Is your chief financial officer (CFO) up to standard? Are they achieving, or are they lagging behind?
These are the five signs that it’s time to rethink the CFO role in your business:
1. They aren’t a leader
Once, CFOs were able to work from behind their desk. Now, their job has changed. The modern CFO needs to be a leader. They need to be able to influence others and push initiatives. They need to ensure projects throughout the business are aligned with one another, the overall strategy and, of course, the company finances.
They should project authority to both internal and external stakeholders, and should be considered an equal business partner in all things strategic as well as financial. The background is no place for a great CFO.
2. They are under-experienced
It is rare that you will find a great CFO that isn’t educated at a high level; whether that’s a bachelor’s degree in accounting or finance or, more likely, a masters in business administration. But the mistake that many CFOs make is assuming that this university education is all they need. The reality is quite different.
The mistake that many CFOs make is assuming that this university education is all they need.
A great CFO needs to understand your company thoroughly, and be experienced outside of academia as well. From their experience across the course of their career, a CFO should know your company and your industry from top to bottom: from customer needs to competitor strategies, right down to back-office operations. Without that holistic experience, you can’t expect your CFO to be able to provide a practical strategy when it comes to crunch time.
3. They lack soft skills
CFOs need to be able to communicate effectively with all influencers within and without the business, drawing on all the sources of information available to them: from hard data and reports right through to conversations with stakeholders. To do that, they need the oft-forgotten soft skills that all C-level executives are now expected to have.
The job is no longer a case of hiding in an office, cranking out reports, analytics, and estimates. Collaborative working environments are now absolutely necessary to provide insights that are not just financially and strategically sound, but also practical and actionable. It’s hard to walk the walk if you can’t talk the talk, in other words.
4. They aren’t agile
Adaptability doesn’t become a less valuable trait once you become a C-level executive. In a business world defined by constant change, evolution on a professional level is key to being a great CFO.
Today’s CFO role has expanded to include being involved with issues such as cybersecurity and social media.
Adaptability doesn’t become a less valuable trait once you become a C-level executive.
That includes being on top of the latest technological trends (such as data dashboards), as well as being able to adjust strategy in order to incorporate new data. Outside of the technological angle, they should also be up-to-date with the latest threats and risk management methods that will help keep your business protected. Without this agility, your CFO won’t be able to keep your business pointed towards the future.
5. They aren’t a mentor
A good CFO will act as a mentor. They will work to develop the skills of the talent you already have, as well as assist in seeking out those who can offer strong skills to your business. This puts the right staffing infrastructure in place for development across the board.
However, a great CFO doesn’t limit their mentoring to those immediately below them either. They should be active in disseminating their experience at all levels, particularly with other C-level executives, ensuring that everybody is at the level they need to be at and are committed to the company’s success. Numbers are the language of business and everyone needs to be able to speak it.
The key differences between a weak and a strong CFO are:
- holistic experience,
- soft skills,
- agility, and,
A CFO can’t do their job effectively stuck behind their desk. They need to be actively teaching, learning, talking and growing; without that desire for upward trajectory for both themselves and your business, they won’t truly succeed.