12 Mar 2020
Prospect of disruption creates crisis in confidence in CFO leadership
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The slow and steady ‘money person’ is no more, but Odgers Berndtson Confidence Index shows why the CFO’s evolution must accelerate more quickly to create confident leaders.
The evolution of the CFO has been underway for quite some time, but the Odgers Berndtson Leadership Confidence Index underlines that it’s a challenge too far for some.
Our research, in association with Harvard Business Review Analytic Services, reveals a remarkable lack of confidence in the C-Suite team, including the CFO, to deliver in the next five years.
In fact, only 30% of the nearly 2000 executives surveyed admit to having confidence that their leadership can do so.
On the CFO specifically, whilst nearly 40% of executives consider the role important in managing change, only 29% consider the current incumbents up to the job.
And it’s a remarkably similar picture across the globe.
Growing challenges of change
One uncomfortable truth for current CFOs highlighted by the Index is that a strong leadership record does not always equate with the capabilities to cope with future change.
CFOs have already seen the tip of this iceberg of change. Financial acumen and accounting competence are now just the start of the long list of what is required for today’s finance director.
For example, they are having to cope with the arrival of AI and big data, with its opportunities and responsibilities, as highlighted in our Champions for Change Report.
In this case, we found a small minority of CFO reported they are actually prepared for AI (11%). The vast majority were not yet up to speed. In fact, nearly half said they were unprepared for this next wave of tech change.
Of course, if CFOs are to successfully champion an organisation’s AI strategy, it will require personal flexibility, foresight, tenacity and curiosity.
These are qualities that might not describe the current incumbents. Critically, to succeed, CFOs will have to focus on talent like never before, attracting specialists with expertise in data science and statistical analysis.
Multiple demands of expanding role
Beyond technological challenges, there are other rising demands facing today’s CFO, as evidenced in our Evolving CFO Report.
For example, there’s the need to be more strategic and operational, to act as a cultural leader, and to be an increasingly public face under ever-tightening governance and public scrutiny.
They will spend more and more of their precious time managing non-finance groups and revenue-generating projects. All this increased operational insight and P&L responsibility, enables a CFO to be a more valuable contributor and a true strategic partner to the CEO.
Those ‘non-financial’ demands are only going to increase, as a change in the environment in which the CFO operates accelerates in pace and deepens in complexity.
Given all this, embracing change is utterly key if a CFO is to manage well through disruption.
Our report emphasizes the need for CFOs to be resilient enough to cope with those increasing pressures from a growing number of stake-holders whilst, at the same time, always being open to change.
Eric Beaudan, Global Head of Odgers Berndtson’s Leadership Practice, puts it precisely, “Today, successful leaders need to have a healthy attitude towards change and this behavior needs to be taught, modeled and practiced throughout the organization until it becomes part of the culture.”
Mindset the key to success
The results of our research projects make clear that amongst successful leaders, an appetite for change is no accident. It is driven by a particular mindset, and that is where companies must focus if they are to retain and develop CFOs that will thrive, despite increasing uncertainty.
This is a major take-out of our Odgers Berndtson Leadership Confidence Index. But it’s not the only one.
Along with the full results of the Index, you can read further insights into how C-Suite leaders like CFOs can succeed.
The full Odgers Berndtson Leadership Confidence Index includes three clear lessons to get on the right foot on leadership and turn low confidence in leadership to a potential competitive advantage driven by the right talent strategy.
The Odgers Berndtson Leadership Confidence Index findings also deal with the following issues:
- Why a leader’s track record is no guarantee of future success
- How leadership is being redefined
- The keys to securing the right talent
- The three clear lessons for today’s boards and C-Suite teams
Odgers Berndtson Leadership Confidence Index
Disruption: overcoming leadership's crisis of confidence.Download report