According to a recent article at CFO.com, there isn’t much overlap.
In a blog I wrote a while back about effective CEOs, critical traits included: decisiveness, willingness to collaborate, being a doer, setting realistic expectations, insightfulness, innovative thinking and courage, among others.
While those are outstanding traits for any senior executive, what else specifically – other than hopefully having an affinity for math and knowledge of accounting – does it take to be a successful CFO?
- Good communications skills. It’s one thing to know a company’s financials inside and out, but another thing altogether to use that data to tell a compelling story. It’s also crucial that CFOs appreciate the importance of clear and concise messaging to internal audiences to help key stakeholders understand the meaning behind the data.
- Ability to analyze. Today, the amount of data generated is astronomical, but at face value likely doesn’t tell us much. A good CFO will be able to turn that data into actionable ideas that help move a company forward.
- Love (or at least like) of technology. Is this really important if you’re not the head technology honcho? Absolutely yes. CFOs hold responsibility for financial reporting, so understanding and choosing the right tech partner is paramount. It is also likely that CFOs will be asked to put their rubber stamps on technology that may not directly impact financial reporting but could impact other parts of the company … often significantly if that technology doesn’t work as expected.
- Risk appreciation. The business environment has changed considerably since the start of the COVID-19 pandemic, and it continues to change every day for a number of reasons. Good CFOs will assess risk/reward profiles before making decisions, whether financial or otherwise.
- A world view outside of finance.While CFOs have a wide range of duties and expectations related to a company’s financials, the best CFOs have knowledge and opinions outside that narrow view, including being aware of the global environment and a company’s role within it.
- Capacity to strategize and collaborate. It is readily apparent to me based on almost 30 years of working with executive teams, that the best CFOs partner with their CEOs to help achieve their company’s objectives. The old adage, “No man is an island” rings true.
- Attention to social issues. ESG has become an increasingly important topic, particularly for publicly traded companies and the planet. CFOs need to understand how their companies operate within a greater construct. A company’s impact on the environment, for example, could have ramifications for that company’s ability to attract talent, customers and investors, not to mention the impact to the globe.
Robert Half, a leading provider of specialized talent solutions and business consulting, noted similar traits in its recent article, “How to Become a CFO: 5 Steps to Guide Your Career Path.”
Essentially the same advice comes from the MIT Sloan School of Business CFO Summit Chair and CFO Leadership Council founder, Jack McCullough, who says that “A great CFO is a rockstar CFO.”
Gartner has some good advice as well. The research firm surveyed more than 100 CFOs around the world and found that great CFOs are customer-oriented, build constructive conversations with the CEO and board, apply financial leadership principles to time management, and are closely involved with the business.
Are there other important traits for effective CFOs not covered here? Let us know if you can think of any.
Laurie Berman, firstname.lastname@example.org