A Mentor’s Advice for CFOs: How to Help Clients Navigate Their Way to Success

By Jonathan Wolter

In my 45+ year career, I have been fortunate to be CFO at a number of technology and life science companies ranging in size from early stage to those with mature operations, private and public, including SmartRent, PARC, Vera Therapeutics, Amyris, Soleno Therapeutics, and Kyverna Therapeutics, among others. Over the course of my tenure at these companies, I have helped plan and execute IPOs, integrate acquisitions, close financing transactions, and resolve complex accounting and reporting issues. My experience in resolving both operational and financial issues has provided me a nuanced perspective about the importance of both style and substance when it comes to being a successful leader.

The successful CFO plays a critical role as an objective voice and an impartial and trusted player/arbiter; consequently, focusing on the manner by which problems and conflicts are addressed to build consensus and resolution couldn’t be more important. Over the course of time, I have seen that a leader’s mindset and approach matter just as much as having a strong, impressive pedigree. Especially for a CFO, it is not sufficient to solely be technically skilled; you must also be welcomed-in, accepted as part of the organization’s strategic brain trust, and strive to remain highly valued by the organization’s stakeholders (CEO, board, and employees). How you operate within the broader team context becomes as essential as the path or solution that you are recommending as the CFO.

I offer the following five pieces of advice for CFOs seeking to position their clients for success and be successful leaders themselves:

1. Have the confidence to remain receptive to new information.
2. Manage conflict while preserving your objectivity and independence with an open mind.
3. Be politically astute but not politically involved.
4. Think inductively, not deductively, when solving problems.
5. Focus on building trust as much as on producing results.

Have the Confidence to Remain Receptive to New Information

When beginning a new assignment, many experienced executives are faced with a déjà vu moment in which they instantly recognize a problem needing a solution, seemingly similar to situations they have seen earlier in their careers. Indeed, the benefit of experience enables us to quickly assess patterns and likely causes of an observed problem and behavior. Of course, the common response to “rinse and repeat” the strategy that worked the last time; but this, in fact, might be a fallacy. If you look carefully, most current situations are not exactly the same as conditions in the past. The successful CFO will have the confidence to “frame” the problem, yet remain open to discover new information that might change their initially anticipated resolution. The objective CFO will not lock in solely upon an initial assessment but will remain receptive to new information and to continually consider different perspectives. The objective CFO will not leap to assumptions without evidence, a logic trail, and adequately supportive data.

Manage Conflict While Preserving Your Objectivity and Independence

All CFOs have at some point in time been faced with a CEO, board member, or fellow executive who was adamant about something, but who was also not successfully delivering their message in a convincing manner. As the CFO, you must be able to walk a fine line here, remaining impartial, but also educating your audience (the CEO, board member, or fellow executive), then influencing and persuading them to adopt a new perspective, but without directly confronting, contradicting, or appearing to threaten them. This is where style matters and the resolution requires thoughtful handling. You can acknowledge their perspective without ultimately embracing it. You must leverage the facts without being confrontational and empathetic in your approach. This is the way to ensure that your relationship remains strong, and you remain valued for your independent and objective point of view.

One illustrative war story: I was asked to join a company as CFO about 6 months after my initial engagement as a consultant. One of my C-suite colleagues (we’ll call him Bob in this example) was a very smart, command-and-control ex-military guy for whom I personally held great esteem. One day in a management team meeting, Bob got very heated making his point and passionately expressed a statement that was confusing and didn’t really support the position he was taking. Consequently, he did not successfully get traction with his audience and I knew I had my work cut out for me if I wanted to help him make his point.

Here’s how the conversation went after the executive team meeting.

Jonathan: “You know Bob, I just want to make sure I heard you correctly in today’s meeting, because what I believe I heard you say is this…, and I think that’s what others heard also.

Bob: “Hold on Jonathan – you’re dead wrong! I never said anything like that!”

Jonathan: Bob, I’m not saying that’s what you intended to say, or believe, but that’s what I heard, and I think others heard it that way also.

Bob: “Oh… well, it was fairly clear to me… and I don’t see how my message could be confused.”

Jonathan: Well, Bob, respectfully, perhaps your passion abbreviated the complexity of your message. Your perspective on this issue is valid, and I suggest that you can be successful and convincing if you re-address it with the team.

Bob: “Interesting. OK, let me think about it.”

The takeaway here is that if you, as CFO, pay attention to the manner in which you handle conflict, you can successfully resolve disagreements without jeopardizing your reputation and effectiveness as an objective voice within the C-suite. On the other hand, if you are confrontational and accusatory and use facts as cudgels, your cross-company relationships will suffer and so will your effectiveness as a CFO. You may not be welcomed into, and could, in fact, be shut out of, the exact discussions in which you need to participate.

Be Politically Astute but not Politically Involved

A third piece of advice for CFOs – stay out of politics, particularly internal, organizational politics. While it is very important to be fully aware of the political agendas at play in an organization, a CFO will be critically compromised if he or she takes sides and loses objectivity by aligning with a faction. Once a CFO has lost the trust of stakeholders, it is virtually impossible to regain. Often, this is the precursor to welcoming your successor.

CFOs can sometimes get into very difficult situations and will most often lose the trust of colleagues when they are perceived as taking sides or acting as a political operative, regardless of whether the conflict is between C-suite members or with subordinates or teams within the organization.

The CFO certainly carries great influence in the allocation of resources within the organization. She or he should strive for the following reputation and legacy with members of their organization:

• Employees should always have access to the CFO.
• They are always able to make their case and receive a fair, impartial audience from the CFO.
• They may not always receive the answer they want, but when the CFO explains the basis of his/her decision they are treated fairly.
• They never see the CFO treat others with perceived favoritism.

Think Inductively (not Deductively) When Solving Problems 

In my experience, inductive reasoning can be more helpful, while deductive thinking can sometimes cause errors of judgement when it comes to solving problems as a CFO. Why is this? Well, inductive reasoning asks leaders to observe and fully understand the underpinnings of a problem so that the question becomes “Is there a pattern here? Can this solution be applied to other situations similar to this one or to a broader range of behaviors?” By contrast, deductive reasoning assumes that what works for the average situation probably works for the individual case. Inductive reasoning is therefore a more bottoms-up approach, while deductive reasoning is more top-down. Inductive reasoning takes you from the specific to the general, while deductive reasoning leads one from general premises to specific conclusions.

Focus as Much on Building Trusted Relationships as much as on Producing Results

This final point is probably my most valuable tip based on what I have seen work across the course of my career as a CFO. Too many executives get so caught up in producing results that they forget about paying attention to the more qualitative success factors, including the success that comes from developing strategic relationships. Like all C-suite players, CFOs must remember that when the chips are down, it is the strength of your relationships that matter most. This is where your allies rally round you, your mentors support you, and your team produces for you. Because CFOs can sometimes be viewed as the “police,” “bad cop,” or “hatchet man” among other less magnanimous terms, building and nurturing strategic relationships within and outside the C-suite and with board members and committee chairs is especially critical. All successful CFOs know this implicitly. But this takes time and effort. Pushing this off your “to-do” list is a huge mistake, and you will probably live to regret it.

The CFOs at FLG Partners are respected mentors for our client teams. If you have need of some executive coaching and mentoring at your company, let us know. We’re happy to help.