The role of the CFO has significantly evolved in recent years. So, how do we now define the role of a top performing CFO? It is no longer limited to areas such as tax, compliance, risk management and balance sheets. It is far more commercial and success is now heavily reliant on the effective formation of business partnerships. The modern day CFO is key to long term business success, often tasked with making tough decisions on behalf of the business.
From our cross sector experience, we know that CFOs must wear many hats and keep evolving to ensure their businesses remain competitive and profitable. Based on our understanding of this complex and varied role, we have come up with the five qualities that we believe make a truly excellent CFO.
- Financial Foresight and strong leadership
It goes without saying that an effective CFO needs to, as a minimum, have a handle on the numbers. This alone however is not enough. Increasingly, CFOs are a strategic asset, tasked with driving future business growth. Rather than just advising the CEO, the CFO should be regarded as an equal business partner and trusted authority on data-driven action planning.
The CFO has to lead and influence others, drive new company initiatives, and maintain the confidence of their team. They no longer provide risk adverse advice, now a top performing CFO will balance risk and reward.
- Effective collaboration and communication
A modern CFO’s strategic view must prioritise cross-functional collaboration with marketing, sales, HR and customer service. It is critical they connect to their business and communicate effectively with the CEO, COO and CIO to fully understand the brand, the employees, and, of course, the customers. Only by doing this and functioning as one team can the CFO have the context to interpret and understand the financial side of the business.
Strong communication is a vital characteristic for any effective business leader to hold. Presenting information clearly and making complex issues accessible are particularly important for CFOs when dealing with internal and external influences, or when it comes to justifying and explaining difficult decisions such as budget cutbacks.
- Adaptable and willing to learn
Everyone is trying to automate as much as possible these days to be even more efficient, but without knowing all the up to date tech, you will be left behind and outdated. A top performing CFO must adapt to the latest innovations and be tech aware. Utilising these tools to interpret data and provide detailed analysis will allow the business to plan, budget and forecast for the future effectively. Innovations will keep coming and the landscape is ever changing, as such the ability to adapt and to embrace new ideas and approaches is vital.
- A mentor who nurtures talent
CFOs who deliver will always be surrounded by a strong team. They should influence hiring decisions and get directly involved in hiring and developing staff. This is also essential from a strategic perspective when considering succession planning and future proofing the business. Offering strong continuing professional development opportunities and mentoring from senior figures, including the CFO, will not only improve individual and team performance, but also ensure that the top talent is retained.
- Trustworthy and upholds ethical and professional standards
No matter how good a CFO you may be, if you do not have the complete trust of the business owners, you might as well go home. It goes without saying that a modern day CFO’s decision making and practice must be transparent and that they must operate with the highest of regard for professional standards. Building a reputation as a trustworthy and ethical practitioner will, without doubt, gain you respect as a CFO. Board members and owners will always welcome and respect honest advice, even if it is not what they want to hear.
We would love to hear your thoughts on this one. Take a look at our list and let us know if you think any CFO competencies are missing, or which ones you would prioritise for your business?
