For senior finance leaders it’s no surprise that the role of the CFO continues to evolve. In today’s business environment, much more is expected of a CFO, with responsibilities now extending beyond the traditional finance arena. CFOs are business partners to the CEO, and can be the change management leader for their organization. To be successful, top CFOs have some key leadership traits that differentiate them from their peers.
Trends
Here are some of the uniting similarities among top finance leaders:
A) They are more open to change and can deal effectively with ambiguity.
B) Successful CFOs are good at building business partnerships with key internal and external stakeholders, as well as the media.
C) They are driven when it comes to improving the organization’s bottom line and growing the business.
D) They are motivated to find innovative solutions to complex business problems.
Capabilities that Create Greatness
CFOs bridge the gap between strategy and execution. The best ones have strong leadership and business acumen, diverse experience and are effective at stakeholder engagement.
In an article entitled “The DNA of the CFO,” top CFOs felt that their company’s perception of them as a business partner was measured by, “the extent to which business managers consulted them for advice on key aspects of strategy.” Leading CFOs, according to the same article, see themselves as more than an information provider. To the best CFOs, their commercial understanding and analytical skills means that their role plays a vital part in “understanding how different decisions will lead to certain outcomes.”
With CFOs increasingly becoming the face of the business, the need for strong communication skills is critical. According to a study conducted by the authors of “The DNA of the CFO” less than half of their respondents (the study interviewed 669 CFOs) felt that their relationship with investors was good or excellent, and 25% offered a similar assessment for their relationship with the media. Top CFOs have an ability to gain buy-in and increase trust in the financial health of their business. After all, those same CFOs that were interviewed pointed to communication and influencing as the most important areas for improvement in their skill set.
Resource: To read the whole article “The DNA of the CFO” click here.
Developing Skills
For those wanting to be a CFO, certain strategies can help pave the way to becoming a top finance leader.
- To grow strong leadership skills and develop business acumen, getting an MBA, or participating in a leadership development program are good choices, as is an early involvement in the organization’s decision-making process.
- To create a foundation of diverse experience, gain exposure to different areas of the business. Work cross-functionally, or take a leadership role in a change management initiative.
- To improve stakeholder management skills, look for opportunities to hone your communication skills and political networking ability with the Board, investors and analysts.
According to the 669 CFOs interviewed in “The DNA of the CFO,” here are the top 5 skills that are present in a great CFO:
- Extremely good finance professional
- Strong commercial sensibility
- Deep understanding of the business
- Good with people and able to communicate complex issues in an accessible way
- Able to think strategically
Resource: Wanting to become a CFO? Read “How to Act Like a CFO Before You Are One.”
Key Takeaways
CFOs today, while still budget or control-oriented, are true business partners and change management leaders. The best ones are the bridge between strategy and execution. Strong CFOs have exceptional stakeholder management skills, a broad base of experience to draw upon and have impressive leadership and business acumen. With a business profile more similar to that of an entrepreneurial CEO or business development executive, great CFOs have a unique optic on the business and embrace their increasingly strategic role.
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