CFO Systems – Building America’s Premier Fractional Leadership Team
Interview conducted by:
Lynn Fosse, Senior Editor
Published – July 26, 2021*
Managing Director, CFO Systems LLC
CEOCFO: Mr. Frevert, what is CFO Systems?
Mr. Frevert: CFO Systems is a team of experienced professionals providing fractional leadership in the CFO role, controller role and HR director role for the middle market and lower middle market in America.
CEOCFO: How common is it today to have these roles filled by somebody outside the organization?
Mr. Frevert: One, it is extremely common to have a fractional leader whether CFO, controller, HR director. I will follow-up on the second part of your question, “outside the organization” – CFO Systems takes a different approach in that we are not outside the organizations that we work with but we are very much inside.
We step into a leadership role; we step into the management team. We frequently take an officer position in the companies we are working with.
CEOCFO: When would somebody call on CFO Systems?
Mr. Frevert: Our clients call on CFO Systems typically when there is turmoil, which can be rapid, dramatic growth or rapid change, or it can be serious stress, “in the ditch” as we say. I think part of your question was “how long?”, temporary is different than fractional. Temporary is short-term and we use the term interim and we do some interim work, but the bulk of our work is long-term part-time, or fractional. It is truly that fractional for three years, five years, nine years, twelve years. We have a couple of clients that we work with in the 9- to 12-year range.
CEOCFO: When one of your people is stepping in and becoming part of the team how does that differ from someone that might be there fulltime?
Mr. Frevert: For some people it can take a little bit of adjustment but for others they just absolutely love it. Our model is for our people to work with three or four or even five companies concurrently. Ideally, they will office at their largest company. That decision is extremely convenient and cost-effective for all, but especially for the company where they office. In that case, the CEO and executive team can ask our team member to step in if they are needed on a call or need to meet with someone in person.
Our client executives feel relieved when one of our experts’ steps in to take the lead, make decisions, and guide the company in a positive direction.
The biggest and strongest feeling our client executives get is a feeling of relief that CFO Systems is here to take the lead, make decisions and get stuff done.
CEOCFO: Your site shows, “Our approach is client centered.” How is your organization client centered?
Mr. Frevert: I think the two primary differentiators for CFO Systems is that we are the CFO, the controller, and the HR director. We are not consultants outside the organization identifying issues and challenges and making recommendations. We are leaders inside the organization identifying challenges and issues and then fixing them. I know that there are other fractional leadership firms that specify they do not make decisions, only recommendations. CFO Systems is 180 degrees the other way. We want to be on the team, making decisions that lead to growth.
The other thing that we are seeing is the development of virtual firms. Some are quite visible and do some pretty serious marketing. These firms take a different approach by identifying several hundred talents and advertising them on their website where clients can efficiently identify the type of talent they need.
We are still a little bit more old-school where we want to conduct business in-person. We believe that leadership is doable remotely, but it is much more effective if we have been onsite to build rapport and lead the team. You will see our people onsite most of the time.
CEOCFO: When a company turns to you what do you look at so you can provide the best fit?
Mr. Frevert: The first thing we listen for is culture and core values. We feel very strongly about our four core values and do our best to screen potential clients that either share or embrace the same core values. Then review personality, energy, their industry, and their challenges, rippling down that waterfall to determine the right person.
CEOCFO: For the people that are part of your team, what does it take to be a good fractional CFO or someone that can immerse themselves in a particular company or companies and still be objective?
Mr. Frevert: We look for the same thing. The first and primary piece are the four core values of family, get stuff done, team, truth, and transparency. After we find talent that has good energy and embraces those four core values, we invite them to join the team.
What we are looking for secondarily would be that experience as well as the energy and ability to learn something new. One of the benefits to the people on the team is the ability to see and learn new industries, systems, and challenges. In two years they may see as many challenges and learning opportunities as they would in ten.
CEOCFO: Do some people work with you for experience or is that something secondary?
