Having a strong CFO within your organization has always been critical to your company’s success. But what defines a truly great CFO in 2013? While a few variables may differ by industry and by company, in general there are four key attributes that are considered essential:
1. Strategic vision
Is your CFO a contributing member of the senior management team, helping to develop future plans for your company? Does your CFO understand the challenges within your industry and your organization, add new ideas, and develop a plan to grow the company? An essential quality of a strong CFO is someone with a strategic vision who is also able to communicate that vision. The CFO must not only track the financial situation for the company by looking in the “rear-view mirror” but he or she must also look ahead and anticipate what will happen. The ability to formulate a number of strategic plans to help the company move ahead is critical.
2. Leadership
The CFO is in a leadership position within an organization and therefore, must know how to develop the financial team. Does your CFO work well with the team to develop its skills so its members add more value to the organization? Is your CFO able to work with your board of directors and senior management team? Is the CFO seen as a team leader who is open to the ideas of others, able to express an opinion, and obtain team “buy-in”? There should be some healthy tension between finance/CFO, sales/marketing, and operations to facilitate an exchange of ideas and ensure every objective is being met by the company in these challenging times.
3. Deep knowledge of all areas of the company
A CFO interacts with all areas of the company and must have an understanding of how all the elements of a company fit together. Developing rapport with people in different areas within the company and understanding their needs is a key attribute of a good CFO. A CFO should be able to communicate financial matters to non-financial people and explain how they fit within the framework of the recommend solutions. Companies need a CFO who communicates well with people outside the company and maintains good relationships with bankers, the audit firm, insurance agents, legal counsel, and especially the company’s top clients. Good CFOs are able to wear many hats and see how all the pieces fit together to gain positive results.
4. Strong financial acumen
A strong CFO manages both the cash and the growth of the company. Does your CFO allocate cash properly to help ensure your company’s growth? Is the CFO conservative or a calculated risk-taker? Does the CFO’s management of cash fit with the company’s vision? The CFO must manage risk, be able to take your company to the next level, understand the pitfalls associated with rapid growth, and be prepared for whatever develops along the way. Having intimate knowledge of all financial matters is an essential attribute of a good CFO.
A CFO must be a jack of all trades: a gatekeeper of financial matters, a cheerleader for the finance team, a good communicator both inside and outside the company, and a strategic visionary. The strongest CFO is a leader who can help keep your company moving forward and position it for long-term success.
Contact us to learn more about this topic.