In this post-Enron, back-to-basics world, the thought of a CFO brimming with new ideas seems in itself a very bad idea. This is certainly not the time to get creative with tax shelters, off-balance-sheet financing, or revenue recognition. But if that’s true then what does the CFO bring to the table, other than a calculator and a perpetual case of acid reflux? As a senior executive who helps set corporate strategy, shouldn’t a CFO be capable of fresh thinking about economic trends, market opportunities, and top-line growth?
Tom Davenport, co-author (with Laurence Prusack) of the forthcoming book What’s the Big Idea? (Harvard Business School Press, May 2003), says yes. And no. That is, CFOs could be what he terms “idea practitioners,” people who play a key role in linking ideas with action — who filter, modify, and “fit” new ideas to a company’s specific needs.
But they tend not to be. “In many cases,” Davenport says, “CFOs act as the steely-eyed throwers-of-cold-water on others’ ideas.” Isn’t that a useful function? “There’s no empirical way to measure the value of playing devil’s advocate,” he says. “But when people trumpet that role, I say, ‘Must you?’ It can be too easy to find reasons not to do something.”
Before you vow to skip the book, be advised that the authors do hold up one CFO as an idea practitioner — one who, in fact, made significant contributions by championing information technology. While CFO of Société BIC, the French maker of pens, lighters, and razors, Blythe McGarvie not only brought new ideas into the company regarding transfer pricing, reporting, and, yes, tax strategies, but also helped shape the way in which new ideas were generated and shared within BIC. She helped implement a Web-based system, dubbed Maestro, that consisted of more than 100 virtual “rooms” in which employees could share information and ideas. One goal, for McGarvie, was to move a corporate culture that was very “oral” toward a greater appreciation of “closure”; that is, transform BIC into a company that discusses ideas and implements them.
McGarvie, who left BIC in January to launch her own consulting firm, agrees with Davenport that many CFOs tend to stay in a “comfort zone” in which new ideas don’t excite them much. “That’s one beauty of technology,” she says. “It lets you systematize things like manual reporting, freeing you up to focus on things that can advance the company.”
Davenport says that in the current climate, “trust and transparency are paramount, and those are areas in which a CFO could be very innovative.” He notes that while the Enron scandal cast CFOs in a bad light, “the company was not very innovative operationally, so that leaves an entire area unbesmirched.” Operations, in fact, may benefit from what could be called “steely-eyed creativity,” a CFO strength ideally suited to the times. After all, as New Yorker writer Malcolm Gladwell observed of Enron last year, “They were…looking for people who had the talent to think outside the box. It never occurred to them that, if everyone had to think outside the box, maybe it was the box that needed fixing.”