I had the opportunity to speak with Jack Sweeney, founder and co-host of CFO Thought Leader and Middle-Market Executive, to get some insights about the role of CFOs in the middle-market and the challenges they face. Jack has many years of experience covering the field of finance, having held senior editorial positions at the CFO Alliance and Business Finance magazine.
Dave Phillips: Hi Jack, when we met a while back you had recently launched your online publication, Middle-Market Executive. Can you tell us about Middle-Market Executive and how the publication has progressed?
Jack Sweeney: Hi Dave. Middle-Market Executive officially launched a little more than 18 months ago. Our goal was to highlight the unique challenges facing middle market companies, which are often quite different than those faced by large enterprise firms. More recently, we started a companion publication called CFO Thought Leader. We podcast interviews with CFOs on a variety of topics related to finance leadership in the middle market. We’ve now posted nearly 23 hours of CFO interviews and have achieved some outstanding digital visibility. When users search the words “middle market CFO” today the top three URLs belong to our content. Essentially, our platforms allow CFOs to master their career narrative and talk about their companies and the key factors that drive their success.
Dave Phillips: In the numerous interviews you’ve done with CFOs in mid-sized firms, what are some of the common issues that you’ve uncovered?
Jack Sweeney: Well, when it comes to organizational leadership there’s a kind of new world order taking shape inside middle-market companies and the CFO is often front and center.
During the “Great Recession”, CFOs were increasingly invited to the strategy table to manage company downsizing to better reflect market realities. As the economy has been recovering, they have found that if they want to stay at the table, they need to get out on the frontlines and offer strategic solutions for growing the business and capitalizing on new opportunities. This is indicative of a general shift in expectations for CFOs. Gone are the days were they could remain in the back office and merely run the numbers. They have to be on the forefront of company strategy and proactively collaborate with both internal and external stakeholders. This has pushed a lot of the more traditional CFOs outside of their comfort zones.
Dave Phillips: In your opinion, what makes a great CFO?
We’ve interviewed more than 60 CFOs to date and I believe it boils down to the ability to communicate and collaborate. Exceptional CFOs have mastered their firm’s narrative and understand that their ability to communicate that narrative is critical to broadening their leadership role. They must be able to quickly explain themselves in the context of that narrative as they reach out to the frontlines and seek to build new relationships.
Likewise with collaboration, they are at ease in engaging other leaders and employees within the organization and say this is why I’m here and this is how I can help you. While this evolved role is now quite commonplace in the largest companies, it has more recently permeated the middle market.
Dave Phillips: What role does technology in general, and cloud-based corporate performance management software in particular, play in enabling CFOs to address issues of business planning, strategy, and collaboration?
Jack Sweeney: In this relatively new world of CFO leadership, CFOs have emerged to become the champions of Cloud technologies. Indeed, Cloud-based tools have empowered CFOs and elevated their influence over IT. The fact that most Cloud technologies do not require internal IT support has shifted the power structure in many companies. The CFO now is a key decision-maker for technology investments not only in finance, but also in marketing, sales, human resources and other departments. We have found that in the lower middle market range around $20 to $50 million in annual revenue, companies are very quickly adopting cloud-based technologies. As these companies don’t typically have large IT departments, CFOs are tasked with evaluation and selection of the right technologies to streamline and integrate business processes. With corporate performance management software in particular, I mentioned that CFOs are increasingly asked to be more strategic. Cloud CPM technology takes a lot the effort out of spreadsheet-based budgeting and planning, which frees up the CFO to focus more on strategy and leadership. It provides them with increased visibility into different areas of the business which enables them to take a broader role in company decision-making. It’s actually a big win for CFOs on multiple fronts so I expect that trend to continue, if not accelerate.
Dave Phillips: If there is one area where you think CFOs should focus to improve their business performance, what would you recommend?
Jack Sweeney: Business performance is both the now and future of finance. At its foundation, it is about optimizing human capital and developing a high performance culture. These are not concepts traditionally associated with finance. Technology plays a key role in gaining insight into the entire organization and being able to associate metrics with human output. By collaborating and engaging all parts of the business, CFOs are also able to gauge the less quantifiable aspects of performance, such as those factors that incentivize employee productivity and job satisfaction. They need to know what excites people and how to reward them, for which the answer isn’t always compensation. By building relationships along the frontlines and leveraging their communications skills, CFOs are better able to disseminate information, align staff to company strategy, and demonstrate leadership both internally and externally. There is a bottom line impact to this approach as it is less costly to maintain a world class organization than one that isn’t quite there yet.
Dave Phillips: Thank you very much for your time and insights Jack. Keep up the great work at Middle-Market Executive and CFO Thought Leader!