Essential Skills Of A Successful CFO
Posted on Jul 08, 2014
If there’s one thing more damaging than not having a Financial Director in an organisation, then it’s having an ineffective one. Yet, the latest survey from Directorbank showed that four out of five directors had worked with an ineffective or suboptimal Head of Finance.
Appointing the wrong person to oversee the financial strategy of a company is one of the most important decisions an organisation has to make. Get it wrong and the long-term consequences can disrupt every sector of the business.
Success is not defined by keeping the organisation ‘ticking over’, but having information, analysis and imagination to engineer progressive and radical change from the resources and tools available to an FD.
So what should the employers look for and what are the key skills to make a Finance Director stand out in a present day business? Here are few essential skills and a useful checklist for FDs:
Understanding the ‘big data’ of an organisation means that an FD or CFO (Chief Finance Officer) isn’t now just about making a business perform more effectively. In the words of Carlos Passi, assistant controller of IBM, “By capitalizing on big data using business analytics tools, the role of the CFO is moving beyond optimizing the finance function to transforming the enterprise.”
It doesn’t signify that an FD has to become the data expert. All he/she needs to do is find the data that really matters to the business and be able to use it effectively. Working closely with analysts, representatives from IT or the CIO might improve the chances of making the best of the available data.
“What are the objectives of a successful CFO?”. The correct answer doesn’t have anything to do with a big pay rise as some might think.
If you are a skillful and result-oriented CFO, your responsibility is to create value for Shareholders - generally this means growing the profitability of your company. In order to do so, you’d have to concentrate your attention on key business processes. An understanding of the business rationale will allow you to develop techniques to minimize costs and improve efficiency.
Ability to streamline the use of Technology
It’s not all about numbers anymore. Today's technology offers a range of tools which help CFOs to save time, money, energy and even PAPER! Starting with picking an accounting system, to managing financial reporting, and ecommerce transactions involves both financial and technology knowledge.
Today, organisations gain a significant advantage through technology if not all the key information you might ever need, can be found online. If you feel that technology is your weak point, just do your homework - research and start using it.
Every organisation faces the challenge of balancing risk versus reward. However the risk must always be properly calculated. The numbers really matter, therefore so does the CFO.
As Caroline Raggett from Russell Reynolds says, the CFO is as the center of a “virtuous triangle.” The Chief Financial Officer, she notes, “may not be setting strategy, but they are integral to setting it. Through control of numbers, they are as responsible, some might argue even more so, as the CEO, for making sure that the organisation executes that strategy to the highest level of performance that it can. And, at the third point of the triangle, the CFO needs to tie these two elements together and be the front face, with the CEO, to the market.”
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