I used to engage in the debate about whether the right structure at a certain stage of business evolution was to bring in a COO. The argument was that bringing in a “been there and done that” executive to run much of the day-to-day operations was the right move to allow the business to scale. Such a structure typically enabled the founding CEO to remain as a leader and a visionary, and often to continue to drive the go-to-market processes. Over time this arrangement proved to be the wrong one more often than the right one, as decision making was often ambiguous. People wanted to follow the CEO yet they reported directly to the COO. Often not only the organization but also the culture became bifurcated.
When a company is at that stage where an infusion of experience, operational focus, and financial discipline are required to take the business to the next level, I am increasingly in favor of an operational CFO.
What is an operational CFO? Well they come in different flavors but they are more likely an MBA than an accountant. Their skills are in FP&A (also known as financial planning and analysis) versus GAAP. They have business experience and often came to the CFO role from another function.
What is it that I like about this role?
Bottom line. An accountant tells you the score. An operational CFO helps you to score more and thus increases the odds that you will win.