📬 Healthy Tension: Handling CEO red flags

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We’ve got some great topics today. Here’s what’s on tap:

Now, let’s get into it.

Fresh CFO from Down Under, Australia asked:

Hey Secret CFO — I’m in my first CFO role at a <$50M company. An upcoming restructure means I’ll have HR and Data under me (first time leading non-finance teams). I keep wondering if pursuing an MBA would genuinely give me the broader business toolkit, or if the smarter investment is future-focused stuff like AI automation literacy and leadership coaching. Is an MBA actually beneficial to me, or just a box-tick on the CV?

The MBA will give you some nice breadth, but it’s also a massive time sink. Even an Exec MBA means hundreds of hours a year over a couple of years.

My guess? You’d get a better return from focusing on nailing this role. You’ll learn faster, more deeply, and in context. In terms of the new functions you’ve inherited, you can probably get 80% of the MBA’s benefit by reading five good books on HR, leadership, and data strategy - and applying them in real time.

The key thing now is to make sure you’ve got proper functional capability underneath you. You don’t want the blind leading the blind. But you can get away with the blind leading the bespectacled…

I’ve led procurement teams managing $2B of spend, IT teams of 100+, legal and transformation specialists - all while being wildly underqualified. The trick is to build strong experts beneath you, give them air cover, and learn fast enough to ask good questions.

What those functions usually need most isn’t a technical boss, it’s an executive who helps them connect with the board and the wider business. That’s where your CFO toolkit is gold.

The main traps I’ve seen finance leaders fall into when leading non-finance teams:

The right balance is to lean in with curiosity. Ask naïve questions. Take a genuine interest. You’ll learn fast, build trust, and often discover that the real problems are operational or cultural, not technical. And those can be solved with common sense once you’ve surfaced them.

TLDR: Skip the MBA for now. You haven’t got the time. Back yourself, dive in, ask great questions, and build the right team underneath you. That’s the real general management apprenticeship.

And as you are writing in from down under, it reminds me of my favorite episode of The Simpsons:

Chris P from the UK asked:

How do you conduct crisp and meaningful monthly performance meetings with the sales team in a business with low frequency/high dollar contracting? By nature of what we do, some months/quarters will be low sales, other months/quarters will be high sales, and sales success is measured over a longer time frame than monthly. Our monthly performance meetings can often be meaningless acknowledgments of results, but I’d like us to have more meaningful conversations about our performance and, importantly, what actions and shifts we need to make.

Thanks, Chris P. Great question.

The longer the sales cycle, the more the accounting is disconnected from the activity that actually drives the result. That’s the core problem: the P&L lags behind the work. If you rely too much on reported sales, your monthly meetings will always feel like a random walk through timing noise.

So yes, review the outputs (the financials), but only to confirm that they make sense in the context of what you already know. They should be confirmatory, not diagnostic.

For performance management, you need to move upstream. Focus your review on controllables: the inputs and activities that create future revenue.

In a long-cycle business, every sale passes through a sequence of stages. Map that funnel. Then build your meeting agenda around movement through those gates:

That’s the heartbeat of the meeting. The question you’re answering each month is: What activity today determines the P&L six months from now?

And - this is important - tie the sales KPIs back to financial outcomes. For example, does a 10% drop in proposal-to-close rate show up as a 5% revenue gap two quarters later? Once you have that link, you’ll find the sales team takes those “boring” process metrics far more seriously.

TLDR: The longer the sales cycle, the less useful the current P&L is as a performance tool. Anchor your meetings around upstream activity metrics that predict future revenue. Use the financials to validate, not to manage.

B-Dog from the USA asked:

How have you handled working with CEOs with large egos focused on empire building with little regard for what makes the most sense financially for the company?

Whenever someone (including myself) voices concern about an acquisition that is nothing more than empire building (rather than being accretive), they are reprimanded for being overly critical of the CEO, which ultimately affects their internal performance reviews. The Board bends the knee to the CEO rather than vice versa, so there is little stopping the CEO from doing what they want. The company has potential, but the empire-building mindset has me concerned and is making me inclined to leave. Is there any chance to change the mindset of empire-building CEOs, or is washing your hands of the situation the best course of action?

B-dog, it’s an interesting situation. And you’re not alone. I’ve seen this movie more than once.

A CEO and CFO don’t have to agree. In fact, some healthy tension is good. But they do need to respect each other and the roles they play. It sounds like that isn’t happening here.

Normally, if you can’t get your CEO there, the next stop is the board. But if the CEO has the board wrapped around their finger, and people are getting punished for pushing back, that’s not just bad governance — it’s toxic. And it rarely ends well.

So first, hedge your bets. Quietly start preparing options elsewhere. Life’s too short to spend it in a business where good judgment and strong opinions gets penalized.

These are exactly the ground rules you need to establish before you start a new role. I always do this with new CEOs:

“I’ll never blindside you, and I’ll always tell you what I really think. Is that going to be a problem for you?”

If that question causes any discomfort — that’s your red flag. Senior relationships only work as partnerships. You can’t fix a dynamic that’s built on fear or flattery.

That said, there are rare exceptions. Some empire builders can be redirected — but only if they see you as a genuine co-pilot, not a compliance officer. You earn that by showing you understand their ambition and can channel it into value creation, not just governance.

Still, if you’ve got some irons in the fire, you’ve de-risked your next step. So you can afford to take one honest swing before you walk. Sit down with your CEO and level with them. Tell them the kind of CFO you want to be - a real partner who calls it straight - and ask if that’s what they want too.

If the answer’s no, you’ve got your answer.

TLDR: You won’t change an empire builder who doesn’t want to be changed. Hedge first, then have one clean, direct conversation. If they can’t handle partnership, take your skills somewhere they can.

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.

There’s a real CFO merry-go-round happening in the CFO seats of the biggest AI roles right now… In this case it’s interesting to note that Armstrong was an advisor on Elon’s X acquisition. You never know where M&A experiences will take you. You might remember when we interviewed the Shopify CFO he spent years working investment banking side on the Shopify account before leaping over the fence. As a path to the biggest CFO jobs, it’s becoming more common.

Deloitte is out to break records: global revenue of $70.5B for the year. A bit of good news for the Deloitte’s PR team after the ‘mega-oopsie’ of the report they produced full AI errors for the Albanese government… which they’ll now need to partially refund.

‘Growing pains’ with or without AI seem to be abundant in the Big 4…

After the trouble Deloitte’s AI caused by referencing nonexistent academic papers and faux federal court judgments, KPMG made some embarrassing mistakes in a $60k report for the National Health & Medical Research Council. Once again, nonexistent references made their way into the report, but KPMG isn’t willing to admit to an AI problem.

Ex-Walmart exec Steve Schmitt is not stepping into an easy role. Pepsi is dealing with a slowdown in North American sales and has activist investors breathing down its neck.

ICYMI, here are some of my favorite finance/business social media posts from this week. In the words of Kendall Roy, “all bangers, all the time.”:

A fascinating take on the differences between PE and VC playing out in real time…

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

The second edition of our newest newsletter, Boardroom Brief, dropped on Thursday. We took a look at how CFOs are navigating tariffs and the ongoing trade war. Read it here.

On Saturday, I continued my Playbook series on private equity CFOs with a comprehensive look at the math that makes PE work. Check out the newsletter here.

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.