A recent study conducted by Odgers Berndtson on the changing role of the CFO in Canada revealed that in today’s dynamic business environment much is expected of the CFO, going far beyond traditional finance skills. Today’s successful CFOs play a unique role as partner to the CEO, as a business influencer with the leadership team, and often as a change leader for the organization. In short, CFOs have evolved from good to great
What's different about the profile of today's CFO?
We worked with Hogan Assessment Systems to review the psychometric profiles of close to 300 top CFOs and Finance Executives in Canada, the Unites States, Asia and Europe. We looked at personality tendencies, stress-related risks, and personal motives and values.
We found two trends that surprised us about today’s CFOs:
- Their profiles are more similar to that of business development executives or entrepreneurial CEOs than to that of budget- or control-oriented individuals. They are more flexible and open to change, and able to deal with ambiguity without getting flustered.
- They are more highly adept at building (and maintaining) relationships than we might think,including relationships with the CEO, Board of Directors and external stakeholders such as investors and analysts.
How do CFOs compare to other leaders?
When we compared these results to the profiles of all top executives, we found that finance executives have a strong need to improve performance and learn about the business. They are about the same as other executives when it comes to achievement orientation, but they stand out for their inner drive to improve the organization’s bottom line and grow the business. They will stay up at night worrying about the coming quarter or what can be done to increase productivity. Equally important, they have an appetite to find innovative solutions to complex business problems.
What can high potential finance leaders do to develop these leadership capabilities?
Today’s CFOs must be able to bridge the gap between strategy, execution and finding new sources of value for the organization. This requires three key capabilities:
- Strong leadership and business acumen: This can be developed through an MBA or leadership development program, but can also stem from early involvement into the company’s decision-making process.
- Broad and diverse experience: Finance leaders need exposure to different parts of the business. Leading change management initiatives or working in other functional areas can provide a rich development experience.
- Effective stakeholder engagement: This comes from exposure to the Board and its committees, investors, analysts and the media. Finance executives need to ask for these opportunities so they can hone their communication and political skills.
Highlights from the Odgers Berndtson CFO Survey
- The average CFO tenure is 4.8 years when appointed externally, versus 6 years for internal appointments.
- In 2014, only 24% of CFOs had an MBA/master’s degree, down from 32% in 2004.
- 22% of CEOs have served in an executive position within finance.
- Only 7% of CFOs at the top 100 Canadian companies are women.
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By Paul Butterworth MNI, Global Head of the Maritime & Shipping Practice at Odgers Berndtson