03 ago 2021
On track to CFO: Take yourself off autopilot and stand out
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It’s time for aspiring top finance talent to take control, take risks and develop leadership capabilities.
Sometime since the turn of the 21st century, the role of the CFO morphed from back-office number cruncher to modern-day powerbroker. Gone are the days of the lonely accountant, kept isolated from the rest of the company. Today, the world's most successful CFOs are innovators who command a room and are sounding boards for the CEO.
For aspiring CFOs, this raises the question:
Am I on track to becoming a strategic 21st century CFO?
Drawing on the extensive insights of our CFO specialists across the Odgers Berndtson global network, as well as our experience developing the CFO Leadership Program at the University of Toronto, we explore this very question and take a comprehensive look into the everchanging role and leadership capabilities of the future CFO around the world.
As Ross Woledge, Partner and Head of the CFO Practice Odgers Berndtson Canada, points out:
"CFOs are arguably held to a higher standard than anyone in the company. It is a privileged position given the visibility across the entire eco-system of the business."
"It is becoming increasingly challenging as the scope of the CFO continues to evolve and expand to oversee other functional areas and be pulled in so many different directions. If it sounds like an enormous responsibility, that’s because it is, so having a strong team underneath is imperative in today’s world.”
So, what’s driving the evolution of the CFO role?
The expectations and demands on a CFO have never been greater, observes Tom van Rooyen, Partner, CFO Practice at Odgers Berndtson in London. “Look at any candidate brief and it may as well ask for a unicorn.
The reality is that you need to be all things to all people: of course, technically aware but also strategic, operationally savvy, forward-looking and an inspirational leader.
You also need to influence a broad group of stakeholders, both internally and externally and have the complete trust of your shareholders. The reality of a strategic 21st century CFO is that you are, in most organisations, the most critical executive after the CEO.”
While leading searches, we are consistently met with clients’ increasing expectations for CFOs to take on more responsibility outside of finance. Ross also adds, “Data and AI has been a hot topic in the boardroom and C-Suite, and having an ESG strategy (Environmental, Social, Governance) is becoming a top priority – both are issues that CFOs are being called upon to play a leadership role in addressing.”
CFO as tech and data champion? Yes.
Phil McCann, Odgers Berndtson Partner and Head of the APAC CFO and Financial Management Practice, agrees. “The role has changed quite distinctly in the last ten years.
Our clients now demand CFOs with a good understanding of AI, digital and data analytics. Just about every client is going through a significant financial and technological transformation.
Data-driven performance improvement initiatives, particularly at an asset level, are assisting the CFO to see through the figures and recognize business opportunities, including digitization and AI."
The challenge is finding someone with the strategic acumen to be a thought partner to the CEO to lead on these key issues, while also being capable of executing the more financial elements of the role flawlessly. The CEO often expects the CFO to be on the same side of the table, pushing the business, and to do that you need to be commercially astute as well as have the business partnering skills to be seen as credible. Read more on the critical relationship between the CEO and CFO.
In order to do all of this,
What steps should top finance talent be taking on the road to CFO?
In every role leading up to the CFO position, contenders should always retain a keen focus on driving superior financial results, since the ‘best CFOs’ have a track record of expanding the company’s market cap during their tenures. Top CFOs are strong team leaders who always prioritize the development of future financial leaders on their teams. Companies that are seen as ‘finance academies’ have a surplus of talent and more choice when seeking to fill openings in their ranks.
“When finance executives think about career progression, focus on assignments and projects that diversify their experience, including outside their own company or industry. This broadening of their experience allows executives to stand out in the crowd,” advises Russell Boyle, Co-Head of Financial Officers Practice in New York.
“Never stop looking for ways to improve results, build stronger teams, and provide greater support to the businesses and functions across the company. Being seen as a ‘change agent’ will only enhance the executive’s image as a top CFO prospect.”
Breadth is key. The role of a CFO is so broad now that you can’t afford to pigeonhole yourself early in your career, so invest time in different roles.
We’re often asked the question, which position is better suited: a Group Financial Controller or a Divisional Finance Director? The answer is both.
See different businesses – small, large; growth, turnaround; global, local. Challenge yourself in these different environments. Variety of experience is critical and allows you to be more relevant in the future to more people. If its possible, gain international experience or take on operational side projects; this shows initiative and makes for a better-prepared potential CFO.
You also need to think about what is going to be relevant for business in the future. Think digital, automation and ESG. CFOs don’t just do traditional finance; you must be able to contribute across the entire business agenda.
How to stand out as a CFO candidate?
CFOs who stand out in the market act and behave as a true business partner with the CEO, points out Russell, become even more invaluable to the CEO as a leading advisor or confidant, if not the top advisor. Top CFOs have taken steps in their careers to expand and diversify their experience, producing evidence of their ability to assume bigger, more complex roles.
For an aspiring CFO, the capability to be strategic, future-focused and to identify value creating opportunities is key.
In fact, Phil comments, “we are finding a huge demand for experienced corporate development executives, typically with an early career in investment banking who can identify, structure and implement not only strategic acquisitions but partnerships, alliances and joint ventures to propel company growth. The corporate development executive would usually report to the CFO, but it is now more common to expect those qualities to be part of a CFO’s skills set.”
Being a strategic thought partner is often seen as one of the key competencies that CEOs seek in their CFO partner. Just thinking strategic thoughts is not sufficient, however.
Every aspect of the CFO’s accountabilities should be fully integrated with a never-ending focus on the company’s long-terms goals, near and medium-term tactics and investments, and meeting current budgets and requirements.
It will come as no surprise that proven CFOs with this ideal overall profile aspire to become general managers and business leaders, including CEOs. Boards, CEOs and shareholders often view top CFOs as potential successors for key leadership roles, but CFOs will only get those opportunities if they succeed as high impact finance and business leaders and true business partners with CEOs, who play a key role in developing them as successors.
The key to success however is authenticity and adaptability. The ambitious CFOs who have effectively demonstrated these traits are the ones who are empowered by change, see the opportunities in chaos and carry their reputation successfully, no matter what.
To discuss your next move and career opportunities, please don’t hesitate to get in touch.