CFO

Navigating Controller Transitions in a Growing Company: A CFO’s Guide

Strategies for skill development, internal reassignment, and respectful exits.

Leadership Topics

06 Oct 2024 — 6 min read

CFO managing a smooth transition for a company controller during a period of growth. Photo by Campaign Creators / Unsplash.

As companies grow and evolve, the demands on their finance teams also change. What may have worked for a company in its start-up phase often becomes insufficient when scaling up or preparing for acquisition-focused growth. For CFOs leading this charge, one of the most delicate but crucial transitions they may face is managing the performance of long-standing controllers who may no longer have the skills required to meet the organization’s new demands.

In recent discussions with two CFOs of venture-backed companies, each expressed concerns about their current controllers—employees who had been with the companies for years but now struggled to keep up with the companies' evolving needs. Despite being hardworking and well-liked, these controllers lacked the technical skills necessary for their respective firms’ future growth. One controller faced challenges in acquisition accounting, while the other was unable to lead upcoming audits due to gaps in technical expertise.

This scenario is not uncommon. As businesses transition from start-up mode to scaling or rapid growth, the skill sets needed within the finance team also evolve. CFOs are often tasked with assessing whether existing team members can adapt to these new demands or if more drastic changes are needed. Handling such transitions requires a thoughtful and strategic approach to maintain team morale and ensure the company’s continued growth.

The Evolving Role of the Controller in a Growing Company

In a start-up, controllers primarily focus on operational accounting—processing transactions, managing cash flow, and ensuring compliance. As the company scales, the scope of responsibilities widens to include more strategic oversight, often requiring expertise in areas like FP&A, acquisition accounting, and compliance with complex audit requirements. Controllers who excel in operational roles may find these new demands overwhelming if they haven’t had the opportunity to develop these higher-level skills.

For CFOs, the challenge is clear: how do you manage a valued, long-standing controller who may no longer be able to meet the company’s growing needs? This situation demands a balanced approach, where both the company and the employee’s interests are considered. Here’s a strategic three-step process that can help navigate this delicate transition.

1. Skill Assessment and Development: Can the Controller Adapt?

The first step is to assess whether the controller can develop the skills necessary for the company’s future. CFOs should collaborate closely with the controller, offering coaching and mentorship to identify skill gaps and create a development plan. It’s important to invest time in this process, not only to give the controller a fair chance to grow but also to retain valuable institutional knowledge that long-standing employees often possess.

Encouraging the controller to participate in professional development opportunities, such as attending workshops or joining organizations like the CFO Leadership Council, can help them acquire the necessary skills. Continuous learning can bridge the gap between their current abilities and the demands of the evolving role. However, this process should be closely monitored. If the controller shows consistent progress, further investment in their development is warranted. If not, it may be time to consider alternative paths.

2. Internal Transfer to a New Role: Exploring Alternative Contributions

If the controller struggles to gain the necessary skills, the next step is to explore other roles within the company that might better align with their existing strengths. Often, controllers have strong operational skills that could be useful in areas such as FP&A, where they can manage day-to-day financial operations without the burden of strategic financial planning.

Reassigning the controller to a new position can be a win-win situation. The company retains a loyal employee with deep institutional knowledge, while the controller can continue contributing in a role that better suits their capabilities. When done properly, this shift can be seen as a positive move by both the individual and the broader team, especially if the transition is communicated as a strategic reallocation of talent within the organization.

3. Respectful Exit: When Transition Is the Best Path Forward

If, after attempts at development and internal reassignment, it becomes clear that the controller cannot meet the company’s evolving needs, it may be time for a respectful exit. By this point, the CFO and controller should have had multiple discussions about skill gaps and performance shortfalls, so the transition should not come as a surprise.

The exit process should be handled with care and professionalism. A fair severance package and potential outplacement services can help ease the transition for the controller, maintaining their dignity while preserving company morale. Publicly acknowledging the controller’s contributions and handling the exit with transparency can prevent negative fallout within the team. This approach not only supports the individual but also demonstrates the company’s commitment to treating its employees with respect and fairness.

The Long-Term Impact of Navigating Controller Transitions

Throughout my career, I’ve encountered several controllers who, despite their dedication and hard work, were not able to grow with the company’s evolving demands. In each case, their exit was handled respectfully, and they were able to find new roles that better suited their skills. This experience underscores the importance of a thoughtful transition process—one that ensures both the company’s growth and the employee’s well-being are considered.

Navigating controller transitions is just one aspect of the evolving role of the CFO in today’s fast-paced business environment. As companies continue to scale and adapt, CFOs must strike a balance between maintaining continuity and fostering growth by ensuring that key financial roles are filled by individuals with the right skills for the future.

The Leadership Topics