The chief financial officer of today is a far cry from the rigid, number crunching executive of old.
No longer a square peg, a great chief financial officer is a rounded leader who can add value beyond the finance function and deliver business results.
Ally and equal to the chief executive
The ability to influence and collaborate with the chief executive is the number one skill for any chief financial officer. They need to have the vision, determination and communication skills to gain buy-in and drive the agenda forward. Nobody is better placed to ensure that strategic decisions are based on a combination of solid financial rationale and business context. The chief executive wants a business partner who can help grow the business, turn financial data into actionable intelligence and identify new potential revenue streams such as new geographies, new markets or potential acquisitions.
Deep commercial roots
The best chief financial officers are naturally curious and take a wide-angled view on what makes a business tick and drives financial performance. They tend to have a broad education, including an MBA, and not all chief financial officers come from the traditional accountancy background. Having a genuine empathy with other functions, and an appreciation of the customer, equips them to provide relevant data and insights, as well as to make prudent decisions on the use of assets and resources.
Strong backbone and soft skills
A great chief financial officer must be a persuasive influencer and an attentive listener. They must display strong values, cultural maturity and adaptability to change. The role requires credibility and engagement both inside and outside the organisation. This involves building strong trusted relationships with investors and opinion leaders, as well as the other members of the c-suite. The chief financial officer must also be tough enough to push back their superiors, to cope with pressure from regulators, investors and the media, and to stand by difficult decisions such as redundancies and cutbacks.
New dog, new tricks
The traditional core skills of the chief financial officer are still important, such as effective cost cutting, cash management, financial controls, reporting and compliance. But an understanding of the commercial context is vital, demonstrating a desire not just to safeguard the company but to promote innovation and stimulate growth.
The best chief financial officers are as focused on outward looking KPIs, like market share as a percentage of market potential, as they are on inward indicators such as EBIT.
Headhunters are placing increasing emphasis on chief financial officers having a penchant for technology. By harnessing cloud-based enterprise resource planning systems, for example, the finance function can be more agile and scalable, and can empower senior management across the business with real-time data they can react to quickly.
Building the team
An essential skill possessed by the greatest chief financial officers is the ability to mentor and nurture talent. While the role is to coach the chief executive and underpin the company’s strategy through financial planning, the chief financial officer should also be a leader who can develop, inspire and mentor his or her own team beneath. Given that the typical tenure of the job is around five years, a focus on succession planning is critical.
The role has evolved beyond recognition. Exit the stereotypical bean counter and enter the three-dimensional chief financial officer, aligned with the entire business and cut from the same cloth as the chief executive. A great chief financial officer who can stand alongside the leadership and have what it takes to transform a company’s fortunes is not easy to find. Gone are the days when swapping the same names around the FTSE 100 would do the job. It’s about time that headhunters changed too.
Stacey Nicholl is a senior consultant at Marlin Hawk, an executive search firm and Leap 100 company.