4 Unexpected Challenges New Cfos Face in their First 90 Days and How to Overcome Them
Stepping into the role of a new CFO can be a daunting experience, filled with unexpected challenges that go beyond financial expertise. This article delves into the surprising hurdles that await incoming CFOs in their first 90 days, drawing from the insights of seasoned experts in the field. From navigating team dynamics to grappling with cultural influences on financial operations, these insights offer invaluable guidance for those preparing to take on this crucial leadership position.
- Team Behavior Impacts Financial Health
- Cultural Aspects Shape Financial Operations
- Unexpected Focus on System Maintenance
- Transform Complex Data for Production Decisions
Team Behavior Impacts Financial Health
One unexpected challenge I faced in my first ninety days as CFO was realizing how much of our financial health depended on team behavior, not just systems. Many small operational decisions were made quickly without proper expense tracking, which made forecasting more difficult than expected.
To solve this, I created a transparent reporting structure where department leads could see how their spending directly affected margins. Once everyone understood how their choices impacted the company's financial performance, accountability improved naturally.
For new CFOs, my advice is to focus on education and communication as much as data. Financial clarity is not about control; it is about creating shared understanding. When your team sees finance as a collective responsibility, accuracy and performance follow.
Cultural Aspects Shape Financial Operations
The first unexpected challenge I encountered during my first 90 days as CFO required me to understand the cultural aspects which shape financial operations. Statistics revealed particular patterns, yet human beings reacted differently to the idea of transformation. The team members currently on the team viewed process updates as unhelpful changes that create more problems than solutions.
I started by listening first before taking action through small group discussions to obtain feedback before introducing new controls or reporting systems. This not only surfaced valuable insights but also reduced resistance.
New CFOs should understand that financial transformation primarily depends on psychological factors, which amount to 80%, while mathematical aspects make up 20%. Your changes will gain support from others when you first hear out their concerns, even though your approach has not yet shown success through data.
Unexpected Focus on System Maintenance
The first 90 days of my CFO role brought a major surprise when I discovered I would have minimal time for strategic planning. The first few weeks of my work focused on system maintenance and financial record updates instead of my expected responsibilities for forecasting and growth planning.
I applied a "triage" approach to manage this situation by starting with critical risks before creating a 30-60-90-day framework to reduce them.
For new CFOs, I'd say: expect the unexpected. You enter with major goals in mind, yet stabilization needs to occur before innovation can begin. Start by addressing the existing problems because you need to control the ship before you can navigate it effectively.
Transform Complex Data for Production Decisions
As a part-time CFO to manufacturers, I find that new CFOs tend to be naive about how challenging it is to transform complex financial data into decision-usable information for the production shop floor. CFOs at successful manufacturers understand that not only do executives require financial statements based on operational metrics -- such as equipment ROI and production costs -- but traditional accounting obscured the here-and-now of company performance. CFOs who don't marry financial and operational intelligence have a hard time advancing their strategies.
Forward-looking manufacturing CFOs establish integrated reporting that ties financial impacts back to operational KPIs, like capacity usage and production effectiveness. They also build credibility by illustrating the connection between financial analysis and day-to-day operating decisions, and how incremental changes can positively affect profit. CFOs who are part of operations and finance always outperform, because they go from being historians to active participants in the game.
New manufacturing CFOs must know product creation and tracking, form close ties with operations, and establish financial reporting structures that are in line with the language of production. By being operationally literate, manufacturing CFOs win competitive advantages from these trusted relationships based on data and grow in a sustainable way.
