Many CEOs view their chief financial officer as just the numbers person. But the right CFO can be much more for your organization, and business leaders would be remiss to overlook the broader strategic role that their CFO can and should play. Navigating today’s trying environment puts an even bigger premium on having such a person by your side.
“An effective CFO will make a business better,” says Stephen W. Christian, managing director of Kreischer Miller. “They will contribute in many ways, including managing financial risk, identifying opportunities and serving as a sounding board for the CEO.”
Smart Business spoke with Christian about what to look for in a high-performing CFO.
What defines a high-performing CFO?
A chief financial officer should be a leader within an organization. They utilize good interpersonal skills to effectively work across functional lines with the CEO, HR, IT, sales and operations and pull everything together for the good of the company.
Finance people often have the persona of looking to the past and ‘keeping score,’ but CFOs need to be forward-thinking and solution-oriented. Another characteristic of a high-performing person in this role is that they have a deep knowledge of the business and the industry in which they operate. Intellectual curiosity propels CFOs to question processes and better understand operations. They possess awareness of the business’s critical success factors and respond proactively to operational challenges.
CFOs must have a commitment to learning and constantly bettering themselves. They can accomplish this by networking with peers in industry and trade associations, reading, attending seminars and spending time with the company’s advisers. One of the best ways to learn is to talk to people in your company. Learn from technical staff, engineers, and sales and marketing people.
How has the role of the CFO changed?
Effective CFOs expand the role of the financial recordkeeper responsible for preparing financial statements and tax returns and developing budgets to that of an operations adviser.
They add value by directing strategy, improving profitability, identifying opportunities and alerting all to the financial consequences of actions taken or planned. The position is viewed more as an investment in talent than as overhead.
For growth-oriented companies, CFOs are much more actively involved in merger and acquisition strategies, integration issues and due diligence. In addition, they are viewed as key contributors in the expanding international aspects of a business.