As an interim CFO, I have often faced challenging client situations, among them inheriting a finance team “in crisis.” Sometimes these underperforming team “ecosystems” are the result of:

  • Teams managed by less-than-ideal functional area leaders from prior poor hiring decisions
  • Teams were not provided the overall vision for the company/department, were assigned a narrow scope, and/or were given limited exposure to business peer relationships
  • Teams where it has not been ok to speak up and/or training was less than ideal
  • Teams that have been overstretched and overworked due to leadership changes/restructuring, layoffs, or M&A situations

Two recent client stories say it all:

Company A

This high growth company initially faced strong customer demand; however, this was followed by rapid decreases as the marketplace and economy changed in the post-pandemic period. When I arrived at the company, the finance team was in shambles. They had taken on additional responsibilities from team members who had been let go, had been managed by a functional head with poor leadership skills (who had since left), and subsequently by another functional head and other team members who were essentially already out the door when I joined as Interim CFO. Bottom line: the necessary team foundational structure had not been built or maintained.

Company B

Another company where I joined as Interim CFO had previously hired a CFO who did not culturally work out. The prior CFO had hired a new team but some of the key functional heads were not good hires. Despite this, they were retained and as a result, the entire team was now suffering from low morale. 

Many leaders, both in and outside of finance, will be nodding their heads at these stories. Particularly over recent years, corporate teams have seen it all and this has put incredible strains on all of them. Unfortunately, when a team is in crisis little progress can be made on strategic fronts as the organization’s foundation is fundamentally cracked. And if team members are left to operate within these flawed environments with suboptimal working conditions, how can they hope to fulfill their missions on the finance team? Normally, the finance team serves as the eyes and ears for the CFO, tracking issues and solutions across the company with their counterparts in other departments. This is a critically important role which every experienced CFO relies on and depends on to do their job as the trusted partner for the CEO. But when the finance team is in disarray, this critical function becomes disabled.

Solutions for Underperforming Teams: Leadership in Action and Practice

I have learned over the years that turning around these types of situations is hard – but it is possible. The key is using relationships, approaches, training, and tools to allow attitudes and motivations to change. Interestingly, in the in the 2023 McKinsey Global Survey of CFOs, the authors noted “CFOs who say their finance function has succeeded at strengthening their organizations’ resilience in the past year are 6.5 times more likely than other CFOs to say they spent most of their time on talent management.” I support this attention to team management. It pays off, every time.

Here are my top 5 recommendations for rebuilding an underperforming team back into a fighting force for positive performance, change, and progress.

#1: Lead by building individual relationships from the ground up.

The first key to turning around a dysfunctional or low morale team is to have one-on-ones with your leadership peers and with every member of the finance team. Get to know all of them as individuals as well as understand their roles, needs, and desires within the business and finance team. Listen to their concerns, needs, interests, and passions. Make sure they understand that you believe that you are in partnership together and will provide them with a “safety zone” where honesty and transparency is valued and respected. Then institutionalize these one-on-ones on a regular cadence. They will look forward to these get-togethers as much as you do if you’ve done your job well as a leader.

#2: Walk around and encourage everyone to lead by walking around.

In Japan, they call this “walking the Gemba” (meaning where the work is done). As a leader and as a team member, you need to understand what is happening in the business, but more importantly why it is happening. You can’t know this until you and your team spend your time IN the business, asking questions and listening to those closest to the situation at hand. Translate this understanding into actions required by evaluating what is wanted and needed. Determine “who, what, how many, by when,” whether you are talking about marketing, sales, production, customer delivery, customer satisfaction, etc. Just make sure your team doesn’t spend all their time just gathering data – they also need to analyze the data, prioritize necessary actions, and put key actions in place.

#3: Practice “service leadership.”

You are as much in service to your peers and finance team as you are to the CEO and company overall. Provide your insights and support as you tap into your peers’ and finance team members’ cross-functional relationships and knowledge across the business, encouraging them to leverage this in your and their work. What business issues have they uncovered? Why are these problems occurring? What solutions make the most sense and why? Make sure you as the CFO always encourage asking for feedback about potential actions which will lead to improvement. “What do YOU think we should do?” “Anything you would change?” “What are the appropriate priorities, and why?” Give your peers and finance team members the cover to surface their ideas freely, with data in hand, and then let them play out their strategies for success. Offer your support, resources, and encouragement. I call this “service leadership.”

#4: Provide your team with the right level and appropriate tools for success.

I use a repeating “Check-Adjust-Plan-Do” cycle for continuous process improvement. And I have found it a practical and useful framework for problem solving and decision making. It is also critical to create a well-defined planning process at the company. This planning process should define key deliverables, establish clear timeframes and deadlines, and support this with an action item calendar which can be used across the company. This works for short term budgeting and cash flow management to long-range capital planning.

Consistently train and develop your team. Follow the learn, teach, and implement model. All team members want to grow, develop, and contribute. Ask them what they need and want, areas they would like to grow in, and be there for them as a coach. Whether you are justifying capital expenditures, reforecasting using a new business model scenario, budgeting next year’s operating expenses, or delivering a “go/no-go” decision making analysis, your team needs to be armed with state-of-the art technology and tools. Ideally, they should lead the process of refining these tools, models, reporting mechanisms, and integrated business processes.

#5: Always celebrate wins and view mistakes as “falling” – not “failing.” 

My last recommendation is all about your reactions when things go right – and when they are less than ideal. A great leader always takes the time to celebrate their team’s wins with their teams. But inevitably, your team members (and you) will make a mistake. This can be disappointing, humiliating, and demoralizing to a team member – especially in finance – but only if you react the wrong way. We all learn from our mistakes. And it is not failing when you learn from those mistakes. As a leader you must always show your team that mistakes often lead to “lessons learned” and 99% of the time they are not fatal. You should always look at them as “falling” (you get up, learn and move on to the next experiment) versus a “fail.” Similarly, always look for opportunities to show how much you value and respect their contributions to your team and to the company. They will remember these moments, and this will keep their morale up even when the going gets tough. You can even create a monthly or quarterly or annual award to seal the deal.

FLG Partners never shies away from tough client situations. In fact, we are known for tackling thorny issues, from financings to IPOs, M&A to restructurings. If you have a finance team experiencing tough times, that’s right in our sweet spot. Get in touch.

Cal Hoagland

Cal Hoagland has over 35 years of CFO and senior financial executive experience in late-stage private and public companies from multinational enterprise companies to high-growth start-ups. Cal’s expertise includes leading strategic planning and execution, including preparing private companies to become public and successfully implementing and executing SaaS. He has executed…Read More