Agreeing to disagree: challenging the CEO.
"Listen, you big, pompous blowhard," we've all yelled into the face of some authority figure at least once in our dreams as we jabbed a rigid index finger into the offender's chest, "you're absolutely, completely and totally wrong."
In waking life, however, colleagues who agree to disagree need a little more finesse. A recent survey by Financial Executives Institute and Heidrick & Straggles examining what CEOs want in a CFO shows 87 percent want someone who will challenge them "appropriately." But what's appropriate varies from person to person, company to company and situation to situation. So if you're a CFO who feels compelled to challenge your CEO, you'll need a thorough understanding of what makes your CEO tick - and of just how far he or she can be pushed.
You also "have to pick your shots," according to Martha Goss, vice president and CFO of Booz Allen & Hamilton in Parsippany, N.J. "You have to decide if it's important or if you're being argumentative. Take your own ego out of the equation and be in tune with the person you work with."
"The role of CFO is extremely important," says a former CFO who requests anonymity. "How important depends a lot on the nature of the organization and the business and the chemistry and style of the CEO. The CFO has to be the person the CEO has chosen or reaffirmed more than anyone in any other job. I use the analogy of a good lawyer: One tells you everything you can't do; one tells you everything you could do. The CEO wants a CFO who will figure out what he can do. I've worked for two CEO-types who wanted me to walk in and say, 'Here's why we can't do this.' But they're very much in the minority. Most of the people I know don't function that way." Determining which challenges are appropriate, she thinks, "depends on the way the CEO is and not how he wants to be."
William Hjerpe, who was CFO of Honeywell before being named the Brussels-based president of its European, Middle Eastern and African businesses, encourages the kind of open dialog that cements teamwork. Hjerpe handpicked his CFO and says, "I rely on him to challenge my judgment. I probably depend on him more than you'd think because of my financial background. With a CFO I know I can count on, I can focus on strategy and operations. I look for his contribution to provide us the financial flexibility to pursue our big opportunities and to help me create an ownership mentality throughout the organization. Together, the CFO and I expect every member of our team to 'own' their financial targets."
And does Hjerpe think these challenges have to take place behind closed doors? "I'm not reluctant at all [to be challenged]," he says, "and neither is he reluctant to raise a question in front of the management team. We have an open, spontaneous discussion and brainstorming environment within our policy committee. If you can't have your financial executive question you in that environment, you don't have spontaneity in your staff. For me, it's more frustrating not to be open, and to see the appearance of disagreement on someone's face."
Consensus within the finance function adds strength to the credibility of the challenge. "You can't have the investor relations guy saying one thing, the CFO saying one thing and a controller saying another. They should argue their points among themselves, but then build the same case to the rest of the management team. Without consensus on his team, there's much less credibility in the position the CFO is articulating," Hjerpe concludes.
When the Going Gets Tough
J.P. Donlon, editor-in-chief of Chief Executive magazine, says, "There are times a CFO might be a little too vigorous at challenging and knows, as a result, he might get isolated. CEOs want to be challenged up to a point." Pass that point, he adds, and you may "get the message life is better somewhere else."
On major issues, Martha Goss says you can go to the board of directors if your CEO refuses to listen. But you have to "be careful," and use the board as a last resort after going one-on-one with the CEO. "It's a leverage point people can use, either with the full board or the audit committee. It's the responsibility of the board and audit committee to be made aware of major-level issues and strategy. A CFO can raise alternative suggestions or strategies for discussion. But don't pop that on the CEO in the middle of a meeting; prepare him beforehand. I've seen productive situations where board input [prodded by education by the CFO] can change a CEO's direction."
But when the status remains quo, she adds, "If it's a matter of extreme principle, you have to resign. I've done that. My integrity is terribly important to me. It's difficult to continue in a role if you're not doing what you think you're supposed to be doing. You need the personal courage to speak up if you feel strongly about something."
The keys to mounting a successful challenge, then, would include chemistry, communication, consideration and professional judgment. "A lot comes down to the relationship the CEO and CFO have," Goss concludes. "If I didn't feel I had a good enough relationship, I would feel I wasn't doing my job properly. In any kind of boss/subordinate relationship, there needs to be enough trust and respect that you can have differing points of view. And each of you has to have enough self-confidence that you can say what you think. Work from the basis that each of you is doing what you think is the right thing for the company. Work with integrity. Then, at the end of the day, you have to feel confident that [a difference of opinion] is not a parochial or personal point of view."
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|Title Annotation:||CFOs' management of their CEO|
|Author:||Gray, Carol Lippert|
|Date:||Mar 1, 1999|
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