Running a company involves gambling and risk-taking.
Not surprisingly, chief executive officers have special needs that need to be fulfilled by their chief financial officers.
CEOs have total responsibility for managing risks and growing the company.
They cope with threats from old and new competitors while strategizing for growth. That calls for substantial contributions from chief financial officers.
Accordingly, to avoid gambling with the CEOs trust, CFOs must ascend to a higher level.
That means from an operational-support role in financial fundamentals and compliance – to the role of a financial guide and strategic partner in the C-suite.
So CFOs must be savvy in multiple company functions – from research and development to achieving status in exemplary customer satisfaction.
CFOs must use such knowledge to develop enhanced communication that leads to the CEO’s trust.
There is a minimum of eight steps.
They include:
1. Big-picture study
The CFO must go well beyond debits and credits in the financials and look beyond the quantitative to the qualitative.
Along the way, the CFO must keep an open mind and forget about irrelevant information and preconceived ideas that were developed for former employers.
What is apropos for one sector or company might not be for another.
Instead, a company-wide study is necessary for comprehensive knowledge – from what’s financially feasible for employee retention – to all salient drivers of profit.
Profit drivers must be objectively and authoritatively discussed with the CEO.
2. Human capital foundation
A CFO can’t expect to excel to a superior level without adequate support. So a stellar team is needed to operate the finance department. Day-to-day functions must be delegated.
This frees the CFO to become an expert strategist for the CEO in growing the business and dealing with all stakeholders.
3. Soft skills
The CFO must be a good listener to all stakeholders and, again, keep an open mind. Sometimes a company’s biggest weakness is the CFO who isn’t flexible, and does not listen to keep an open mind or using soft skills to say no.
This has been true since the beginning of time. But it’s probably even more important in the complex 21st century.
There’s an applicable corollary here. Once an exemplary image of soft skills is accomplished, a CFO develops a glittering reputation for being trustworthy and 100 percent focused on the welfare of the organization.
4. Preparation for change
Change is inevitable. Preparing for change includes shifting attention from the short term to a sustainable long term.
After information is analyzed, a CFO must lead in defining key performance indicators and then monitoring and gauging the results.
There must be logical timelines with relevant, objective metrics that lead to strong returns on investments.
5. Image awareness
In this increasingly connected world, reputations must be protected. A CFO must be mindful of stakeholder, public and media perceptions.
Businesses must be aware of customer expectations as well as buzz on social media and traditional media.
6. Expectation management
A CFO must work to understand the CEO. The financial officer must read what the CEO reads, and understand the senior executive’s preferences in communication and presentation of information.
7. Transparency
The business’s true performance must be regularly analyzed and reported. The right processes and values must be instilled in every department.
Correct initiatives must be strategically implemented.
8. Understand potential of technology
The CFO must be the agent of change whenever feasible and necessary.
Awareness of all company functions must be leveraged digitally for minimal costs, customer loyalty, business growth and collaboration with team members and the CEO.
From the Coach’s Corner, relevant articles:
Best Practices for CFOs to Stay Current in Technology — Just as every professional knows, CFOs also find it increasingly challenging to stay up-to-date on technology. Up-to-date technology means CFOs can better do their jobs. Here’s how.
For Profits, CIOs Must Agree with CEOs on 5 Issues — Despite the increasing importance of information technology, many companies are losing profit potential from a lack of productive discussions about achieving strategic goals using technology initiatives.
Complete Guide: How to Market Your Ideas to the CEO — Whether you’re an executive — in finance, human resources or marketing seeking to be a partner in the C-suite — it’s vital to communicate effectively with senior management. To market your ideas to senior management, here are the four best practices.
“Trust is built with consistency.”
-Lincoln Chafee
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