Managing Upwards: Standing Up to Your Boss

I recently had conversations about the CEO <> CFO relationship with two clients (at very different stages in their scale and growth.) The common thread was that CFOs need to be able to “stand up to the CEO” without coming across as disloyal or too negative about the prospects of the business. Managing upwards is tricky business.

The most important jobs of the CFO are to ensure that the business is appropriately funded and that investors trust the budgeting, reporting (financial and operating metrics) and business judgment of the leadership team.


Conflict: Necessary and Uncomfortable

Achieving these two goals requires managing upwards and standing up to the CEO. And that can mean conflict. While conflict is uncomfortable, it is something top-notch CFOs must do.

So the question is this: How can CFOs engage in ‘conflict’ around business metrics and financial targets in a manner that is productive, healthy, and efficient?

Here are a few suggestions on behaviors the CFO should adopt that will help drive the long-term success of the business while building trust and respect with the CEO and investors.

  1. Bring ‘Healthy Skepticism’ into Leadership Meetings
  2. Take the Outsider’s Perspective
  3. Push for Prioritization
  4. Plan for ‘Known Unknowns’
  5. Do Pre Mortems
  6. Have Leading Indicators


Let’s dive a bit deeper.

There was a post recently on LinkedIn titled the CFO Checklist.’ It contained a list of the 20 things a CFO needs to do when starting a new job. A close friend and Journey CxO Member, Sal Abdulla, wisely added a critical missing item to this list: Don’t run out of money.”

Sal’s addition to the list is the most important job of the CFO.

Another I would add is “Build trust with your investors.” Investors lose trust when financial targets are regularly missed — particularly when lower revenue is combined with higher operating expenses.

Achieving both these ends — ensuring the business is funded and investors trust the leadership team — requires standing up to the CEO.

CEOs are naturally people whose cup runs over with positivity. They require these skills to persevere amidst challenges, hire top-notch people who have alternatives, get early customers to take risks, and convince investors of huge future potential.


Balancing the ‘Yin” and the ‘Yang’

CFOs can act as the ‘yin’ (the metaphorical representation of calm, stillness, and dark) to CEO’s ‘yang’ (the metaphorical representation of energy, light, and motion.)  As the image to the right depicts, within each side, there exists a piece of the other. So in a good pairing of CEO and CFO, both parties will have elements of each side within their personalities.

The CFO job requires:

  • Being more realistic in budgeting (i.e. conservatively planning for growth) than the Board and CEO would ideally like;
  • Identifying leading indicators of future performance and linking incremental spend to these indicators being achieved; and,
  • Creating back-up plans to avoid running out of cash. Only in the absolute best cases do things go better than planned or expected, so having a plan B, and maybe even a plan C, is wise.

Running out of money can include tripping debt covenants. Or more commonly it results from a combination of the cash balance getting very low, the monthly burn rate remaining stubbornly high, and the business metrics being just ok (i.e. decent growth but nothing special, reasonable retention but not outstanding, and efficiency metrics being only palatable.) 

When businesses reach this point, the options are limited — (i) a fire sale; (ii) significant layoffs; (iii) a recapitalization or bridge financing where whole classes of shareholders are either wiped out or severely diluted. None of these outcomes is a good one for anyone involved.

As with many things in life, it is better to have the difficult conversations sooner to enable taking ‘evasive action’ which helps minimize the chances of worse outcomes in the future.


Here are some behaviors I recommend CFOs adopt to increase the chances the business will be successful.

  • Bring ‘Healthy Skepticism’ into Leadership Meetings.
    • Asking, in a curious rather than judgmental manner, for data or evidence to buttress projections (especially around revenue growth).
    • Show historical performance with metrics that provide guidance on the most likely trajectory of the business. Distribute these metrics regularly and widely so that they are not a new data point when discussions arise.
  • Take The Outsider’s Perspective.
    • We all fall in love with our own ideas. It is human nature. I know I did when pushing investment ideas when I was working at a fund. And this natural tendency is further influenced by incentives — both financial and emotional (i.e. wanting to be liked and popular).
    • Great CFOs can combine the outsider’s perspective (asking lots of questions, doing extra diligence, asking what if’s) while having the insider’s knowledge (deeply understanding the customer, the product and the business).
  • Push for Prioritization.
    • CEOs often want to get a lot done. More than is usually possible given the level of resources available. Being a successful CEO (and particularly a successful founder) is a belief that anything is possible.
    • Prioritization has two elements. First, delay certain projects to future periods. Don’t allow the organization to undertake too many complex things at the same time. Second, identify the order in which projects should be undertaken. In a challenging economic environment focus on retaining existing customers, then on expanding their usage and last on adding new customers. Similarly in the product and engineering efforts, ensure existing features work really well and educate users on their benefits before building new features (even if that is more fun).
  • Plan for ‘Known Unknowns.’
    • Andy Grove, in Only the Paranoid Survive, addresses this better than I could. “You need to plan the way a fire department plans: It cannot anticipate where the next fire will be, so it has to shape an energetic and efficient team that is capable of responding to the unanticipated as well as to any ordinary event.”
    • One way to have more flexibility to respond to the unanticipated is always having a cushion in the expense budget.
  • Do Pre-Mortems. Identify Actions to Proactively Mitigate Risks.
    • Imagining failure is not a sign of lack of faith in the business. It is an effort to understand why things might go wrong (imagining oneself in the future looking backwards), and then planning ways to reduce those risks.
  • Identify and Track Leading Indicators.
    • Leading indicators are behaviors by prospects, trial/free users and paying customers that indicate they are likely to pay or continue paying in the future.
    • Leading indicators are derived from detailed insights into the marketing funnel and sales pipeline along with product usage.


Great Leaders Encourage Healthy Conflict

Successful leaders in business, government or the military talk about the importance of having ‘a kitchen cabinet’ or a ‘team of rivals’.’ That their success and that of the organization was driven by encouraging vigorous debate and productive conflict.

In businesses, the CFO should be the leader of these strategic conversations, as they typically have the broadest visibility into current and likely future business performance.

If I were to ever again take on the CFO role again on a full-time basis, a non-negotiable for me would be partnering with the right type of CEOs. She would need to be someone actively seeking out a true strategic business partner and who encourages them to disagree productively in the desire to optimize the long-term business outcome.

Aditya Dehejia

Adi’s experiences as a CFO and HR leader in start-up companies inspired him to start the CxO Leadership Accelerator. He saw firsthand the challenges in building a satisfying career, the importance of leaders in developing people, and the difficulty in building broad business acumen while excelling in your functional role. Prior to his operating career in start-ups, Adi held roles in a growth capital investment firm and in the corporate development and strategy department at a Fortune 500 company. Adi is an active volunteer mentor in the FirstRound Capital and TechStars networks as well as within his University alumni communities. Adi was born in India and immigrated to the US at age ten. He attended Princeton University (graduated with a degree in Politics) and the Stanford Graduate School of Business. He lives in the suburbs of New York City and has two adult sons and two lovable, crazy dogs.

1 Comment

  1. Beth Herndon on December 11, 2022 at 10:42 pm

    Thanks Adi these suggestions sound like great actions HR leaders as well; good to re-engage on how to make an impact in as a partner to CEO.

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