executive Accelerators
4 个月https://www.pexcelerate.com/pe-cfo-accelerator-overview