Business entrepreneur Steven P. Delarge learned quite a bit from his own experience in building a standalone finance team. The opportunity came when Steven P. Delarge was involved in the sale of the operating division of a public company. Prior to the sale, Steven P. Delarge’s division had its finances handled by the parent company, but following the sale a new finance team had to be formed.
Steven P. Delarge called upon all available resources to put his team together. To begin, Steven P. Delarge sought out other businesses in the field that had been through a similar experience. Steven P. Delarge was able to gather advice from portfolio companies who had also been sold by a parent company. These companies had also found it necessary to put together a standalone finance team, as well.
During this process, Steven P. Delarge called upon external audit partners who were invaluable in helping the company set up a finance team. Not only did they help Steven P. Delarge and the rest of the team get the financial books in order, they were able to provide the names of local recruiters who could put Steven P. Delarge in contact with local talent. This local talent, as it turned out, would be the key to building a successful standalone finance team.
Steven P. Delarge suggests businesses might find inspiration in Xerox Corporation, which deliberately made its finance team independent of all other organizations. In completely reorganizing the company’s accounting unit, CFO Lawrence Zimmerman created a process that offered measurable results, Steven P. Delarge points out. These operational results were geared specifically toward what a CFO needs to know about operations, Steven P. Delarge explains, not what the local operations manager needs. And that is exactly the way it should be, says Delarge.
As Steven P. Delarge explains, the finance team has external sources to which it answers regularly. Because of this, Steven P. Delarge believes the finance team should be accountable to itself first. A CEO may have his or her own demands for reporting, a good CEO understands that the finance team is also responsible for answering to external audits that may or may not coincide with the needs of the company, including SOX compliance, SEC requirements, and others.
By building a good standalone finance team and allowing them to independently operate to their best ability, Steven P. Delarge believes a CEO will set his team up for success. And if a finance team is successful, it reflects well on the rest of the company, concludes Delarge.