The 6 Types of CFOs and How To Find the Right Fit for Your Business

Turnaround CFO: Crisis Manager and Cash Flow Expert

Turnaround companies face existential financial challenges, often carrying more payables than receivables and operating with severely constrained cash flow. The turnaround CFO steps into this difficult situation as both crisis manager and financial architect of recovery.

Critical Skills and Capabilities

“Most organizations in a turnaround situation look for a CFO who can be a business partner with the CEO,” says Abhay Joshi, Boyden Partner, India.

Like a CEO, the CFO must understand all the business’ different functions, such as manufacturing, R&D, innovation, technology—not just finances. “This will help the CFO challenge different functions constructively on costs,” Joshi says.

This archetypal turnaround CFO is a specialist in raising capital—someone skilled at securing emergency funding when traditional sources have dried up. They must convince investors or lenders to provide resources to a struggling company, requiring exceptional credibility and communication skills.

Cash flow analysis becomes critical in turnaround situations. These CFOs typically maintain a tight 13-week cash flow forecast, one of the most difficult reports to maintain accurately. This granular view allows them to anticipate crises and make strategic decisions about which obligations to prioritize.

This CFO must also be masterful in these areas:

• Cost control takes on an aggressive urgency, requiring expense reduction and operational restructuring.
• Debt management skills are essential for renegotiating payment terms and restructuring agreements with creditors who may be losing patience.
• Risk management may extend to understanding how to use bankruptcy strategically to preserve assets while managing liabilities. This requires both technical legal knowledge and strategic judgment about when various tools should be deployed.
• Raising capital in this context means securing rescue funding, potentially including partnerships with private equity firms willing to invest in distressed situations.
• Operational restructuring focuses on right-sizing operations for profitability, making difficult decisions about which business lines to preserve and which to exit.

Leadership Under Pressure

The turnaround CFO role demands a special personality.

Other types of CFOs typically don't have to worry about making payroll while managing worried stakeholder groups—vendors, lenders, employees, and sometimes regulators. In a turnaround situation, missing payroll can trigger a fatal loss of confidence and accelerate organizational collapse.

“A successful turnaround requires exceptional teamwork,” Joshi says. “To generate the necessary respect to build this teamwork, the CFO needs to be a great people person.”

The CFO must acknowledge challenges honestly while articulating a credible path to recovery. Teams need motivation and leadership through uncertainty and difficult decisions. When layoffs or facility closures become necessary, the CFO often plays a central role in these painful choices.

Throughout the crisis, turnaround CFOs must remain calm while developing viable recovery scenarios.

“Maintaining creditor confidence requires transparency balanced with strategic optimism,” Pattillo says. “Panic is contagious, and these leaders help set the tone for the entire organization.”