If you’re looking to take the next step into a CFO role, then you’re probably wondering if you’ve got the right experience, you’re the right fit and what the key elements are that will help you secure the role. We’ve outlined a number of areas that should help you identify the key attributes you need to succeed as a CFO.
What was important then, is still important now.
Historically, only the candidates with top financial acumen ever became CFOs and this is still as true today, as it was in the past. The main difference today is that on top of being an expert with numbers, modelling and forecasting, you need to have a head for data extrapolation and analysis. With the right tools in place, you can use financial data alongside your business acumen to create a financial hub that is nimble, creative and supports the business as it evolves in an increasingly competitive marketplace. This will simultaneously enable you and your team to plan for the future and react to current events. Having the right tools means that the CFO has to play more of a part in a business’s technology strategy, ensuring that all platforms and technology investments enhance performance, output and long-term cost savings.
Tax changes, geopolitics, inflation and other fluctuations that affect a business’s output and revenue must be planned for and baked into different scenarios, giving you and the business time to react to changes as they arise.
Effective compliance, financial acumen and robust controls are the bread and butter of any finance function and will help you support the business and maintain trust with key stakeholders.
And beyond conventional finance management, a recent survey by Grant Thornton showed that CFOs are taking on tax, ESG risk, cyber security, the correct handling of customer data and navigating AI risk, as part of their expanded remit.
Strategy, strategy, strategy.
So data analytics coupled with financial acumen and increased involvement in business risk have moved from “nice-to-have” attributes, to core requirements of the CFO role.
The next change we are seeing in the role, and one that is set to grow in importance over the next 10 years, is that the CFO must increasingly become a strategic partner across the business.
Aligning long-term business objectives with financial goals will be essential for any business’s survival. The CFO, more than ever, should work closely not only with the CEO, but other C-suite members and the Board, to inform business decisions and future investments. The CFO needs to move away from the role of “gatekeeper” and instead become a strategic partner, collaborating across departments to ensure different business agendas align and, when there is a true business need, be managed and financed.
“My view is that it’s imperative that a CFO has a good relationship with their functional peers, even more so in a low margin environment, where Operations have to be symbiotically linked to Finance. When I’ve looked at areas such as product pricing and promotions, it’s has been key to collaborate with Sales, Marketing and Brand heads to make sure that there is consistency in messaging and strategic direction” CFO – PE backed Retail business
Take your audience with you.
Levelling up to CFO means that you will have to become increasingly adept at translating numbers into strong narratives that explain how and why certain decisions need to be made and the direction the business will take. Storytelling skills are necessary as a function of strong leadership. They enable greater understanding and trust, especially in uncertain times. Not only this, but if you can explain in an engaging way the state of the business, you will more likely be able to get investors and other key players onboard.
So, try and gain exposure to the investing and banking community to enhance your executive presence and broader financial knowledge and practise having candid conversations about tough trade-offs with the board and your trusted internal networks.
To ESG, or not to ESG?
With a backlash to ESG happening in the US and certain developing nations, and Europe doubling down on sustainability targets, there’s a renewed scrutiny around ESG and many are wondering about its future. But this doesn’t mean that it’s going away and, in terms of investment, ESG looks like it’s here to stay, with a predicted global value to hit somewhere between $35 and $50 trillion in ESG assets by 2030. There’s a caveat though: increasing scepticism around performance, sustainability and the targets of ESG funds means that we are seeing a slowdown in investor interest.
For the CFO, ESG targets tailored to long-term business goals, cost savings, risk management and proper reporting and communication should be the bedrock of any ESG strategy and ensure the long-term sustainability of the business.
The next generation of CFOs are rewriting the playbook of what the role entails. They will help drive and shape the strategic direction of the business, set its adoption rate of technology and should understand the business’s place in the world and its impact on employees, partners and investors. A future ready CFO must use actionable insights to flex and react and plan for different scenarios. It’s a dynamic and challenging role but successful CFOs sit at the heart of the business and will accelerate its performance and growth.
At The Siena Partnership, we work with our clients to recruit top finance professionals who can guide their organisations through complex economic challenges. If you’d like to continue the conversation with our finance expert, Jake Bush, contact him here: jake@thesienapartnership.com