The tone at the top of a company sets the precedent for employees at every level of the organization. What message does your chief financial officer send to colleagues in the C-level suite or to workers on the ground level who are the core of the operation?
Employees respect a strong, communicative leader who takes time to understand every aspect of the organization. Ultimately, their willingness to perform and drive growth depends on this respect and the message they receive from leaders, such as the CFO.
“The CFO plays such a critical role in the future success of any company that the individual really must learn and contribute to the organization on a broader level than, ‘Here are the numbers,’” says John O. Heck, director of Audit and Accounting at Kreischer Miller in Horsham, Pa.
A high-performing CFO is far more than the archetypical bean counter or “numbers guy.” In many companies, this leader is second in command to the CEO. The CFO must be a thinker, an idea person, a listener and a self-starter. Most of all, high-performing CFOs share an intellectual curiosity that propels them to question processes and understand operations. Growth-oriented companies seek CFOs with these “soft skills.”
Smart Business discussed with Heck the attributes of high-performing CFOs.
Describe characteristics that high-performing CFOs share.
While CFOs’ duties inherently include preparation of financial statements and accounting oversight, a deep knowledge of business operations is critical. CFOs must have functional expertise that goes beyond understanding debits and credits. This means high-performing CFOs must leave their offices and learn the business from top to bottom. They must work closely with all leaders of the company and also engage with operations employees. CFOs need to ask the ‘whys’ and the ‘why nots.’ This intellectual curiosity helps them learn how the business operates.
Growth-oriented companies need CFOs that understand mergers and acquisitions, including issues surrounding pricing, financing, due diligence and integration. CFOs should also know how to develop a business plan, budget and forecast. This requires communication with other managers and knowledge of how the company is performing today and its capabilities for the future. All this information comes from asking the right questions and doing the appropriate homework.
What other qualities help a CFO lead a growing company toward success?
Because even middle-market companies now operate globally, CFOs must understand international issues ranging from foreign currency to taxes, exchange rates and transfer pricing. Also, certain industries demand expertise and knowledge of various regulations. CFOs must keep current with industry news and understand industry dynamics. Of course, being technologically savvy is crucial today. CFOs should know what systems are available that could improve efficiency and effectiveness in not only the accounting department, but also in operations, human resources, sales and marketing and other business segments. In many cases, CFOs oversee the tech group in a company or, at the very least, work very closely with IT personnel.
How can CFOs gain knowledge that will help them to be ‘high performers’?
There are plenty of opportunities CFOs can take advantage of to build their skill sets in various business operations. Industry associations, organizations for C-level individuals, seminars on key topics, relevant magazines and periodicals are all important for the CFO to expand his or her knowledge. But I find the best way to learn an operation is to talk to people. Ask them why they are doing certain things. Find out why a process works one way instead of another. Learn from technical staff, engineers, the sales and marketing department, and administrators in the office. Communicating with employees at every level helps CFOs gain the respect they need to be an effective leader.
How can advisers and networking opportunities outside the business improve a CFO’s performance?
CFOs should meet with their advisers on a regular basis to discuss current events both inside and outside the company. This independent perspective can be very valuable to the CFO as he or she evaluates plans for the future. Because advisers work with CFOs in a range of companies, they can provide valuable third-party insight based on their experiences.
Belonging to professional organizations and industry groups that provide opportunities to network with peers will help CFOs stay on the cutting edge of their business. They can listen to speakers who address issues CFOs face and meet others who are confronting similar challenges. Again, intellectual curiosity comes into play outside the office. The more questions CFOs ask, the more strategies they will learn to drive their company’s growth and overall success.
JOHN O. HECK, CPA, is director of Audit and Accounting at Kreischer Miller. Reach him at email@example.com or (215) 441-4600.