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How CFOs Have Evolved From Bookkeeping Into Corporate Leaders Chief financial officers increasingly are the executives charged with setting the stage for growth.

By David DeWolf Edited by Dan Bova

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

My advice to every entrepreneur is to hire people who are better, smarter and more experienced than yourself. Unfortunately, this advice is easier said than done.

Depending on the entrepreneur's background, he or she will find different positions to be more challenging to fill than others. A product visionary has likely come from a product or engineering background with significant exposure to technology. This person may be more confident hiring a CTO than the domain expert.

The CEO who is a business-oriented domain expert knows business and is experienced in sales and marketing. This person is likely more comfortable finding a great VP of sales. Very few entrepreneurs, however, are comfortable hiring their first CFO.

Related: Hiring Executives With Experience

Two things make the CFO hire both unique and difficult. First, most first-time entrepreneurs have had limited exposure to CFOs throughout their career. Second, the role of the CFO is rapidly changing, with very little being written about the "contemporary CFO." A CFO is no longer a bean counter providing financial analysis and mitigating legal and financial risks. Today's CFO is the CEO's right hand executive, a strategic advisor and an operator.

Eighteen months ago I was faced with this exact dilemma. 3Pillar had rapidly grown to the point of requiring a CFO. Contemplating our first institutional financing, I was uncertain how to describe the CFO I needed. As I spoke to my advisors, it became obvious that there is a wide range of alternatives - accountants, financiers and operators - all very qualified CFOs, each bringing a wildly different perspective to the position.

Over the course of six months, I spoke to 24 candidates. The top nine candidates I spoke to multiple times, and the top three candidates I spoke to on several occasions. Through this process I gained a profound respect for the CFO role and came to understand how the role has rapidly evolved in the past several years. By understanding this evolution and the value it could bring my organization and myself, I was able to identify and recruit a premier executive.

CEO's right-hand executive. Today's CFO is the CEO's confidant and enthusiastic champion. He or she is a sounding board and collaborator on everything from financial performance to strategy. The individual must be trustworthy and someone with whom the CEO is comfortable sharing everything from strategic ideas to personal-professional struggles. While the contemporary CFO shares certain values and ideals with the CEO, he or she must think differently enough to provide an alternative perspective.

Additionally, the contemporary CFO lives, breathes and puts into action the CEO's corporate vision. The individual understands the importance of culture, brand and strategy, and works actively with the team to justify investments. Having an EQ (emotional intelligence) as strong as their IQ, the contemporary CFO is in tune with the culture of the organization. He or she understands the importance of momentum for the organization to reach its full potential.

Related: Build Your Management Team

Strategic advisor. The contemporary CFO is the senior executive team's on-staff advisor. The person understands, in depth, the market opportunity, strategy and business model of the organization and provides a unique perspective that looks across all departments.

Besides the CEO, the contemporary CFO is the only person with a clear view of the big picture and limited bias toward one aspect of its performance. To play this advisory role well, the individual is a business executive first and a financial executive second. They need a strong grounding in accounting and finance but that is simply a given in business today.

Throughout my discussions with a myriad of CFOs, I found that the most qualified candidates in this regard began their career with a strong background in public accounting. Eventually, they moved into a business and quickly moved up through the finance department ranks. Those who have exposure to both the finance and accounting sides of the business, as well as strong leadership experience across a range of businesses, performed well in my assessment.

Disciplined operator. Today's CFO provides data, information, insights and puts them into action. The contemporary CFO understands how to build scalable systems and processes. The individual develops KPIs and understands performance trends, but also develops and implements strategies to improve them.

To excel, the contemporary CFO must move away from the financial report card and embrace business insights. For the CFO, historical performance has been overtaken by trend recognition, forecasting and key performance indicators, and business and operating plans of the future. To ensure success, today's CFO must speak the language of business and understand that the key drivers of business are often significantly more than what shows up on the balance sheet.

Innovative technologist. I would be remiss not to mention that tomorrow's CFO drives innovative technology solutions in support of the business. Tomorrow's CFO embraces the "product mindset'' that products need to be engaging, delightful to use, deliver the stated business outcome and continually evolve. They understand that the consumerization of software has dramatically raised the bar. To empower employees to excel, the technology itself must get out of the way.

An educated consumer of technology, tomorrow's CFO pushes the envelope, demanding creative solutions that empower employees. They are dangerous enough to know what to ask for and educated enough to know what is possible.

Of course, there are legal, regulatory and financial items that are necessary for today's CFO to understand, but the contemporary CFO is, above all, a leader. He or she knows how to manage the status quo while always pushing the organization forward. The contemporary CFO demonstrates this first and foremost in the evolution of his or her own role.

Your business can't afford not to have a contemporary CFO. The days of tending the ship are over.

Related: 5 Ways Interns Offer Value Your Executive Team Can't Match

David DeWolf

President & CEO

 David DeWolf is the Founder and CEO of 3Pillar Global, one of the Mid-Atlantic’s fastest growing technology companies. In this role he has guided 3Pillar to a leadership position within the Product Development Services sector, establishing 3Pillar as the go-to innovator for content, information, and data-rich companies looking to grow revenue through software. In 2012, David was named one of SmartCEO Magazine’s “Future 50.” In 2011, he was recognized by the Washington Business Journal as one of “40 Under 40” who are Washington, D.C.’s brightest young business leaders. "

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