The Wall Street Journal ran an article recently on what firms are looking for in hiring their Chief Financial Officers or CFOs. The article was called “New Job, New Steppingstones”. The point was that as company CFOs’ roles become more strategic some of the traditional skills, or jobs they would take along the way become less important.

Having been a CFO for a mid-sized private firm and two large public firms, I viewed this with interest. Since, as you have learned by now if you follow this blog, I have strong opinions on a Lot of subjects, what qualifications a CFO should possess could be a hot button for me!

The article, with some well thought of recruiters and experts’ comments, made a number of valid and thoughtful suggestions that I even Agreed with. Today’s CFO better have a Strategic and Deal background since that is a huge amount of what he or she will encounter. It is also true, as we have written earlier, that a CFO (and every other senior person) needs to have an International state of mind to participate in this global business world. A new skill the article listed was the ability to “mine big data”. This used to be part of Systems or the Chief Information Officer’s role but now it is a critical part of everyone’s job and may require a bit of a statistics background.

The one thing the article touched on that I Disagreed with was that the traditional accounting or CPA background is often being moved back on the required list for CFO candidates. There has been a movement over the years to downplay the accounting or Controller’s role in lieu of the Treasury function. Accounting can sound boring versus doing some common stock offering or a debt financing Treasury deal. And, now, the article implies using your Strategy or Corporate Development background to do some big Merger or Alliance may be the next new trend.

I have problems with this on several fronts. First, the title CFO contains the word financial. So if you are a CFO or a candidate to be one, you better understand financial concepts and principles. This is understanding accounting, period.

Second, I believe some firms, like Enron, got partially into their troubles become their senior financial people were primarily Treasury or Deal people and did not fully understand some basic accounting concepts. Like what you ask?  The last firm where I was the CFO almost did a deal with Enron. My company had large chemical plants. My company also always needed more cash. Enron came to us and proposed to lend us millions, secured by the future cash flow of one of these chemical plants. In a meeting, I stated that sounded fine but our existing bank arrangements limited how much debt we could have on our balance sheet. Enron said, no problem, the debt for this deal would not be on our books. I, almost jokingly said, oh, it will be on your books then. They said no, not on either of our balance sheets. Rather the debt would be on a “special purpose entity” we would create. Well we never did that deal, although they gave us all very expensive Enron pens. (Note to self: See if the Enron pen can sell on Ebay!)

Third, I strongly believe that any CFO should be able to understand and discuss very complicated accounting concepts with their staff. I was always pleased that some of the people who worked for me, whether a Controller or an Assistant Controller could come and discuss some new accounting rule with me and get my input on it and its impact on on financial position. Nowadays everyone love buying their competitors and often at huge premiums. So the accounting world created a test to see if you could actually earn back the price you paid over a period of time. And if not you have what is called an “impaired asset” that you must record as a loss on your books. The rules for these tests are complicated and involve a lot of theoretical assumptions. I could work through it with my staff but I wonder how someone without much accounting background ever could.

So, before our Human Resource buddies latch onto to these new qualifications for Senior Financial people we better make sure we understand all the issues!

We have been dealing with several family crises involving both my wife’s and my family. Not us directly, but sometimes indirectly can be even harder as you may have much less control or input. A personal or family crisis often is like a business one. Both type of crises can involve health ( physical or business) and, of course, the ever present factor in life and work, money.  And both type of crises have another thing in common. A Crisis does not just start and move directly to a finish; rather crises tend to move in their own, often random way.

Never a Straight Line.

My longtime, internist doctor often says this about other medical conditions. High blood pressure rarely starts out at 120/80 and goes up to 130/90 and then to 140/100. He says the same thing about rising cholesterol levels. He says that more often these health indicators move up to a new plateau, stay there for awhile, sometimes even drop back a little before they rise again. The bad medical indicators always just keep rising.

Never a Straight Line.

Business cycles, stock market indicators work the same way. Financial people love to forecast the next five years as a Straight Line (usually pointing upwards). Stock market analysts predict where one stock or the whole market will be end up trading in the next 52 weeks. But whether the conditions are an upward bull market or a downward bear, the daily and weekly prices go up, sideways and down many times before they settle.

Never a Straight Line.

Individual careers, nowadays, often move the same way. We used to look for job applicants whose resumes should  show ever steady upward progress through title changes and pay scales. And, we would be concerned about people who had the dreaded “break in service”. Today, almost everyone has taken a sideways career move, in order to go forward. And many workers have gaps of months or years on their resumes due to changing or losing jobs, taking personal time for family,  travel or whatever.

When I moved to USG Corporation from Donn, my initial title, in my eyes, went down: I went from Donn’s CFO to USG Interiors V.P. of Financial Administration( a title I still have trouble explaining). Then I was “promoted” from my subsidiary V.P. title to a Director in the USG headquarters. That sounded like a demotion but I was awarded more money and assured it was a good move. Those in large firms understand this madness all too well. And, of course, these bizarre titles and moves are often due to our favorite Human Resource group who love to confuse. A couple of moves and titles later, it lead to CFO of all of USG. A clear promotion.

Never a Straight Line.

And, of course, personal relationships are the ultimate example of this theory. Friendships, siblings, parents and children, dating and even spouses. All have their shares of ups and downs. Hopefully, more ups.

This is always the way in movies or television. The perfect relationship has a major setback. In my wife’s favorite Cary Grant movie, An Affair to Remember, Cary and Deborah Kerr are doing great until their cruise ship docks back in New York and they have to deal with their fiancees. An Empire State Building scene or two later, it all works out.

My wife, Tricia, would not go on a first date with me until two years after we met. After our first date, however, we have been together or spoken on the phone every day for the last 28 years. So that worked out as well. Relationships, like careers, like business and like medical issues move in their own unique patterns. But they all have their ups, downs and sideways.

Never a Straight Line.

So at this point, one might expect a smooth transition or, at least, a strong link to a Chapter in my forthcoming book, The Business Zoo. But wouldn’t that be too easy?

And wouldn’t we lose some of the fun and adventure? Because this blog, like most of business and life, needs to find its own unique rhythm.

Never a Straight Line.