🃏 Cashing out: The career risk of stepping back as CFO

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Lots of fun stuff on tap today... here’s what’s up:

Now, let’s get into it.

Tired CFO from It’s a Secret…

After a long corporate career and few startup CFO roles, I’ve started to question whether this role is really for me. And I’ve started to answer: this is really a role where you need to be like an accordion, ready to zoom in and out any moment. But more importantly, you need to be a great manager of relationships, power dynamics, and people. 

Would it be so bad to go back to a '9-5' analyst/manager role after this? Would you hire someone like that?

Tired CFO,

All the things you described are why I love the job 🙂.

But I understand it is not for everyone. And you have obviously given it a proper go, so you know what the role really is.

The answer to your question is yes, of course. Hiring someone like you into an analyst, manager, or senior manager role could be a no-brainer.

The thing I would want to test is whether you know how not to be in charge.

I would want the benefit of your experience, judgment, humility, and perspective. I would want you driving things from within the team. I would want you making everyone around you better.

But I would also need to know you are genuinely ready to be a cog in the machine, rather than the person who owns the machine.

I would also want some reassurance that it works for you financially (lifestyle inflation is real), and that you can handle the ego hit of the lower status, lower salary, and lower level of control. Anyone who pretends otherwise is lying, probably into the mirror…

But with those questions answered, yes, absolutely. Plenty of CFOs would be delighted to hire someone with your experience.

The thing for you to think about is that while this is not a completely one-way door, it will probably be seen by some as semi-retirement. That may be unfair. But it is how the market will read it.

So if you decide in two or three years that your mojo is back and you want another CFO seat, it is not impossible. But it will take some explaining. Boards will want to know you are still ambitious, still committed to the journey, and not going to change your mind again 12 months later.

So my advice is simple. Do it if it is what you really want. But make sure you are honest about what you are really optimizing for.

If this is a finance career choice, then stepping back into an analyst, manager, or senior manager role can make perfect sense.

But if this is really a lifestyle choice, ask the harder question: is finance still the thing you want to do at all?

Because if what you want is more calm, more craft, more life, and less corporate knife-fighting, there may be other answers. Run a golf club. Teach guitar. Buy a small boring business. Do something with numbers where nobody asks you to join a steering committee called Project Phoenix.

That is not me being flippant. It is just worth separating “I don’t want to be CFO anymore” from “I still want to work in finance, just with less blood pressure.” Those are different decisions.

Good luck. I hope you find something that works for you.

TLDR: Yes, of course you can step back. Make sure you are running towards something you want, not just away from something you don’t.

StuCFO from Yorkshire, UK

I am the FD of a small UK business. I am one of four equal shareholders which includes the MD.

My personality is naturally more structured (no surprises there) and the MD’s personality is more flexible/dynamic (I’d describe it as unfocused) in that he has a strong bias towards R&D and innovation.

For growth, my bias is to try and influence him to focus on a narrow set of larger projects but his argument is that the R&D process requires a large amount of “seeds” to be planted at the same time.

For the past two years, his approach has not yielded commercial success, but there is evidence of some technical progress on each project and a building sales pipeline.

There is also an age gap; I am in my mid-30s and he is early 50s, so I often feel like I should defer to his greater experience. I can’t deny that you don’t know what you don’t know, and that big wins can come from unexpected places.

Any tips on how I should approach this?

StuCFO, to me this sounds like a healthy dynamic.

Staring out into the white space of the market and figuring out what to build now that your business might still be able to sell in five years is important work. Annoying, messy, uncertain, often expensive work. But important, and our CFO brains aren’t well trained for it.

And your MD is right about one thing: R&D is absolutely about planting seeds. It is actually a pretty good analogy.

Some will grow, most will not. The trick is not pretending you can know which seed is the winner on day one. It’s spotting which ones are starting to grow, then giving them all the water and light they need.

Another way to think about it is poker. CFOs tend to think like chess. In chess, there is no information asymmetry. Everything that can be known is known. You can see every piece on the board. From there, it is skill.

Poker is different. Poker is about placing bets under uncertainty. Keeping those bets small enough to stay in the game, then ramping up when the odds move in your favor.

R&D is much more like poker than chess.

So, I would not try to force your MD into one big deterministic project plan. That probably misses the nature of the work. But equally, “planting seeds” cannot become a nice-sounding excuse for spraying money around and calling every green shoot strategic.

The key is to agree on the size of the R&D pot, the rules of the game, and what progress looks like.

You might place 20 R&D bets and expect one or two to return the whole pot. That can be perfectly rational. But if that is the model, you need a process that matches it.

Good R&D needs stage gates. Not to kill creativity. To protect capital.

A simple version might look like this:

That gives your MD room to explore, without giving every idea a blank check and a commemorative hoodie.

Micromanaging each investment will not work. You do not dig up a seed after a week to see if it has grown.

But you also do not keep watering an empty patch of dirt forever because someone once saw a leaf.

