The New CFOs

The New CFOs

trends by Dave Szymanski | Tampa Bay Editor

CPA Tim Norstrem knows the value of financial professionals, but he's trying to get others to see them as more than just numbers crunchers

With the dawn of Sarbanes-Oxley, senior-level accountants and some CFOs on the Gulf Coast left the stability of full-time positions for lucrative consulting careers.

But now that many firms are Sarbanes compliant, skilled financial professionals are looking to return to CFO roles.

But they are returning looking for a modern mold - the role of CFO as a dynamic leader, a revenue-generator, not simply a numbers cruncher.

The stereotype: Someone giving the sobering, deliberate, sometimes plodding, cautious rear-view mirror speech at company meetings.

The new reality: The forward-looking CFO, the CEO's partner, who still crunches numbers but can also be creative with financing, refinancing and a host of other tools, to generate revenue and propel growth.

Although Norstrem's profile clients are growth companies in the Southeast, his customers also include large established businesses such as Jabil Circuit, Tech Data, Busch Gardens, Coca-Cola and Hard Rock Cafe.

One reason demand for talented financial professionals is out there is because smaller companies are requiring more sophisticated financial professionals to help them grow. A $10 million to $16 million company used to use just a bookkeeper CFO. Today such a company often uses sophisticated financial indexes to help them set up metrics and grow the business.

Job seekers have leverage because demand is higher than supply. But sometimes companies are unwilling to pay what it takes to lure a good CFO.

"Some of the companies I deal with are willing to lay it for a vice president of sales, but not for a CFO because that's a cost center. They perceive it that way," says Norstrem, 43. "Now, with private equity markets and financing, the right vice president of finance is just as important.

An evolution

Others executives agree, but see the CFO role evolving over time.

Arnie Belini, CEO of Connectwise, a Tampa-based information technology and software firm, says the CFO has been pushed out of the classic CFO role and into a role that looks at the company holistically.

"Sarbanes forced that," Bellini says. "It makes sense they'd come back in a larger role."

George Pollock Jr., CFO at Switch & Data Facilities Co. Inc. in Tampa, summed up the CFO's role as the strategic advisor to the CEO.

"With Sarbanes and Enron, there is a heightened need for internal controls," Pollock says. "The CFO has always been strategic advisor. The CEO needs to hire people a lot smarter than him. The CFO has always been a lot more."

Pollock has been CFO for eight years and his role has evolved with the growth of his company. He once managed its Information Technology and real estate departments, but doesn't now, as the company has grown and gone public.

Bellini says technology is reshaping the CFO's job. Technology has produced management information systems, which help a company be more efficient.

"With the advance of technology, I think I'm seeing in small- to mid-size businesses where the role of CFO has bled over to the CEO, and the CEO's role has bled over to the CFO," he says. "They have to be joined at the hip."

Jack Rybicki, a partner with Larson Allen LLP, an accounting firm in Tampa, and a former CFO, also sees the evolution, but not as a result of Sarbanes, more as a result of maturing companies that want to grow faster.

"From a perspective of the CFO, the role has been evolving for the last seven to 10 years," Rybicki says.

Rybicki was CFO for Go Co-Op Inc., an e-commerce company. Besides preparing budgets, Rybicki would manage operating segments and negotiate contracts with customers.

"Today's business is so complex, the CEO and president can't reach into all aspects of a business," he says. "The CFO goes beyond just tracking and budget. Now, a chief accounting officer reports up to the CFO, and the CFO has the more dynamic role."

International standards

Although technical, one other trend affecting CFOs is the conversion to international accounting standards.

Currently, U.S. CFOs and accountants used the GAAP standard, or Generally Accepted Accounting Principals, enforced by the Federal Accounting Board.

Financial statements are required to be done in GAAP. But today, more than 100 countries work on international accounting standards, which are different. And with the globalization of economies, a uniform accounting practice is becoming more critical.

The U.S. Securities and Exchange Commission is allowing American companies to file financial documents under international standards. There is increasing pressure for GAAP to be eliminated. Many U.S. accountants are not familiar with the international standards, so they will need training.

Tips to find a good CFO

If you're a business looking for a CFO, here are some tips offered by placement firm Norstrem Associates:

• Know exactly where your company is going and where you are taking it. That will determine the specific skill sets for your new CFO;

• Determine if it is important to have someone from your industry or not, and why;

• Have investors and owners lay out a plan of how to get where you want the company to go;

• Come up with a realistic salary for the quality of the CFO you want. A middle-market company, with revenues of $10 million to $75 million, may have to pay a new CFO $125,000 to $175,000, plus 1% to 3% ownership of the company;

• Consider the CFO position as a revenue enhancer, not a cost center.

REVIEW SUMMARY

Company: Norstrem Associates

Industry: Executive placement

Key: Get companies to recognize the diverse value of financial executives.