Mr. Frevert: We survey our people routinely. For the last five years, the number one reason people have joined CFO Systems is for the flexibility. The second reason they join is the business model. They enjoy the way we structure the firm and the work. After they have been here two years or more, they not only stay for the flexibility but also the variety of learning different things every day.
CEOCFO: What have you learned through the COVID experience that you are able to continue with in what is hopefully now a post-COVID year?
Mr. Frevert: The number one thing we have learned is that calm leadership is needed regardless of the position in the organization. Good calm leadership is just absolutely invaluable. Our clients look to us for leadership and decisions, for what their policies should be for COVID testing, for physical barriers, or whatever, and how we come to those decisions. The second thing we have seen and learned is that a virtual work world is possible especially in the technical areas like accounting but more in the senior accounting role as well as in some of the HR specialist roles.
Leadership really does require a personal touch. In every size organization, having that rapport that comes not from a Zoom call every Monday but from sitting down and talking to people and understanding who they are and why they are here.
CEOCFO: I see from your site “Financial leadership, procurement specialist, human resource strategists.” How do you continue to add other titles you would like to offer? Why have you added and branched out?
Mr. Frevert: Primarily because the talent shows up. When Laura Pavalis showed up in our office ten years ago to do some temp work at the front desk, she was recently retired and quickly saw the model and business and said, “Hey could we do this in HR?” I said, “Absolutely. Every client has people, every client needs some HR and we can grow that.” It grew fairly rapidly to the point that we started adding more HR people. Mike Mohr approached us a year or so ago having recently left a couple of really quality organizations here in town, he asked if we could do this in procurement and I told him I think so and we would give it a try and explore.
Our approach is very much focused on what the middle market needs, what they need that is not their core focus and accounting, finance, HR, procurement, are obviously not core focus for our $40 million manufacturing company. Likewise, IT is not, legal is not, but we have decided to keep our focus controller, CFO, HR director, and procurement roles.
CEOCFO: What do your people look at as far as keeping up with certain industries, with ongoing training?
Mr. Frevert: The most efficient way is to participate in the industry publications and whether it is from renewable energy or trucking or daycare, to be involved in and reading the industry publications. Secondarily would be industry organizations and staying current on those. There is such a plethora of information out there so staying current is not the challenge as much as finding the most efficient and effective source of current information.
CEOCFO: How is business?
Mr. Frevert: Absolutely booming. We take calls from potential colleagues and clients from across the country. We fully anticipate growing from the 55 on the team to 70 by year end.
CEOCFO: How do you stay in-touch with CFO Systems personnel?
Mr. Frevert: We have a process we call BPQC which is best practices and quality control. Similar but on a scaled-down version is what the CPA firms do, we have a concurring review and we call it best practices and quality control BPQC. Everybody that is providing client service has a client selected every quarter to be reviewed by a fellow CFO Systems director. We really do have a very effective job of sharing and spreading best practices as well as ensuring some QC is in place.
The other side that is more fun is that the core value of Team, so we have a virtual team meeting every week that includes topics from networking to updates on the Cares Act, to PPP, to some other topic of interest and that is every week as well as once a month. On the third week of every month, we facilitate an all-team meeting that provides an overall update on where we are as a firm and our client service, who is new to the team, and any other news and updates as well as a reinforcement of our core values.
CEOCFO: What is next for CFO Systems Inc?
Mr. Frevert: We have a vision of being America’s premiere outsourced leadership team. Year-over-year, we have grown exponentially, and we plan to have 300 members on our team by the end of 2030. As the middle market economy continues to grow and embrace our business model, the ability to find somebody with 20-30 years of experience in numerous industries, that can come in to a $20 million, $40 million or $80 million company and provide leadership is just absolutely invaluable to that middle market and lower middle market. While continuing to expand and systemize, we will continue to provide an opportunity for people who love the model and the flexibility and have a passion for providing fantastic leadership for our clients.