Their days as number-crunching senior accountants are long gone. Today’s Chief Financial Officers are expected to be strategic thinkers who can deliver business results, according to the findings of a recent survey by Egon Zehnder’s Financial Officer Practice.
The survey, based on interviews with nearly 20 leading CFOs worldwide, reveals that the role is currently undergoing a profound transition. Most CEOs of leading companies seek a CFO who can help them manage the business, complement their skills and offer leadership; on top of their financial expertise.
However, the real challenge facing today’s financial executives is not improving their business expertise but acquiring the professional and personal skills to manage their complex relations with the CEO. Our survey identifies three key competences for successful CFOs.
The ability to influence and collaborate with the CEO emerges as a primary skill for any CFO. To serve as an effective business partner, the CFO needs to be a strong strategic thinker. Experience in business units outside headquarters or the “ivory tower” is often the best way for aspiring CFOs to sharpen their leadership and strategic skills.
To enjoy real influence with the CEO, the CFO also requires credibility both inside and outside the company. This involves building strong relationships with investors and opinion-leaders, as well as the CEO’s other direct reports internally.
Despite this network of close relations, objectivity and independence remain core values for senior financial leaders. CFOs are the guardians of good business practices and controls. It is also their job to troubleshoot and manage the risks inherent in corporate strategies, reveals the study, but guard against the tendency to use their veto power to kill off initiatives just because they are risky.
Achieving the right degree of independence and collaboration is a tough balancing act, report the survey’s participants. This may explain why some of the most successful CFOs have experience in line and staff roles, enabling them to perfect both sets of skills.
The ability to deliver business results is the third key competence for top CFOs. Such leaders have a careful but entrepreneurial approach to risk. They can also talk about business models, rather than financial statements, and support their views with value indicators.
Outstanding CFOs with all of these skills and the right personal chemistry with their CEO have the ability to become his/her right-hand person. Ultimately, such CFOs become agents of change, creating smarter work patterns throughout their organisation with insights that drive performance and help achieve better results. However, only the most talented financial executives can succeed in such a demanding role. It may seem like a daunting task since financial leaders with these capabilities are in short supply. For those companies who want to harness the power of a strong CEO/CFO partnership, developing or finding such talent will be well worth the effort.