September 2025 Newsletter
Burning Questions from the C-Suite
From a CEO: I Don't Trust The Data From My Right Hand
Year-end is almost upon us—or as I call it, the season of financial surprises. That lovely time of year when accounting statements don’t match what was predicted by operational metrics.
Financial surprises are frustrating for both CEO and Right Hand. The RH is doing great things with people and processes and diligently tracking important numbers, so why are there still surprises? What are you both missing? You trust your Right Hand’s integrity but sometimes you don’t trust their numbers. Ouch.
Tracking, interpreting, and sharing numbers is a big deal in any RH relationship. Here are four suggestions for making RH reporting more reliable.
Focus on interpretation not data. Often as CEOs, we interpret data in our heads rather than sharing our thoughts with the RH. However, interpretation is the point. So let your RH see behind the curtain as you think through implications and invite them to interpret in front of you. Ask what the data indicates about the business. Use questions like: If this number was lower, what would that indicate about our operation? What department has the most effect on this number and why? How are these two numbers related to each other? Why do we track this number on this frequency? Teach the RH to connect data to decision-making in your specific context.
Add a financial statement review. In most businesses, operational metrics get tons of airtime while financial statements are either invisible or discussed only once a year when the boss awards bonuses or rants about shortfalls. Consider adding a monthly or quarterly financial review. Bring in your RH, the finance lead, and possibly the whole leadership team. Have the finance lead present financial statements and the team ask questions. Let the money person answer whenever possible. That will help both sides learn. You be there to discover what leaders know and don’t know, ensure the conversation stays on track, and correct any misinformation. This review should normalize using financial statements rather than just operational metrics to assess the business. It also helps RHs understand accounting adjustments like revenue recognition that affect the bottom line.
Use an internal “board” meeting to bring the RH into your world. Two to four times a year, hold a meeting with just the CEO and RH in attendance. Each of you prepare and present a formal report on your areas of responsibility as if you were speaking to a Board. CEO might talk about strategy, cash flow, return on equity, M&A, capital investment, EBITDA. RH might talk about revenue, costs, profits, culture, processes. Share performance data, explain how you’ve met or fallen short of goals, and commit to future actions. Don’t interrupt each other, and at the end of each presentation, ask the other person questions just like a Board would. CEOs and RHs have told me this process helps RH understand what CEOs worry about. It also surfaces disconnects. Maybe the RH thinks the numbers are better than the CEO does. Perhaps one of you is tracking year-to-date performance and the other is making year-over-year comparisons. Or a critical data point is missing. Or a too-positive trend is suspicious. That stuff will come out in the meeting.
Make gaining financial knowledge part of the job description. Too often we hope Right Hands “pick it up” by osmosis, or we assume they already know, but that leaves everybody exposed. Instead, make improving financial knowledge a formal expectation of the role. Tie it to performance reviews and compensation. Have the RH join your meetings with CPAs or bankers or investors. Pay for classes or books. Connect them with board members or accounting staff for mentoring. Enroll them in a peer group. Have them present the money report in the all-hands meeting. You want a steady progression that eventually lets them own the numbers for themselves.
When you can’t trust a RH’s numbers, it’s usually not because the RH is dishonest or sloppy. It’s because they look through a narrower lens than you. For example, RHs often manage costs or revenue, not both. Or they run a few departments rather than the whole company. They might own the P&L but never see the balance sheet. Help them expand their field of vision and you gain a true brain-partner who can deliver wins that make it all the way through to the financial statements.
Famous Right Hands
The day has finally come: Warren Buffett is stepping down as CEO of Berkshire Hathaway. Buffett announced in May that Greg Abel will take over as CEO in January 2026 and Buffett will become Executive Chairman.
I wonder if Buffett feels nervous about stepping away and having his Right Hand take over his legacy. Most CEOs do. Abel has been in a RH role at Berkshire for over two decades—not THE Right Hand role because that was occupied by Charlie Munger, but still a key Right Hand role. At recent shareholder meetings, Buffett said Abel is fully prepared for the responsibilities ahead, calling him a “natural” and stressing that his instincts for business and capital allocation are already well proven.
Abel’s work ethic and modest approach complement Buffett’s folksy style. And Abel has said he’s committed to Berkshire’s decentralized model, which Buffett has long viewed as essential to the company’s strength. There’s every reason to believe this transition will work.
But still . . . it’s never easy.
News
Heather is headed to Michigan on October 28ᵗʰ to teach Right Hand Relationships to EO Detroit members. It’s a return to her roots, since she was an EO member back in the day. Long ago, EO (Entrepreneurs Organization) was called YEO (Young Entrepreneurs Organization) and, we were all so very young. While you no longer have to be under 40 to be in EO, you still have to be running a growing multi-million dollar business, and you still have to be hungry to learn. Thanks to Matt Loria, CEO of Auxiom for the referral and to Jason Brown and Carrie Schochet for the invitation. If you need to outsmart IT chaos, Matt’s your guy.
In other news, Heather and her hubby finally went on their dream vacation castle-hunting in Germany. Kelly explored endless medieval structures with armor and torture chambers and potty holes that hang off the sides of tall towers, and Heather practiced her rusty college German and ate good food. We were celebrating 37 years of marriage!
What can we do for you?
At Practical PhD, we help companies Get the Right Hand Right so they're ready for top leadership transition in 1-3 years:
Find and hire a Right Hand
Onboard a new Right Hand
Teach an aspiring Right Hand the job
Performance-manage a struggling Right Hand
Create a phased leadership succession plan