Companies with well-established CFO roles and those hiring a CFO for the first time are on more even playing fields than one might think. That’s because CFO priorities and characteristics have evolved and continue to evolve. Several major consulting firms have recently studied this paradox. We wanted to bring you their takeaways as you consider your next (or first) CFO hire.
A Great CFO Champion Growth & Digital Transformation
Gartner asserts that world-class CFOs focus on five critical leadership areas. The first is what the firm calls ‘capital activism,’ or the strategic ability to shift capital to new areas quickly. “Capital activism improves capital responsiveness by actively challenging attachments to legacy investments, siloed value creation and other outdated practices that impede meaningful capital pivots,” the study authors write.
Then there’s interpersonal communication, which Gartner found was lacking among many CFOs. If you find a candidate who can shine interpersonally with individual board members, customers (a personally effective CFO spends 40% more time with customers than an average CFO), other business leaders, and direct reports, think twice before passing them up.
In its white paper, The DNA of Future CFOs, Billtrust reports similar findings, adding that “Accounting and finance skills, in particular, remain a requirement. However, there is a growing new emphasis on people skills.”
A strategic understanding of autonomous finance technology is next. Autonomous finance incorporates artificial intelligence (AI), machine learning, and other technology into front- and back-office operations. Adopting these technologies requires a significant shift in mindset and digital transformation, but it’s coming (or is here) for businesses of all sizes. “Failure to adopt these technologies is delaying organizations’ ability to move information swiftly and insulate the business from shocks such as inflation, global conflicts and pandemics,” says Gartner.
Deloitte agrees, asserting that “CFOs may need to assume the role of technologist, working with IT and helping C-suite leaders make informed decisions on whether or how to integrate AI into workflows.”
Data literacy plays a massive role in this area. As Billtrust reports, “There’s enormous value in data analytics, and being able to access data quickly, view the proper metrics, construct the right models, and streamline or eliminate manual processes renders the organization more efficient.”
As digital transformation takes hold, it threatens employee trust and confidence if not handled with care. That’s why Gartner adds soft skills in adaptivity, empathy, and authenticity, coupled with the ability to communicate effectively (discussed above), are necessary qualities for a CFO moving forward.
Finally, as Billtrust reveals, a “horizontal mindset” is vital. Just as great CFOs can communicate effectively with various stakeholders, so, too, are they being asked to collaborate with business units beyond their own. For instance, as Gartner states, “Organizations that have a strong CFO-CIO partnership are 18% more likely to achieve intended business outcomes and 37% more likely to keep digital spending in line with the budget,” Gartner points out.
The skillset of a great CFO has always been multifaceted, yet more than ever, today’s top financial leaders are strategic partners, adept communicators, and technology champions. Prioritize these qualities in your CFO search to best position your organization for success.
