01 Mar Stress and the CFO
Being a CFO, or a business owner acting as your own CFO, can be incredibly stressful, and it just gets more so the larger the company you manage. Those of us who have worked in this role for years know it, and now new research confirms it.
Recruiter Robert Half surveyed CFOs around the globe to find that three in four expect stress levels to rise in the next few years. The study attributes CFOs’ rising stress levels to four factors: increasing workloads, growing business expectations, shorter deadlines, and a lack of skilled staff.
Only about a third of finance departments regularly discuss health and wellness, while less than ten percent never talk about it at all, finance journalist Sally Percy writes in Forbes (“Are You A Stressed-Out CFO? Don’t Worry, You’re Not Alone”). She attributes this to “the typically stoic approach taken by finance professionals.”
“Setting aside all the routine pressures that they have faced for some time – year end, month end, presenting to the board, meeting investors, the prospect of the auditors uncovering an enormous fraud etc. – the fast-changing world in which we live today is inflicting extra burdens upon them,” she writes.
Added stressors include:
- Data Overload: CFOs are increasingly expected to sift through an ocean of data to find the information necessary for boards to make meaningful decisions.
- Cybersecurity: Since cyber criminals are after money, CFOs find themselves responsible — regardless of whether or not they are in charge of the IT department.
- Automation: CFOs wrestle with a shortage of skilled finance staff “while being told that everybody in their department is going to be replaced with robots any minute now,” Percy writes.
Beyond all this, CFOs must cope with a “relentless pressure on organizations to keep up – with technology, with rivals, and with customer behavior,” Percy writes.
It’s all true. Over almost four decades I have worked with hundreds of companies in more than 60 industries – companies large and small, public and private, and domestic and international operations. I’ve been in the trenches with business owners when they’ve dealt with the most stressful situation of all – managing a severe cash flow crisis.
I’m talking about situations where the company has X dollars and needs X times five; where vendors are calling all day every day spouting non-stop obscenities; where employee’s paychecks are bouncing; where the IRS is threatening to seize bank accounts and put the company’s officers in prison; where investors are threatening to “pull the plug”; and where people are literally collapsing in the halls from the pressure.
This kind of stress is physically painful, emotionally devastating, and psychologically debilitating.
Your health suffers, your family suffers, and you’re not sure how it will ever get better. The best way to ensure your company survives is to never allow it to get to into such a desperate situation in the first place. Most of the time such situations can be avoided with the right systems, the appropriate tools, and a focused and disciplined effort by everyone involved.
The key is to understand where you are today and how your actions will impact the cash flow outcomes in the future.
Regardless of the size and structure of your company, you need to have the financial forecasting capabilities of a CFO in place. It’s important not only to ensure your company’s viability into the future, but also to make sure you can have a life – now, and when you retire or sell your business.
How can you tell if your stress levels are getting out of control? This is a topic Michael Gerber and I explore in our upcoming book “The E-Myth Chief Financial Officer.”
Three signs your time is out of control:
You have to be there all day every day to hold things together.
You can never take a vacation without fear of the company imploding.
You take a vacation but get constant phone calls, emails and texts.
Whether your company makes $500,000 or $50 million a year, when it is all over, what good will that money do you if you die on the job of a heart attack? Without solid systems in place to gather accurate information and analyze it, you are at risk of making a decision that could prove fatal for your business at any moment.
On the other hand, the better the systems you have in place, the more smoothly your company will run. This will free you to spend more time working on, rather than in, your business.
When you are freed from having to micromanage the details, you can actually have a life – and your business will have value.