🔪 Gutting the finance team

I learned pretty early on in my CFO career that cleaning up the shitshow is hard … but keeping it in order is jut as hard.

I’ve seen DSO fall off a cliff in a quarter on willpower alone, then jump straight back up the moment attention moved on. One hero was holding it together personally, and eventually that someone gets distracted, promoted (or tired). 

What survives you is whatever runs unsupervised. At Lift Solutions, their cash now lands in a $2.9m-$3.5m band every week, minus the volatility, because nobody has to make time for or remember to do it. 

In 30 minutes, you can find out whether your AR is a system… or a person. 

In one finance team I inherited, I had a divisional Controller who was a real problem.

Let’s call him Dave (because his name was actually Dave).

Dave knew his own job inside out. His numbers were reliable. There was just one problem: Dave was a disruptive pain in the ass. He bellyached that the business was doomed and that anyone in their right mind should flee.

Sigh… exactly the kind of energy you want spreading through a finance team you are trying to rebuild.

Inside my first two weeks, I was ready to fire Dave out of a cannon directly into the sun. The problem was, I couldn’t afford to.

He was one of the only people in the function I could actually trust to produce a reliable set of numbers.

So, reluctantly, I held off. Yes, I saved Dave.

I got to know him better over the next six months. And I started to realize that the problem wasn’t quite what I had first assumed.

There was plenty of arrogance, and a fair bit of complacency. Let’s just say Dave was utterly untroubled by the quicksand of self-reflection and humility.

But underneath that, he was very smart, understood the business extremely well, and wasn’t fundamentally a negative person. He was comfortably overqualified and sleepwalking through his job. 

So I took a gamble.

Dave understood the business, knew the numbers, and I felt he had the raw ingredients to become a strong FP&A operator. So, I moved him into a senior FP&A role, despite him having no FP&A experience.

There was some logic to it. My FP&A team was good at analysis, but not particularly good at connecting that analysis back into the financial cycle. It needed a sprinkle of Controller-type thinking.

But most importantly, Dave was now miles outside his comfort zone. And, being a cocky little so-and-so, I had a feeling he would be desperate to prove he could do it.

It worked. He brought the missing robustness to FP&A.

But the real kicker is that he completely re-engaged. And, because he was vocal and well respected across the business, he went from being chief skeptic of my new broom to one of its biggest cheerleaders.

Meanwhile, I backfilled his Controller role with someone much better suited for what that job now needed.

I should add that I have also tried similar redeployments with weapons-grade doofuses who absolutely did not deserve the second chance.

But that’s a less interesting story.

In week one, we kicked off by making sure that if you were “gifted” a shitshow finance function, it didn’t happen by accident, and you knew what you were getting yourself into.

In week two, we focused on how to get to the bottom of it as quickly as possible once you were in the seat.

Last week, we dealt with the awkward reality that you can’t simply press pause while you clean things up. The clock keeps moving, the business still needs support, and you have to keep the wheels turning with a minimally viable finance function while the repair work continues.

If you’ve been reading this series carefully, you will have noticed a few things about the operating model you’ve adopted in the role so far:

I call this point The Swamp.

Your legs are heavy from the journey so far. You’re too far in to see where you started. You can finally see the other side, but it still looks a long fucking way away.

In most major cleanup jobs I’ve been around, this point tends to land somewhere between six and eighteen months into the role, depending on how deep the original mess was.

Earlier in this series, I referred to the Happy-Sad/Dumb-Smart Matrix:

The Swamp sits firmly somewhere between boxes two and three.

The blissful ignorance of that glorious new CFO throne you proudly adorned on day one feels like a lifetime ago. Instead, you are blessed with the searing clarity of knowing exactly how much there is still to do, and how few people you currently trust to do it.

And this is where I see plenty of CFOs veer off course:

You got this far through yourself and a few trusted people. But you will not get out of the Swamp the same way… escaping the Swamp is a full-team sport.

Which means, clichéd as it sounds, this is the moment to get serious about supercharging the team. Sure, process and systems matter too. But both become wildly easier with the right people around you.

So let’s talk about that.

But of all the people you need to think about, there is one person who matters more than anyone else…

Yep, that person is you.

You are about to start asking people a very important question: “Are you ready to come and fix this thing with me?”

“With me” is doing a tremendous amount of heavy lifting in that sentence.

Whether it’s talented people already inside the business, the small group of trusted people you brought in to help, or new candidates you are trying to attract, their belief in you matters.

Your vision. Your energy. Your commitment to the cause. And your commitment to them. Those are the things that will help you attract the talent you need to get out of the Swamp.

And you can fake those things for a while… but you cannot fake them forever.

And frankly, you owe it to anyone you ask that question of to be damn sure you aren’t faking it. If you are asking them to commit to the journey, you need to be there to honor your commitment to them.

Until now, you probably still had an escape clause.

If you had left after six months saying, “This was worse than I thought, I got the diligence wrong, and I’ve learned from it,” people would have understood. You’d have had a story to tell a recruiter.

So, yes you took the role, but you signed a prenup, a sort of get out of jail free card.

By the time you reach the Swamp, that prenup starts to lose its validity. 

