THE NEW CFO: FROM SUPPORT TO STRATEGIC PARTNER

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Author

Lesia Bates

Founder/CEO

Bates Consulting Group LLC

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The contemporary role of a Chief Financial Officer (CFO) has seen a significant transformation in comparison to what it was in the past. In the early days, the primary responsibilities of the CFO were primarily tied to record-keeping, ensuring financial reports were delivered on time, and maintaining strict compliance with financial regulations. However, the dynamics of the role have changed over time. The CFO has evolved to become the strategic partner of the CEO, taking on responsibilities that extend far beyond just keeping the books. She/he is crucial in operational decision-making and play a pivotal role in shaping the company's strategy. They are tasked with communicating important results to a diverse range of stakeholders. Essentially, the CFO of today plays a pivotal role in steering the direction of the organization.

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Finding someone who is the right fit for the CFO role in your organization can be quite a complex task. It is not only about finding someone with the traditional skills but also about finding someone who can think creatively and has a strategic outlook. This process involves crafting a detailed and enticing job description that will attract such candidates. Ideal candidates will be those who can think outside the box, are well-versed in best practices, have broad industry and functional experience, and can seamlessly blend into your organization's leadership team. They should be able to work efficiently with the staff and contribute to creating more value for the organization.

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In my position as a management consultant, I provide part-time CFO and finance strategy services to a variety of organizations, both non-profit and for-profit. Over time, I've observed that some executive teams and boards do not fully realize the importance of the CFO as a strategic partner to the CEO. Further, it is also important to acknowledge that not all CFOs possess the necessary skills required to manage the increasing complexity of the business world today. They need to be capable of offering insightful analytics, spearheading business and digital transformation initiatives, and actively participating in the strategic planning process.

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While having basic finance skills is undoubtedly important, a strategic CFO needs to possess a comprehensive skill set that goes beyond just finance and accounting.
This includes five key areas:​ 1) leadership; 2) strategy; 3) operations; 4) controls, and 5) technology. To further elaborate, I've outlined some core skills, capabilities, and qualifications that should be kept in mind when you're in the process of hiring your
next CFO.

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Leadership: Leadership skills are at the top of the list. Your CFO should not just be an expert in dealing with numbers; they need to have the ability to inspire and motivate their team, introduce innovative strategies, and possess the confidence to make tough decisions when needed.

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Strategy: An efficient CFO doesn’t just deal with finances; they are deeply involved in setting the strategic direction of the organization. They need to understand the bigger picture, be able to identify opportunities for growth, and help in navigating potential risks.

 

Operations: A CFO's role also extends to understanding the operational side of the business. They need to know the functioning of each department and how they all interconnect. This knowledge helps them identify potential efficiencies and streamline processes.

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Controls: A traditional aspect of a CFO's role involves ensuring that financial controls are in place. They need to supervise the financial reporting process, ensure compliance with regulations, and minimize risk.

 

Technology: In today's technologically driven world, being tech-savvy is a must for a CFO. They should be comfortable using advanced financial software and tools, and must stay updated with the latest tech trends that could benefit the organization.

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Therefore, when you're on the hunt for your next CFO, don't just settle for someone who is good at crunching numbers. Look for a versatile, strategic thinker who can navigate through the complexities of today's business world and help steer your organization towards success.