It has turned out to be one of the most engaging ideas Financial Director has asked the finance community: do entrepreneurial businesses need an FD?
Our blogger, Maurice O’Shea of interim FD business The FD Centre, posed the innocent-looking question in his November 2010 Extraordinary Items blog, casting his mind over various growing companies whose FDs were failing them.
We were so surprised by the number of FDs who felt passionate enough about his comments to start a debate on them at our LinkedIn group that we published their responses in our January 2011 issue. But the debate kept going and in the last few weeks more FDs added their voices to the mix.
So do entrepreneurs need an FD?
“What a great discussion. My view is this: Yes, because we can say no when needed and yes when needed, both in equal measure,” Paul Russell (pictured), group FD at executive search outfit Antal International told our LinkedIn group. “You have to be commercial and you have to be a little bit entrepreneurial as the FD, but just a little bit too scared to be an entrepreneur in your own right. Will a classic accountant as the FD work? No, never. Trust me, I have the scars and so do a lot of people I’ve seen fall by the wayside.”
Mark Neilan, FD at sales recruitment company Finlay James Associates, added that a good FD “should be able to save money – ensuring procurement of the right things at the right price – and maximise sales by authorising the right business and turning away business that is not profitable. If the FD, in saving money and maximising sales, makes the company more profit than they cost, it is a no-brainer. If not, you probably do not need someone full-time: just get an accountant and a book-keeper.”
This corresponds well with the views expressed in the debate during December, when a throng of FDs shared their views on why they thought – as Antal’s Russell does – that a good FD should be both a little entrepreneurial and the voice of reason to the entrepreneurs themselves.
The FD and the entrepreneur “have to be a double act; they have to be on the same wavelength and work exceptionally well together”, Linda Andrews, FD for Glasgow-based Eurofriction, told us then. “An entrepreneur tends to be a creative, sales-led individual who needs accurate, timely, commercially focused financial information in order to make the right deals.”
Steve Waldron, financial controller at London-based Grange Hotels, concurred.
“Entrepreneurs are precisely the breed that needs someone to point out that the ‘emperor has no clothes’,” he said. “They traditionally have a short attention span and need the kind of due diligence that a financial man can supply.”
That Maurice’s question captivated FDs so says much about the nature of their role in post-recession times.
Read all the FD comments on Maurice’s blog here. You can find a link to his blog at that page