Getting the board on side and willing to adopt your way of thinking as a CFO goes right to the heart of what makes a successful CFO, according to former Shop Direct FD Mark McMenemy.
To be an effective CFO or FD, not only do you need to understand the business over which you sit, but it’s all about relationships: “If you are going to be successful as a CFO you have to build trust with the team,” McMenemy said. “They have to trust you and you have to trust them. That can only be done if you spend time together.”
McMenemy’s first executive experience was working as the CFO for Marks and Spencer-owned Brooks Brothers based in New York, which he described as being a fantastic stepping-stone. After Brooks Brothers he went back to Marks and Spencer and following that has been FD for a number of UK retailers including Clarks, Mothercare during its crisis period, Monsoon, Accessorize, and most recently Shop Direct.
To be an effective finance director, one of McMenemy’s rules is that if during a meeting he doesn’t agree with someone they will sort it outside of the meeting.
“You can challenge someone in a meeting but there is a clear difference between challenging someone and setting someone up. I will never do that as it only leads to dysfunctional teams,” he said. “You have to get people to open up to you about what their concerns are, and you have to help them solve those concerns. You have to be open with them about what your issues are.”
Over time that helps build trust.
With that trust relationships develop over time, allowing you to achieve what you want to as a CFO.
McMenemy warned that if you don’t establish that relationship you will have a continuous battle on your hands: “People will not trust you, and you will not trust them. I start from a position that I assume the person I’m talking to is straightforward and honest. I approach every situation like that. Yes, unfortunately some people will let you down, but 99% of people won’t. If you approach it from that perspective, rather than from a perspective of suspicion, I think you will get a different reaction.”
He added: “If you are in a tricky situation with a colleague and they see you supporting them in a meeting the relationship transforms and trust builds. The trust allows you to shape different aspects of the business and to take it forward in a cohesive way.
Part of the secret to establishing trust and building relationships comes down to McMenemy’s ability to boil down complex issues into simple and easily communicated matters.
Rather than diving in and trying to solve issues himself, he starts by thinking who is the best person to solve it? He pulls together who he needs and then establishes the urgency versus the importance - a distinction that often gets lost.
He sets the timeframe and with the team breaks down the problem into its component parts. He then delegates who is doing what, agrees the response team and the response method.
The next part is trusting people, he explained.
“The people I have working for me know much more about the specific aspects of the business than me. Trust your people and their professionalism. Have an open door for people to see you, which goes back to the need to create time to do that,” he advised. “Once you have collectively agreed how you will deal with that complex issue communicate it.”
McMenemy lives by the Albert Einstein quote: ‘If you can’t explain it to a six-year old, you don’t understand it yourself’.
“That’s pretty much my method for all complex situations. It also gives people ownership. Rather than being imposed, if they are involved in creating a solution they will own it and they will drive it through.”
He added that soft skills are massively important to the role of CFO.
“I’d go back to my earlier point of building relationships. The world is built of human beings. The role of chief executive is the loneliest job in the world. Who does the chief executive talk to? Who is his real confidant?” McMenemy asked.
“All people are different: Some people are quite robust and others are quite fragile. You have to support different people in different ways. That means listening carefully to what they say. To be a good listener you have to make time to listen. That links back to my earlier point about delegation. Human beings run businesses and you have to understand what makes people tick.”
Retail finance director Greg Pateras succeeded Mark McMenemy as group finance director at Shop Direct following McMenemy’s decision to retire as a full-time executive earlier this year.
