“In the wake of the financial crisis in 2008, companies had to reevaluate the role of CFOs. In a time of greater uncertainty, the role…”
Written and submitted by Paul Sciglar
In the wake of the financial crisis in 2008, companies had to reevaluate the role of CFOs. In a time of greater uncertainty, the role of CFOs changed dramatically. As many C-suite jobs have evolved rapidly over a short amount of time, the scope of responsibility for finance leadership has expanded greatly.
These days, being solely Controller in Chief is no longer an option. Increasingly, CEOs want to partner with CFOs in ways previously unimaginable. In fact, in a recent survey conducted by KPMG, 63% of CEOs indicated that the role of CFO would increase dramatically over time. CFOs need to be both analytical and collaborative, shrewd leaders and compassionate managers.
Here are 5 traits of strategy-driven CFOs:
- Brutally honest
Honesty and integrity are indispensable qualities of a great leader, regardless of his or her role. Employees need to be able to trust an executive’s ability to communicate a plan of action and execute that plan in an honest and open way.
Most well-performing CFOs have the integrity necessary to carry out their initiatives. CFOs, however, need to be able to hone their communication skills more so than they were previously expected. They must be able to understand, identify, and communicate business drivers, financial risks, and company-wide goals across diverse audiences in a concise, direct manner.
Big data has changed everything. A CFO cannot rely on traditional number crunching alone to survive in the current climate. A strategy-driven CFO will need to be analytics fanatic. Businesses that are stress analytics as a core competency are allowing CFOs to provide insights. They are more readily able to assist in business partnerships.
“The ability to mine, organize, analyze, and act upon data is crucial to the modern CFO,” Jim Johnson, Chief Financial Officer of Adaptive Insights told Forbes. “Technology goes hand in hand with data management. CFOs are taking a leadership role in deploying the technology they need to define and measure performance.”
“The question is no longer whether companies, and specifically members of the C-suite, should collaborate internally as well as externally with customers and suppliers,” suggests ACCA in a recent report regarding CFOs and effective collaboration, “but rather how to collaborate in order to thrive and not just merely survive as a business and as a leader.”
In order to have the most amount of impact possible, CFOs need to be open to expanding their duties. Expanding one’s responsibilities entails more collaboration. CFOs need to lead an initiatives with CEOs as important business partners who understand critical information collated from large datasets.
Adaptability has always been important for every executive. It’s becoming of increasing importance to CFOs who wish to be as insightful as possible in the age of big data. Technology and the tools we use to wield it in a state of constant change.
“Digital savvy is a priority across industry sectors because it offers opportunities for growth—in new markets, through new products and delivery models, or by transforming existing products,” writes Sabine Vollner in her article How a CFO Can Become Great. “Financial leaders who understand how their company can deliver on its digital strategy can coordinate and focus investments accordingly.”
In order to stay as relevant as possible, CFOs will need to be more adaptive than ever. “Two technologies are shaping up to become particularly important for finance leaders to understand,” Vollner points out. “Blockchain, which allows data to be exchanged with the help of a decentralized ledger, could transform corporate reporting. Robotic process automation promises to automate and reduce the cost of back-office processes.”
Strategy-driven CFOS will understand gaps in competencies for the company and understand how to address them. In order to accomplish this, CFOs need to shift a large part of their focus on all aspects of talent: acquisition, management and retention.
Several CFOs lack the people skills necessary to shine as truly great leaders. CFOs are more able to boil down a company’s goals, navigate risk, and carry out initiatives if they understand how to select, mentor, and train quality talent.
Chief Financial Officers are tasked with a great deal these days. Strategy-driven CFOs need to expand their people skills, by being brutally honest, collaborative and talent-minded. They must also strengthen their ability to reason and analyze by becoming driven by analytics and adaptive to new technologies. By actively expanding their comfort zone, CFOs can become much more effective managers, partners, and — most importantly — leaders.
Paul Sciglar is a columnist interested in international policies and economic affairs. Certified Accountant with broad experience in strategic analysis, FP&A, investment banking, and investment management. You may connect with him on Twitter.