You now know a lot more. If you did your diligence properly as we talked about in week 1, much of what you have discovered should be disturbing detail rather than a fundamentally different scale of problem.

You probably also have a decent idea of how long the next stage will take.

So … this is a good moment to consciously recommit.

Not necessarily to the end state… that distant holy grail of a shiny, automated finance function. But to the next stage: building the team, processes, and eventually the systems bedrock that can get you there.

It is surprisingly easy to sleepwalk through this decision.

About twelve months into my hardest turnaround role, I was offered another CFO job. Similar compensation. And it would have been a much easier life. I hadn’t been looking, but I’d been cherry picked by their board and a headhunter came at me pretty hard.

It turned out to be a powerful exercise because it forced me to decide how committed I was to the thing I was doing.

Until that point, it had been the toughest year of my life. And somewhere in the back of my mind, I was still carrying the prenup of “not my mess” if I ever needed it. Like an emergency ripcord.

But, by coincidence, this offer came just as that excuse was starting to expire… I was getting too far in.

The offer forced me to choose. Cash in the prenup and take the more straightforward job or tear it up and stick it out.

I did the latter.

I think it was the right decision. Mrs. Secret CFO wasn’t so sure at the time (understatement, lol).

I asked her again as I write this, years later, whether she still feels the same with hindsight. She now concedes it was probably the right call. (That’s as good as I’ll get, folks.)

What I do know for sure is that recommitting accelerated everything that came next in the role. And, importantly, my commitment was first and foremost to the team I was building as much as the business itself.

So, you’ve done the best you can with the people you inherited. You’ve found the bottom of the function, completed the discovery work, and somehow kept the wheels on while all of that was going on.

You’ve also, at least in your own head, recommitted to the job.

Now comes the next stage: building the army that will turn a shitshow finance function into something more sustainable. This is the moment to tackle the wider team.

The simplest way I know to do that is to map people on Skill and Will.

Depending on the size of your team, you might do that for everyone. In a bigger function, you might start with your direct reports and one or two levels below.

But first, let’s define the terms.

Skill: Does this person have the capability, judgment and experience to perform the role to the standard the situation requires?

That includes:

Will: Does this person genuinely want to do the job, in this environment, in the way the team now needs it done?

That includes things like:

In short, Skill is whether they can. Will is whether they will.

And you know your boy loves a 2x2 grid.

You might have seen this framework before … and the classic Skill vs Will analysis will tell you something like this:

And broadly, I agree.

But that analysis assumes you have an abundance of talent, candidates, time and resources to fix the team.

Which, if that were true, probably wouldn’t make this much of a shitshow. So this thinking ignores one other important dimension: Hill.

Where Skill and Will describe the person, Hill describes the job you are asking that person to do.

Hill: What exactly are we asking this person to deliver, and how much room, support, and protection do they have while doing it?

That includes:

Here’s the lesson: Skill and Will are not absolute, they have to be taken in the context of the Hill. (This is the lesson of Dave from the opening story.)

So, how do you handle those in each box Skill vs Will quadrant when also accounting for ‘Hill’?

It sounds almost trite: fix the people and the rest starts to come together.

And, of course, there is more to it than that. But if you can replace a chunk of your weakest people with genuine Stars, while developing your Question Marks into solid performers, the leverage on capacity, capability, and culture is enormous.

Once you are through that initial hands-gripping-the-joystick phase we talked about in weeks one to three, this changes everything.

The challenge is that there will still be a lot of moves to make. It’s hard to know where to start, so sequencing becomes critical. You need to move fast enough to build momentum, without destroying the progress you have already made.

Exactly how you do that will depend on the situation, but I use a few principles:

Get this right and, as confidence and trust build, you can steadily release some of the control-freak centralization and top-down Pareto-type approach we talked about last week.

Think of it as releasing trust and responsibility in increasing concentric circles.

For example. In forecasting, each budget cycle can place a little more reliance on bottom-up input and introduce more granular drivers, while ensuring they reconcile back to the high-level economics you understand.

Business partnering support can gradually extend beyond the C-suite, as you start trusting the wider finance team to share context, exercise judgment, and give consistent advice deeper into the org.

Likewise, the centralized governance around reporting and core processes can begin to loosen as local teams prove they can keep things clean without somebody from Group Finance breathing down their neck.

I’m not saying flick a switch to decentralize decision rights... that’s more of an operating model question to be designed specifically to your business. But you can give autonomy back in layers, as the team earns it.

And as you give the rope back at the right pace, you’ll slowly start to feel like you’re getting your life back, without fearing that everything will fall apart the minute your back is turned.

And with that, we come to the end of this series on what to do if you inherit a shitshow finance function.

We’ve gone from deciding whether you even want to inherit one, through finding the bottom, keeping the wheels on during repair, and finally rebuilding a team capable of taking you off of a war footing.

As I said at the outset, this doesn’t get you all the way to finance utopia.

But it gets you to a stable platform you can actually build from. One from which you might be ready to push harder into systems, automation, and a more technology-led finance function.

People → Process → Systems … in that order. Always.

If you want to go deeper on those later stage next stage, I wrote about it in a series on Finance Transformation here.

Next week, we start a brand-new series: The CFO Operating System.

I am beside myself with excitement about this one.

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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.