The Habits of Highly Effective CFOs

With that in mind, the Boston chapter of the CFO Leadership Council recently held a panel discussion on “The Habits of Highly Effective CFOs.”  The panel was moderated by Bill Driscoll, President of Robert Half International.  The panelists included a number of successful CFOs:

  • Keith Seidman, former CFO at Thinking Phones, Kiva Systems, Acme Packet
  • David Noymer, CFO at the Greater Boston Food Bank
  • Ted Myles, COO & CFO Ocata Therapeutics
  • Mary Jefts, CFO Unidesk

Here’s a summary of some of the key points made during the panel discussion.

Advice for Landing Your First CFO Role

Breaking through into a CFO role is difficult – even more so without the right experience.  It’s much easier to land a CFO position once you’ve been in a similar role.  One panelist leveraged his network to land his first CFO role in small NASDAQ company.  Another panelist had Controller experience and leveraged that with investors to move into the CFO role.  He took a risk that paid off.

Up-and-coming No. 2’s can be attractive CFO candidates for companies.  How can you make yourself stand out?

One word of caution – make sure to perform due diligence on companies before joining to uncover hidden issues.  Get outside opinions on the company from customers, partners, investors, and analysts.

Working with Boards

It’s key that you build strong relationships with board members.  Be prepared.  Treat meetings with board members like a job interview.  Connect 1-on-1 outside of meetings.  Get input.  Understand their issues and concerns.  Use board members to work through issues. 

The CFO needs to set expectations with board members.  There should be no surprises.  For you, that means being candid and direct.  Present problems and solutions.  Build trust.  Communication is key.

Here’s a link to a prior blog article on this topic.

Effective Communication with Employees, Other Stakeholders

bigstock-Business-presentation-on-corpo-89684099.jpgAs the CFO, you need to be consistent in messaging to stakeholders.  Employees, investors, customers – all are really important audiences. You need to clearly communicate goals and objectives to all stakeholders. 

The CFO, as a member of management team, needs to work on messages for employees in the case of major changes, such as pending acquisitions.  For you, this means highlighting the opportunities that will create for employees.  With employees – both formal and informal communications are important. 

Executives need to maintain contact with key customers and ensure solid relationships.  That means speaking with customers as part of your due diligence, before joining a company, to understand their point of view. 

Key Habits to Adopt

Preparing for board meetings is key.  That means you need to understand key objectives and create materials accordingly.  Pitch preparation is key in getting financing as well.  The best way to be prepared?  Know the details behind the summary pitch.  Practice pitches with different audiences.  Negotiation preparation is also vital. 

For CFOs in public companies, preparation for earnings calls and analyst questions is critical.  Have reference materials available – either on paper or electronic form – so you can go deep when needed. 

How Role of CFO Has Evolved

The role of CFO has expanded over time, with a much broader focus than 30 years ago.  CFOs are more involved now in setting the direction of the company, as well as managing day-to-day tasks.  The key here is “managing”—in other words, let your team handle the day-to-day stuff.  Sarbanes-Oxley (SOX) had a big impact in getting CFOs more in touch with the business, improving the governance of companies and broadening the CFO’s role. 

Technology has changed as well.  For instance, working with auditors has changed from organizing work papers to loading them on a thumb drive to uploading docs to the cloud. 

The CFO has become a more strategic partner to the CEO and the business.  The CFO needs to help with problem-solving, not just manage back-office tasks.  Having a seat at the leadership table is key in today’s world.

Future of Finance and CFO Function

bigstock-Business-Woman-876649.jpgCFOs of public companies face continued challenges in communication with an analyst community.  The role of social media and rating sites like Glassdoor put pressures on communications.  The workforce is changing.  Millennials are demanding, so you need to address their issues in order to attract and retain talent.  They have expectations and want flexibility in work location, styles.  You need to train them on boundaries of communication, what to share and what not to share.

Lawyers have a bigger impact now, especially in public companies.  Industry specialization is becoming more important.  Networks of CFOs vary by industry – e.g., Biotech vs. High Tech.  More involvement in operations is expected.

Automation and technology play a bigger role now in the CFO’s job.  Cyber security is a big concern.  CFOs and companies need to get ahead of the threats here.

Lessons Learned (what you would tell your 25-year-old self?)

CFOs shouldn’t get pigeon-holed.  In other words, you need to network with peers, stay current on industry trends, bounce ideas off others.  Do this early in your career.

You need to think strategically and consider alternative paths, options.  It’s OK to make mistakes.  Focus on excellence vs. perfection.  Communicate better with key stakeholders.

Don’t be too emotional.  You need to let problems unfold.  Listen to people.  Consider options.  

Key Takeaways

This was a great panel discussion with some practical advice for CFOs and CFO “wannabees”.  And in thinking about how cloud-based EPM solutions can support some of the key “habits” suggested by the panelists, I see a number of opportunities.  Some examples include the following:

  • Creating high-quality board presentations and books of reports
  • Generating accurate and timely financial statements and supporting detail for earnings releases, calls, and regulatory filings
  • Developing accurate revenue and expense forecasts that are used in setting guidance with stakeholders
  • Leveraging the cloud to support cyber security initiatives

To learn more about cloud-based EPM solutions and how they can help you be a more effective CFO, check out this free white paper “Introduction to EPM in the Cloud.”

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