The finance function is undergoing rapid development these years as is the rest of business. I’ve written about this in many posts and if you’re only now embarking on a finance transformation journey I suggest you start by reading “Introducing The Finance Transformation Nine Box”. This will give you a basic framework to get started and structure your thoughts around. Obviously, I’m not the only one talking about the rapid changes in the finance function and there is a lot of buzz about what kind of CFO is needed to lead the new finance function. Strategic partner, business partner, value-adding insights etc. are all phrases that are attributed to the new CFO that’s needed in town.
Ask the executive headhunters and they all say the same
In a white paper recently published by AESC 11 leading executive search consultants around the world who specialize in finding the right CFO were asked what companies are looking for these days when they are hiring a new CFO. They basically all say the same so I’ll summarize in brief.
- The CFO role is getting more complex
- The CFO should be more operationally and commercially savvy than ever before
- The CFO role is becoming more strategic
- The CFO is having primary responsibility for cybersecurity
- The CFO is having more involvement in technology investments
- The CFO is more and more likely to qualify to take over the CEO chair
All of these demands call for a new kind of CFO and depending on which framework you use you could say it’s more of a catalyst or strategist compared to steward or operator as would be the terms Deloitte uses. The interesting thing though that the executive search consultants also say is that the CFO still needs to be technically savvy and know the basics. Therefore, the new kind of CFO would spring from those CFOs who understand to evolve their skills. It’s no longer a matter of saying if you are a catalyst or steward. You have to be able to cover all these aspects in line with the 5 types of CFOs I wrote about in “Disruption And The 5 Types Of CFOs”.
No one can be all that at once!
Some would say that it’s impossible for one person to master all of these skills and while most CFOs would be stronger in some areas it’s now a prerequisite that they are comfortable in all of them. It speaks directly to the increasing complexity of the role and is directly visible on the paycheck as well as the CFOs are seeing higher pay raises than the CEO. So as the CEO is expected to know something of everything those same demands are now put on the CFOs and they are compensated for the increasing demands of the position. It’s not really a surprise as such as if the CFO should be able to advice on strategic and business issues in general (s)he would need to know something about everything as well. It also means that if you’re aspiring to become a CFO you need to think again about what career path you should take. I wrote recently about how you can help you CFO transform finance and the main blueprint is that you need to seek experience outside of finance. This is also directly confirmed by the executive search consultants as one of them puts it.
“For CFOs to be properly considered for CEO roles, they need to plan to expand their core competencies, and prove it to stakeholders. COO can be a good stepping stone in many organizations”
So, what’s your plan towards becoming a CFO or even a CEO? Do you also see the finance function changing and have you seen the impact on your CFO?