As the role of the chief financial officer has expanded, it’s become more important for executives to not only know the number side of a business or organization, but to be able to explain it to a wide variety of people.
“It’s almost like the CFO has become the new chief operating officer,” said Toronto-based Ross Woledge, the CFO and senior financial officer leader at Odgers Berndtson, a placement and talent-management firm. “Traditionally, the finance role was about reporting the numbers. Now it’s about telling the story behind the numbers.”
CFOs often take on public-facing roles these days and need to deal with everyone from investors to department heads. And that means they have to be able to speak effectively and have strong presentation skills.
Toronto-based Gord Nelson, CFO of Cineplex Entertainment, can attest to that. A chartered accountant, he joined the finance team at Cineplex Entertainment in 1988 has been the CFO for the past 11 years.
During that time, he’s seen his role grow into a more outward-facing one, particularly as more and more information about the company’s operations — call transcripts, recordings, PowerPoint presentations, financial filings, copious meeting notes neatly typed out on tablets — have become publicly available.
That influx of information means questions have become a lot more pointed and detailed, and can really put a CFO on the spot.
“There’s just such a record of communication that it’s really a critical skill to have,” Nelson said.
Nelson and Toronto-based Pat Marshall, Cineplex’s VP of communications and investor relations, often address rooms of anywhere between 50 and 400 people as part of their investor conference and roadshow activities.
Five years ago, Nelson said, he would have done a 20-minute canned presentation and taken 10 minutes of questions. “Now the canned presentation never happens,” he said.
Today, there’s a 30-minute presentation, followed by a fireside chat, then a Q&A with the audience, then 45-minute one-on-one breakout meetings with investors and potential investors.
Answering questions directly and openly without accidentally disclosing something that shouldn’t be discussed will remain a balancing act as CFOs’ jobs become increasingly external.
At Cineplex, Nelson and Marshall said, the investor relations and corporate communications teams work to support the CFO.
“We’re able to spread communications needs over a broader group and more narrowly define the responses based on who’s asking,” Marshall said.
Strategizing in a digital world
Strategy, communication and the CFO’s office go hand-in-hand as more companies stare down the barrel of digital disruption.
In this sense, strategy relies heavily on the deployment of capital — what projects will a firm invest in to better compete with newer, more agile competitors.
This digital agenda is the most frequent topic of conversation among CFOs, said Kevin McKenzie, a partner and the business development leader for Ernst and Young.
“Everyone is trying to understand what it means for their business — the level of disruption about to take place,” said Toronto-based McKenzie.
“Nobody wants to get Ubered,” he said, noting technology, the sharing economy and the climate of disruption can pose a threat.
For example, at Cineplex, the company, known for its silver screens, has diversified well beyond movie theatres into a network of digital businesses including electronic signage and e-sports.
Cineplex’s CFO Nelson said it’s all a matter of perspective.
“It’s really looking at disruption as an opportunity rather than a negative,” Nelson said. “You need to adopt offensive and defensive strategies… We have a five-to-10-year view of the world.”
But the yin to any strategic capital deployment’s yang is, of course, measuring the success of that deployment.
Ernst and Young’s McKenzie said that in the past, measuring a strategy’s success largely meant calculating the return on investment. However, more nuanced metrics, such as customer experience and retention, are becoming just as important.
These changes, too, are heaped onto the CFO’s plate — and with reason, said Odgers Berndtson’s Woledge.
“If you think about any big change in an organization, the CFO’s really at the centre of it,” he said. “The CFO has the best view on the business, end-to-end. They can see issues, trends far more clearly or quickly than perhaps others.”
So how do CFOs balance their reporting duties with their new responsibilities, without burning the candle at both ends?
Part of the answer is to hire a strong team under the CFO. Woledge said developing junior financial officers not only helps redistribute the weight of the CFO’s growing portfolio, but it also lines up potential successors to the throne.
Another critical part is giving CFOs on-the-job training to update their skills. That’s why Odgers Berndtson partnered with the University of Toronto’s Rotman School of Management last year to create a program aimed at financial executives.
Michele Milan, the CEO of Rotman Executive Programs, said the week-long summer course, largely developed by former Rotman dean Hugh Arnold, touches on presentation skills, the principles of persuasion, managing a multitude of relationships and learning how to tell a good story with emotional intelligence.
As a recruiter, Woledge has seen firsthand the wish list of desirable qualities firms seek in CFOs and the competition for qualified candidates with those skills.
“You can be the smartest person in the room, but if you can’t bring people around to your perspective, you’re going to fail,” Woledge said.
This article was originally published by the Tracey Lindeman in the Financial Post on Dec. 1, 2015.
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