My practice specializes in recruiting CFOs for owner-managed businesses. And for the majority of the searches I conduct, the title CFO usually translates as either VP Finance or Director of Finance.
But sometimes an owner-managed company doesn’t need the horsepower a VP Finance or Director of Finance brings to the table. Sometimes all an owner-manager needs is someone who can efficiently and competently run the accounting function – bills get paid, invoices get collected, staff get their paychecks, the books get closed in a timely manner, etc.
What a Good Controller Really Brings to the Table?
Of course, there’s a lot more to it than that. You need to stay onside with the tax man and your banker, your year end process should run smoothly, the budget process needs to happen and of course, your controller should be able to clearly communicate where you’ve been, where you are, and what your financial status looks like for the next six to twelve months.
None of this seems like rocket science and most accountants have some sort of recognized accreditation, usually a CPA. So why is it so gosh-darned hard to hire a good controller?
Let’s break it down:
Accreditation may be standardized; experience is not:
Owner-managers tend to be all over the map when it comes to how demanding they are of their accounting staff. Some are very knowledgeable in accounting matters and hold their controllers to a very rigorous standard.
Other owner-managers have very little knowledge of accounting (and even less interest). As long as they’re making good money and the government and their banker are happy, they’re happy too. They may be leaking money unnecessarily all over the place, but unless something bad goes bump in the night, they tend to leave well enough alone.
Accounting involves a lot of routine:
The accounting function is necessarily very cyclic and very routine. The same basic things happen every week, month, quarter and year. Transactions get recorded, bills get paid, invoices get collected, employees get paychecks, etc. You want someone who is comfortable with routine managing that process.
The issue is that many controllers who are comfortable and good at routine are like racehorses with blinkers on – they only see what’s ahead of them and tend to ignore events on either side of them that could materially impact the outcome of the race.
Covid 19 is still with us in spirit:
There’s an old World-War 1 era song titled “How ‘ya Gonna Keep ‘em on the Farm After They’ve Seen Paree”. Soldiers returning from Europe after the war tended to gravitate to the bright lights of the big city instead of going back to their family’s farms.
Likewise, working from home became the new normal as of 2020 and it’s a been a bear getting junior and middle rank accountants like controllers to commit to coming to the office five days a week again. Especially in major urban centers where commuting is also a bear.
The thing is that owner-managers tend to be old-school. They don’t want to have to set up a Zoom call to ask a question about this months P&L. They want to walk to controller’s cubicle down the hall and get the question answered now.
Being a controller is the top of the career ladder for many people:
Many of the VPs of Finance I interview have spent some time as a controller on their way to CFO. For them, it was a necessary stepping stone to the next stage on their career. These are usually very bright, accomplished, ambitious, well-educated professionals who knew that since they’d one day be managing controllers, it would be useful career-wise to get some practical experience with that function.
To use a military analogy, a CFO is like the colonel who’s spent some time as a platoon leader. If you own a $25mm company and need to hire a controller, you’re not looking for that future senior officer. You’re looking for the career platoon sergeant.
The difference being that career platoon sergeants tend to be uniformly well qualified, experienced, motivated leaders and very good communicators.
Career controllers are a much less homogenous lot. Some are well qualified, motivated leaders with good communication skills but unfortunately, in the world of owner-managed businesses, many are not.
So, owner-managers who are looking for a very good controller who can materially contribute to the success of their company tend to be in the unenviable position of sorting through a very large haystack that doesn’t contain as many needles as they might like.
Want to Attract a Better Controller? Let’s Talk
In a future article, I’ll address what you can do to mitigate these factors and attract a good controller. If you’d like to have that information sooner rather than later, feel free to send me a note to lance@osbornefinancialsearch.com or call me direct at (416) 567-7782.
