3 Signs You've Got the Wrong FD
For small and medium-sized enterprises (SMEs), the role of a Finance Director (FD) is pivotal. The right Finance Director can steer your company towards growth and stability, but the wrong choice can lead to setbacks and missed opportunities. Recognising the signs of a mismatch is crucial for business owners.
This blog explores three key indicators that might suggest your current Finance Director may not be the right fit for your business's unique needs.
A Finance Director can be an invaluable addition to your team, but it’s crucial they’re the perfect fit,
Do you need to hire a new CFO? Here’s the signs your current FD isn’t the right match…
Your FD lacks strategic vision
A telltale sign of an ill-suited FD is a noticeable absence of strategic foresight. A great Finance Director does more than manage books and ensure compliance; they should be your strategic partner, contributing to the company's growth plans with insightful financial forecasting and analysis.
If your Finance Director is overly focused on the minutiae of day-to-day accounting without providing strategic guidance or innovative solutions to drive the business forward, it may be time to reassess their fit within your organisation. Instead, you may need a strategic fractional CFO alongside a Finance Manager or Financial Controller. Your FM/FC can manage the day-to-day finance tasks while your fractional CFO approaches everything with a strategic mindset.
They’re not the right cultural fit
Effective communication is the bedrock of any successful leadership role, especially when it comes to a Finance Director. They must translate complex financial data into actionable insights that non-financial team members can understand and act upon, taking the data and working it into a long-term strategy.
An FD who struggles to communicate financial information clearly or fails to engage with the rest of the team on financial matters can create a disconnect between your company's financial health and its strategic objectives. This communication gap can lead to misinformed decisions and missed opportunities for growth.
Further, as they’re an integral part of your business, they need to be the right personality fit. Would you invite them to a family BBQ? Could you have great conversation in a pub garden? Personality is just as important as skillset, and ensuring they seamlessly blend in with the rest of your team and business means you’re more likely to be on the same wavelength.
They’re less agile
In today's fast-paced business environment, adaptability and a willingness to embrace change are essential traits for any Finance Director.
If your FD is resistant to new technologies, methodologies, or innovations that could enhance efficiency and provide better financial insights, this resistance can hinder your company's ability to remain competitive and agile. An FD should be a catalyst for change, driving the adoption of new systems and processes that streamline operations and improve financial reporting and analysis.
For example, do you need to consider a new software project? Is your current finance software still serving your needs as a business? If not, your FD should be noticing and working on this ahead before you’ve even identified the issue. They should be agile in their role and adaptive to change.
The importance of finding the right fit Finance Director
Finding the right FD for your SME is more than a matter of qualifications and experience; it's about ensuring a match in vision, communication style, and adaptability to change. The right FD should be an extension of your strategic team, capable of driving financial performance and contributing to long-term growth.
The impact of an FD on the success of an SME cannot be overstated. Recognising the signs of a mismatch is the first step toward making a change that could redefine your company's trajectory.
If you're experiencing any of these signs with your current FD, it may be time to consider a new direction. Working with a fractional CFO can often be the best solution for SMEs. From being highly adaptable to more affordable, a fractional CFO can bring a wealth of knowledge for a fraction of the price.
At The Finance People, we help you gain access to expert-level CFOs on a part-time, affordable basis. We’ll match you up with the right fractional CFO based on your business needs (following an audit) and ensure the perfect cultural fit. Get in touch to meet your ideal fit CFO today.
