Through my experience recruiting and coaching CFOs across many industries, over twenty-plus years, I’ve noticed a few deviations from the timeworn roles of the CFO in comparison to what is expected of the CFO in Modern times. Recently I spoke at the Financial Executives International (FEI)’s San Francisco Chapter 2013 Annual Dinner meeting regarding the “State of the CFO.” Allow me to share some of my observations.
All CFOs are actors and sales people. Just ask any one of them. They have many faces and roles they play internally and externally to their organizations. Some roles are consistent over time. Others are new and evolving. Additionally, role priority changes over time to accommodate an ever-fluctuating economic climate, shifts in leadership, consumer behavior, product line maturity, or team personnel, among other factors. Today, we see eight recurring themes, or roles, that CFOs are required to play due to the current mix of trends in the United States:
1. The Quarterback: “You’ll have more duties this year…” so it is important to be able to take charge, call the shots, delegate effectively, recruit the best team, and communicate continually. The CFOs of today are asked to be team leaders, with responsibility for throwing the winning plays without letting the weight of that duty bring them to their knees. CEOs are more demanding, as they have more demands placed on them. It’s not just more work…it is effectively meeting the needs of the CEO, the Board of Directors, investors, lenders, society, government, and the general public.
2. The Magician: “Revenue is down…but Profits must go UP!” How many times have CFOs felt the pressure to magically make money appear? CFOs see the practicality of the numbers and are expected to wave their magic wand and fill expectations for profits, EBITDA, and EPS.
3. The Diplomat: “Every department head wants their full budget.” Each budget stakeholder wants something: from the VP with who wants a fully funded budget; the shareholder who wants attractive stock price and dividends; the employee who wants incentives and benefits; the customer who wants price, value, and quality; and the boss who wants performance, promotions, and bonuses. How do CFOs juggle all of these competing wants/needs while maintaining personal integrity, organizational values, and a positive work environment? Here is where the diplomat CFO must intercede and balance the happiness of all.
4. The Financier: “Show me the money!” Despite all the market place challenges, lenders have been tightening up credit requirements, making cash flow harder to find. Vendors and customers alike are tighter on cash flow. On top of everything else, the CFO must ensure their organization’s own adequate cash flow.
5. The Ethics Officer: “Moral Compass, Culture Cop, Values Guru.” The ethics officer is responsible for upholding the morals and values of the company. Frequently this role today falls on the shoulders of the CFO, or at least the CEO with support from the CFO.
6. The Politician: “The CFO speaks for the whole company.” Not only must the CFO juggle the internal needs of their organization, they must now be politicians and serve as spokesperson to the world at large, a role for which many CFOs have not been adequately trained. M&A activity, financing deals, disasters, bankruptcies, executive hires, succession planning, SEC-mandated announcements, and yet-to-be-named circumstances throw CFOs into the limelight. CEOs and Boards want CFOs who can be effective in this role when circumstances demand their participation on the public scene.
7. The Multi-linguist: “Staffing, Financing, Off-shoring…” The CFO of today must be versed in Global languages and cultures to effectively handle the new realities of a global business community. Whether opening operations over-seas, in Latin America, or Quebec, or hiring candidates with multi-national experience, or floating debt in a foreign market, CFOs are asked to be aware and functional in multiple languages and customs.
8. The Athlete: “Track shoes on!” It’s a competitive market out there, and CFOs today must be able to run the distance and come out ahead. Whether competing for their own jobs or helping their companies to compete CFOs have more competition for scarcer resources today. Generational, global, political, and economic trends are all aligning to create a more competitive business environment than ever before. CFOs need to do whatever it takes to stay mentally, physically, and emotionally fit.
The CFO must effectively play more roles today and be constantly vigilant for what changes are coming, and be able to measure their own performance. CFOs need to be self-aware, set priorities, and know which roles to play at any one time. Which roles do you play best? Worst? How can you increase your strengths while mitigating your weaknesses? How can you expand your repertoire of CFO skills?
These trends in CFO roles reward professionals who today have strong technical and social education, training, and competencies. Contact me for more information on how successful CFOs today build those skills. Meanwhile, best wishes for continued success in your CFO career!
2 thoughts on “The Role of the Modern CFO: A Recruiter’s View”
In 20 plus years in the CFO chair, I have played a version of these roles in all of them. CFOs do make “great magic”!