Do You Lead or Manage?

Have you ever considered the difference in leading or managing? Often companies put people in a leadership position and all they really do is manage. Let me elaborate.

CFO or Controller

It is common in small companies to have the head of the financial operations to be called a CFO (Chief Financial Officer) or a Controller. Frankly, my observation is that this rarely is based on anything other than what the CEO or President of the company wants or even a personal desire of the person in the position. While there is some overlap, there is really a fundamental difference between a true CFO and a Controller. The diagram below illustrates this.

lead or manage

As you can see from this diagram, a Controller is focused predominately on past performance and the present financial position of the company. However, the CFO, while interested in the past and having a need to know the present, is highly focused on the future and the company’s ability to meet obligations and grow. Knowing this difference is critical to selecting the right person. While some people can easily transition from Controller to CFO, many are simply not wired to be a CFO.

Another difference is that while a Controller may at times have to lead, most of the actions are either hands-on or managing the activities of others. The CFO, on the other hand, is much more in a role of leadership and ideally is not tied down in hands-on tasks or managing the activities of others.

If you understand these differences it will be easier to determine whether you need to hire someone to lead or manage.

CEO or COO

The difference between a CEO (Chief Executive Officer) and a COO (Chief Operating Officer) is similar to the difference between a CFO and a Controller. A COO is much more focused on managing the current activity and doing some planning for future actions. It is much more of a tactical position. However, the CEO must be future oriented and hopefully somewhat visionary. This role is more strategic than tactical.

Just for clarification, these are general observations and guidelines. No position falls totally within such strict definitions. But it is something to consider when hiring someone or considering a new position. Whether trying to hire someone or whether you are considering a new position yourself, it helps to know if the emphasis is to lead or manage.

If you want to know more, contact AimCFO – Contact

As always, your comments are welcomed.

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