I would approach your MD with respect for the uncertainty, not frustration with it. But I would also push for a proper R&D portfolio process: fixed pot, clear gates, explicit kill criteria, and a regular review of where capital should move next.

I wrote more about this here if it’s helpful.

TLDR: Treat R&D like poker, not chess. Small bets, clear gates, double down only when the odds improve.

Backtobasics from New York, US

We currently maintain a single company-wide model that serves strategic planning, investor forecasting, monthly forecasting, headcount planning, revenue planning, and actual reporting. Over time it has become increasingly complex to maintain because finance is responsible not only for consolidating assumptions but often gathering and updating them across functions.

I'm trying to think through the operating model for planning and forecasting at scale.

How do you determine:

Have you seen effective ways to push ownership of inputs (headcount, sales forecasts, operational metrics, etc.) back to business leaders while still maintaining a single source of truth?

Thanks for the question, BacktoBasics.

I actually think best practice on this is pretty straightforward.

You should break your financial planning process into three parts: inputs, modeling, and outputs. A bit like any simple system. How that gets applied depends on scale, but I’m going to assume we are talking about a reasonably large business with multiple layers of complexity and management.

Let’s start with inputs.

You should be able to take every meaningful planning assumption and put two names against it: a business owner and a finance partner. The business owner is the person responsible for delivering it. The one who will live with it as a performance objective over the next 12 months. The finance partner is the person who pressure-tests it, challenges it, provides context, and makes sure it connects properly into the wider plan. But the assumption is owned by the business.

For example, the VP of Enterprise Sales might own the enterprise sales target. The CRO owns the total sales target. The CEO owns the overall plan. Each should be man-marked by someone in finance. For the full picture, that is you as CFO. For specific assumptions, it might be the FP&A lead, a business partner, or an analyst.

But the principle is the same: every important assumption, at every important aggregation level, should have a named business owner and a named finance partner.

In a large business, budgeting is always a process of creating tension between top-down ambition and bottom-up reality. You need pressure coming through the business line, via the CEO, CRO, COO, or functional leaders. And you need pressure coming through finance, via the CFO, FP&A, and business partners. 

If everything sits with finance, the business can behave like planning is something being done to them. FP&A is there to drive behavior, so a weaker quality forecast the business understands and engages with will beat a better quality forecast no-one understands every time.

Next, the model.

The model and the process are owned by finance alone. Finance owns the plumbing for financial planning. If the model is wrong, that is on finance. If the process fails, that is on finance. If the outputs do not reconcile, that is on finance. If the whole thing becomes a monster spreadsheet that only one sleep-deprived FP&A analyst can operate, that is also on finance.

But owning the model does not mean owning every assumption.

And this is where your “single company-wide model” issue comes in. A single source of truth does not mean one giant model trying to do everything. In fact, at scale, it usually should not.

A model has become too complex when it is trying to be the strategic plan, investor case, monthly forecast, headcount tracker, revenue model, actuals bridge, board pack engine, and operational data capture tool all at once.

I would split the operating models from the financial consolidation layer. Sales can have a revenue planning model. People can have a headcount model. Operations can have their own driver model. But they must feed into one controlled finance-owned consolidation model, with clear mapping, definitions, timing, and ownership.

Finally, outputs.

Outputs need to be owned collectively by as many people as possible. At the very least, the CEO, the exec team, and the finance leadership team need to own the final plan. I call this the wedding vows moment, where everyone agrees to marry the outputs of the model and commit to delivery. I wrote about this before here.

TLDR: Business leaders own the assumptions. Finance owns the model, process, challenge, and consolidation. The executive team owns the output.

A few of the biggest stories that every CFO is paying close attention to. This is the section you might not want to see your name in.

Finance hiring is actually up

38% of leaders are hiring, comp's rising, only 4% are cutting headcount… But 61% still can't find good controllers or FP&A. The AI-job apocalypse is looking a bit oversold so far.

Zuck starts an AI price war

Meta's new coding model, Muse Spark 1.1, comes with pricing Zuckerberg calls "very aggressive." It remains to be seen how much that will spur other models to drop their pricing.

Ellison bets $81bn the sequel beats the original

Paramount's Warner deal: no asset sales, no cuts, 30 movies a year, all on serious leverage. Bold plan. Bring popcorn (salted, ideally).

ICYMI, here are some of my favorite finance/business social media posts from this week.

Let me know what you thought of today’s Mailbag. Just hit reply… I read every message.

Last weekend’s Playbook came in hot with part II of our series: Building FP&A. This one answers the question: What does better look like?

Last week’s Boardroom Brief explored ways that CFOs can combat, and recover from, burnout.

Disclaimer: I am not your accountant, tax advisor, lawyer, CFO, director, or friend. Well, maybe I’m your friend, but I am not any of those other things. Everything I publish represents my opinions only, not advice. Running the finances for a company is serious business, and you should take the proper advice you need