Last issue, the CEO of a Vancouver-based customer software and IT consulting company wrote to ask PROFIT-Xtra readers:
“My firm has grown quite fast since its inception over five years ago. While that has enabled me to get more capable hands on deck, it has also forced me to face my not-so-capable employees, such as my best friend, who I hired as our CFO when I first started the company. He’s competent enough when it comes to basic bookkeeping, but he doesn’t have the education or experience other CFOs have. While he worked out well when we were starting out, I now feel I need somebody who can better manage my company’s growth and help take my business to the next level. How do I handle this situation without burning a major personal bridge? Should I fire my best friend?”
Best reader responses
Wayne Edgar, Trade Exchange Canada:
A good lesson for any entrepreneur when you bring anyone onto your team is this: “Would I be OK firing this person?”
If the answer is ever “No,” then you should not hire that person. You have to be able to separate business and personal. And if anything, or anyone, causes you to cross that line, then it is a recipe for disaster.
That being said, if you are already in that situation you have to first assess whether firing is the only option. Is there another department he would be better suited to? Has he ever hinted at maybe wanting to do something else, but he doesn’t want to quit and upset the friendship? You need to have a discussion with him and see what his thoughts are on the company and where it stands. You might find out that he agrees with your assessment, or in fact might want to look at doing something else but didn’t want to tell his boss/friend.
If, however, you don’t get that easy way out, you need to decide whether a friendship is worth hurting your company and vice versa. At the end of the day, if your business suffers because of him, it will erode the friendship and create resentments that will cause you to lose a friend, and potentially your business.
Kelly J. Ramsay:
As with most companies when starting out, they need a good bookkeeper, and as the company grows hopefully that person will grow as well. Unfortunately, many times this is not the case, and as a result the company reaches a point where it becomes necessary to hire someone from outside as a true CFO or VP of finance. The fact that the person also happens to be your best friend complicates things, but the decision you must make is what’s best for the company.
Yet hiring a new CFO does not mean your bookkeeper should be let go. Frankly, most CFOs (whether CAs, CMAs or CGAs) are not the right people to do basic bookkeeping. As such, you should keep your current bookkeeper and have him take care of the basic accounting tasks, and utilize a CFO for more strategic and longer-term items, as well as implementing processes and practices.
Hiring a part-time CFO may be the way to go. That way you’ll take care of both the company and your friendship.
Marnie Pertsinidis, Modis International Co.:
It’s doubtful that you will be able to terminate your CFO without also ending this friendship. I would suggest that you look at all other options prior to terminating his employment.
You need to meet with this person to outline your goals and expectations clearly and establish a clear and detailed plan to achieve them. Keep this meeting as professional as possible so that there is no room to misinterpret your commitment to meeting these intentions. Ask this person specifically how he plans to close the skill gaps (you will probably have to draw attention to them) in order to achieve his responsibilities.
The outcome may very well be that the CFO will come to the conclusion on his own that he would be better off in another position. Or he could surprise you and meet your expectations!
Perhaps my very newly minted entrepreneur credibility is not such that it warrants consideration…yet. But, the way I see it, you have the opportunity here to fix much of what is wrong with today’s workforce regarding loyalty and trust issues in North America.
Your best friend helped you when no CFO worth an IPO would. He stood by you in the absolutely most difficult of all years in a small business with “potential”: the startup phase. The time when you had no infrastructure, no allies, many dark corners, no clear direction, no guarantees. Rather than reward him for this loyal, trustworthy, steadfast service with termination, ruining his self-esteem and leaving him in your dust of “damn all who can’t keep up with my quest for the almighty brass ring,” why don’t you consider the less trendy yet more worthy option?
Identify the issue with your friend who’s also your CFO. Identify what kind of credentials he will require to keep up with the business. Propose that he consider additional schooling to aid his personal growth (and ultimately your business growth), that he find a mentor, that he put in the effort to become the person he is capable of becoming — quickly but steadily. Should he then choose to say no or fail to meet expectations, then and only then should you have the conversation of what needs to be done for the future good of the business.
I imagine it could or would take him only a year or two (possibly three in total, including schooling) to gain the additional credentials and support required to step up to the plate. Provided his current efforts are not damaging — or, worse, illegal or negligent — is your best friend, the CFO you can trust (with your life) not worth a little effort, even if it costs a little bit upfront in tuition and productivity?
This is one of those moments in life when you can choose to be human, choose to be strong, choose to be a leader — or you can choose the easy and ubiquitous, robotic “buy your way out” option. If you choose the latter, don’t be surprised when someone else stops by to tell you that you’re no longer boss of your own company because you just can’t keep up. It has happened to people much greater in business than you or me.
Choose the former, and perhaps someday you’ll be quoted as a formidable leader who saw, developed and conquered because of it.
For her answer, Marianne McBean will receive a copy of Advantage Play: The Manager’s Guide to Creative Problem Solving by David Ben.
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Watch for another Peer-to-Peer Poll in the next PROFIT-Xtra.