Pace of growth, industry size and sector, and company culture impact what capabilities are needed, making it difficult to have a universal rule of thumb. However, identifying inflection points in an individual company’s life cycle helps finance professionals prepare for the future.
“The key thing is step back and take some time to think about these requirements,” advises Rick Payne FCA, head of the Finance Direction Programme at the ICAEW. “It’s something that a lot of people want to be able to do, but it’s so easy to get sucked into day-to-day, there are so many operational things you have to do.”
The key issues to examine are: the quality of the KPIs and whether they accurately reflect the cause and effect relationships within the business; the ability of accounting infrastructure to keep up with growing complexity; and if you have the right skill set.
In a smaller businesses the CFO can be a floor-to-ceiling role, which switches between being involved in the detail and developing strategy. As a business grows, you have to get used to building a team, delegating and not knowing everything that's going on.
Metro Bank’s CFO Michael Brierley offers an extreme example. He’s steered the business’ finance function from implementing a payroll system as its first employee to having thousands of staff and a £15bn balance sheet: “When I get my payslip every month it has ‘1’ in the top right-hand corner. There was nothing when I arrived, we were looking at a blank sheet of paper,” he told AccountingWEB.
Brierley’s adamant you can learn on the job. That a single head of finance can be responsible for scaling a business from nothing and building a finance function.
Payne suggests adapting to a growing team is possible too, provided you have the basics of being a problem solver, good communication, are adaptable and have good judgement.
“There's a mindset that's planning, thinking ahead and mapping the strategy, when the reality is that you also have to be adaptable and opportunistic. CFOs grapple with that tension. How much can I plan and how much can I free things up and let things happen?” He says, adding that persevering through the growth journey can be hugely rewarding.