Five Traits of Savvy CFO's
CFO's role has evolved from bookkeeping and record retention, reporting, and compliance to navigating the entire company's direction. With potentially endless merger and acquisition opportunities in our environment today, as financial leaders, we must understand where additional resources, capabilities, or customers would best serve your company and its stakeholders. To navigate efficiently through expansion efforts, having the ability to recognize operational and financial objectives will help identify initiatives and accelerate completion times.
With the ability to cut costs, drive revenue, guide investment decisions, and facilitate initiatives that increase stakeholder value, CFO's must demonstrate the ability to collaborate with various leaders, departments, and third parties to achieve organizational goals.
Understanding Core and Non-Core Business Activities
When CFO's dig into the frontline, assess the value chain and tie in the core business activities, the opportunities are endless. The core business activities are how the company generates income and serves the customer base in a value-added manner. CFO's are change agents in organizations when they learn about their business from the front end through the back end. When engaged CFO's become notified of issues, they can provide efficient and effective decision-making to keep short-term results inline while remaining long-term focused.
Holding Leadership Accountable for KPIs
Leveraging data to make an informed decision is critical for sustainable performance. More importantly, is the CFO's ability to communicate throughout the organization the few KPIs the organization will "hang its hat on." With just a few goals, you can track performance, illustrate customer experience and success, and measure operational efficiency. Collectively these KPIs will tell a snapshot story of your company at a particular time, over a specific period, and compliment financial statements. Partner with technology leaders, business analysts, and capitalize on data-driven insights. Utilize task forces to increase peer accountability.
Actively Engaged Throughout All Levels Of Company
Driving efficiency and developing enhanced capabilities requires an understanding and constant pulse of all levels of the company. If we want to innovate and create new products and services or improve our current offerings, we must hear what the customer says and our internal teams. Also, acquisition integration is a complex process that requires the transition into the controlling company culture. CFO's must be aware if potential acquisition candidates will fit into their culture and create a sustainable environment. Regardless of the initiative, pulling teams together and getting buy-in comes from being an active leader. Lastly, when we recognize internal talent, we must foster and develop our human resources and maximize our return-on-investment (ROI) on talent acquisition and training efforts.
Ability to Align Strategies
Ultimately the CFO is striving to exceed shareholder expectations, beat internal finance goals, and improve financial statement performance. Guiding the organization's direction aligns various levels of strategy between multiple functions, teams, and business units. Having the support of HR, Sales, Marketing, Operations, and other critical functions to carry out strategic planning efforts is necessary for positive results. The priorities across different business units will vary and must fit into long-term goals. If the organization plans to invest in a strategic marketing program, then the CFO must ensure an interconnection between internal parties and the target market.
Strong Ethical Compass
As the top fiscal manager, CFO's have a profound responsibility to ensure the compliance of applicable laws and regulations, regardless of how severe the bottom-line impact. Accordingly, being truthful and forthcoming in communications with all parties and stakeholders is a must. We are concerned with financial performance and our risk management strategy and execution to mitigate downside risk through rigorous compliance efforts. We set the tone for the whole organization regarding how we conduct our business affairs with customers and handle fiscal matters. Do what is right every time, no matter the circumstances.
Keep hunting for the next acquisition or expansion effort to propel your company forward. The journey of building a healthy balance sheet with adequate cash to optimally structure new deals takes time and discipline. It takes the whole team and company to achieve performance goals. Focus on customer retention and adding new value to the company. Get out into your organization to find new talent, uncover new offerings, learn about your customers, and deliver consistently to your growing market.