Inside the Interim CFO’s Toolbox
Jeff Mullis spent a career as a finance executive, first in the tech industry working for companies such as IBM and Selectron Technologies, then later in the for-profit healthcare arena. It was at a large for-profit health system that Jeff first got a taste of interim work, as one of his key responsibilities was filling in at facilities whose CFOs had left or were on leave. “You start building your toolbox by doing all these interim roles,” he says. He got to the point in his career where he had a financial management tools that could be used in virtually any hospital. Being an interim leader is now his way of life.
In the following interview, Mullis discusses the challenges and rewards of being an interim CFO with WittKieffer principal Adam Burns.
Burns: What is the best part of being an interim CFO?
Mullis: Accomplishment. It is knowing that an organization is better off when you leave than when you took over. When you first walk into the CFO’s office, it’s cold and dark and you turn the lights on and start looking at the income statement, the balance sheet and the audit reports. You start talking to people and you find out that maybe they really don’t have metrics or KPIs to tell them where they’re going. It can be scary for them. There are many hospitals who don’t have a meaningful understanding of their financials—who, for example, don’t even know what the day’s cash on hand is. This is where I’m most helpful. There are a lot of metrics that I can show them so that when I leave, the lights are on.
Burns: As an interim is it hard to establish trust with new colleagues?
Mullis: That’s the nut that you’ve got to crack. It depends on personalities. Some people are inherently trusting and gung ho to work with you. Some people have personalities who question everything and mistrust an interim coming in. In a case like this, I put the ball in their court. I’ll say, “These are some of the things I want to explore with you . . . will you teach me everything you do?” It’s the Socratic method of management—asking questions that builds confidence in people and lets them run the show.
You don’t want to come in and act like a know-it-all. You just listen, especially for the first two weeks on the job. That will help you create trusting relationships with your peers.
Burns: Is it hard for an organization to open its books to an interim CFO?
Mullis: If it means you have to roll up your sleeves and do some extra work, yes there can be extreme pushback. Some people know they’re not doing everything they could be. And, to be honest, some people would rather go to the cafeteria and get two cups of coffee every day than roll up their sleeves and work on their billing denial list. It’s all about management holding people accountable. If you don’t have a good savvy manager who holds people accountable, people are just going to do what they want to do and it makes my job as an interim CFO that much more challenging.
Burns: On that note, what’s the secret of a successful interim engagement?
Mullis: First and foremost, find out who your boss is, who you take direction from, and what it is they want you to accomplish. It’s easy for an interim executive to think they’re going to run their own show. But the CEO or board may not want that. They may not want you to fix everything—they may want you to make sure the bills are being paid and everybody is working well. Whoever you’re working for, do what they want you to do. That’s the key.
Burns: How do you measure ROI for your interim CFO work?
Mullis: I have an Excel spreadsheet that I start the first few weeks that I’m at an assignment. It has 30 to 40 different line items across the gamut of all the different things in a hospital that I need to be doing as a CFO. With it I’m able to track my recommendations, progress and accomplishments. At the end of my engagement, I’m able to go through the spreadsheet with the CEO and board and show them my accomplishments and what still needs to get done. It shows my worth and my value-added. The proof is in the pudding. I give that spreadsheet to the CFO who replaces me, and they can just keep working on the recommendations if they want. It’s a valuable part of my toolbox.
Burns: Do you enjoy working in healthcare as opposed to other industries?
Mullis: Healthcare is the most financially challenging industry that there is. You’ve got bad debt, contractuals, charity care, all the factors in your payor mix, Medicaid, Medicare . . . there are tons of things that you could screw up, and many hospitals are leaving millions of dollars on the table. I enjoy the challenge of being in this environment and helping organizations to overcome the challenges and get back some of that money.