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A guide to becoming a successful CFO

CFOs must be fearless when it comes to technological advancements and the changes within the finance function

A guide to becoming a successful CFO

The role of a CFO has changed considerably over the last few of years. In the latter half of the decade, finance leaders had to add a whole new array of skills to their repertoire.

CFOs have also been forced to get to grips with automation, and data analytics and to keep pace with rapid technological changes.

As Dynshaw Italia, CFO at Soldo, explains: “The role of CFO has become much broader in scope. The traditional responsibilities like cash flow management, accounting and reporting, internal controls, financial planning and analysis, fundraising, and M&A are still there.

“But on top of that, the CFO is expected to be much more involved in the strategic direction of the company, interpreting and providing insights on the huge volumes of data generated by businesses and dealing with the ever-increasing compliance requirements in an organisation.”

Italia notes that CFOs are not expected to be technical experts. Instead, there is an expectation for them to become generalists: able to solve problems and modify their approach as their businesses grows and adapts to the changing business environment.  “CFO’s should have strong leadership and management skills as well as good communication skills,” says Italia.

Indeed, a too narrow focus may actually inhibit career progression. “As a career path to becoming a CFO, you must try to get exposure to the different areas of the finance function. This includes some exposure to functions outside ‘core’ finance tasks like M&A and fundraising.”

“It’s harder to become a CFO if you’ve only worked in one subset of the finance function and not had exposure to other finance functions.”

The pandemic effect

When the pandemic struck in 2020, CFOs were expected to change once again. Finance leaders around the world were forced to navigate the turbulence by taking on a more strategic role; many CFOs became the co-pilots to chief executives, helping to make decisions quickly to ensure business continuity.

“Finance traditionally meant accounting and reporting, but now it’s much more about adding value to a business and value creation,” says Niteese Lenton, CFO at Averda. “You need different skills and tools now, to manage the data analysis and make the accurate projections that will help a business improve its bottom line.”

Businesses globally have a wealth of data at their fingertips – consisting of both financial and non-financial data sets. This data can provide insights into performance when assessed against criteria set by the finance function. But this information will only be useful if finance professionals are able to interpret the large data sets.

Understanding wider functions

It has always been key for CFOs to understand what is going on within the rest of their business. In the wake of the pandemic, the need for this information to be in real-time is now vital.

The need for the finance team to collaborate with executive teams is highlighted by Soldo’s Seeding the Superbloom research: 67% of those surveyed agreed the finance function and executive function should drive towards aligned goals.

Lenton notes finance professionals often want to cut costs without necessarily understanding what impact these changes will have on teams across the business.  “If you have actually understood how the business functions, you can be realistic about the business decisions that will work,” she says.

Having visibility of other departments, through partnerships, means finance professionals can influence their business’ direction and provide value where needed. “It takes the numbers off the page and makes you aware of the impact of financial decisions on both product and people,” says Lenton.

Soldo’s Italia notes that CFOs are in a unique position in that they often have sight of numerous business areas. This affords the CFO chances to learn about the various business functions on the go.”

Lenton, who spent the earlier part of her career at motor manufacturer Ford, says she did just that. “I worked in five or six different divisions and learned an enormous amount from each of them,” she says. “[CFOs should] look to build their skill set and touch as many elements within the business as they can when they are developing their career.”

Learning from predecessors

The best way to get this experience is through doing, according to Italia. Some form of job shadowing, he says, is invaluable. And it can be done in a way that it actually helps your current CFO.

“At a previous company, I created a chief of staff role in finance for an individual who had ambitions to be a CFO.

“The role involved shadowing me in all my activities and then following through and executing with the rest of the finance team and organisation the strategy and decisions taken. The chief of staff got exposure to high level discussions, wider areas of the finance function and also wider exposure to the various business areas in the organisation.

“For me, as CFO, having someone to follow up and help ensure execution was invaluable. At the same time, the person got the experience needed to help progress their career.”

The above arrangement may not work for every business – but it’s worth asking about. Sometimes the only other way to get the relevant experience to progress ones career, is to move to a wider role in another company.

“Consider changing sectors throughout your career as in each sector you’ll pick up different skill sets and experiences that will make you a better CFO,” says Lenton.

By doing so, young CFOs can gain real insight into the diverse workforce in the business, their experience, and difficulties. As well as the opportunity to understand the complexities and limitations of the company’s processes, she adds.

Progress over time

There is no doubt the CFO playbook has expanded – it is no longer an isolated back-office function. Young aspiring financial professionals, as a result, need to be aware of what will be expected of them and ensure their skill-set is fit for purpose.

Italia acknowledges that mastering this full range of skills will not “come overnight”. But also know, the break you’ve been looking for might present itself unexpectedly. “I got my first job as CFO suddenly, due to an abrupt departure,” Italia says.

Don’t run from the opportunity, he says. “Take whatever is thrown at you. There is no better way to learn than being chucked in the deep end.”

To learn more about how to develop your finance teams, listen to Soldo’s latest podcast series here.

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