CFOs are facing huge challenges in the current climate. From driving growth and transformation, to being the custodians of the business, taking on the top finance job is about steering the strategy and working alongside senior leaders to inspire and motivate your people.
However, the complexity of today’s environment means that no leader, regardless of their experience or seniority, can have all the answers.
In our most recent research, with CFOs across our global community, seeking inspiration and fresh thinking from outside their business or sector was the number one area CFOs said they needed help with. The same report revealed 71% feel isolated in their leadership role, an inevitable consequence, in many cases, of being a top decision-maker within the business.
So how do CFOs alleviate this isolation and get the support they need to lead effectively and remain successful in their roles. Leadership development is critical to ensuring C-level executives have the right skills and capabilities to be future-fit.
At a recent event we held for CFOs, ‘challenged’ was the predominate word used to describe their current state of mind as leaders. This was closely followed by ‘optimistic’, ‘curious’ and ‘excited’ indicating that while CFOs acknowledge the difficulties present, they are focused and feeling positive about the future.
Digging a little deeper, skills and talent were cited as the biggest sources of disruption by CFOs, with over half (57%) identifying this category as the most significant challenge.
A concerning 65% said they did not feel their company culture was in the right place to drive performance, just 33% told us their business was executing on its strategy for net-zero, and 53% revealed their senior leadership team was not particularly proficient at using external insight to shape their strategic debate.
With these challenges in mind, how do CFOs acquire the skills and knowledge they need to be successful in the current climate? Building and maintaining a close relationship with the CEO and the Board is clearly key. People and communications skills are also vital, as demonstrated by the fact this made it onto the top five list of areas to work on in our CFO Research.
Finally, many of our CFO Members highlight the difficulty of balancing emotional intelligence (EQ) and IQ as a CFO. At the C-suite level, the ability to tap into high levels of EQ over operational expertise and excellence is vital to the role of an outperforming CFO.
Developing skills to influence stakeholders
In our research, CFOs identified Chairs and non-executive directors as their most challenging internal stakeholder group, although 76% did recognise the Board as supportive of the goals and objectives of the business.
Support from Chairs and non-executives is critical, especially when undertaking organisational change or transformation. Boards can act as a sounding board to new ideas, so it’s important CFOs maintain a good working relationship with their NEDs and, in particular, the Chair.
Open and honest conversations are vital to a good relationship between the CFOs and their Boards, particularly in the current climate.
CFOs may need to have challenging conversations around strategy, and champion areas of innovation and transformation which potentially come into conflict with opposing views from non-executives. Ultimately, these fundamental relationships must be learned and maintained so the CFO can make an impact.
Similarly, employee relations are a vital part of any CFO skillset, with talent retention and development listed as top priorities in our latest research. Many businesses have seen higher employee turnover over the last few years which inevitably has an impact on productivity at a time when businesses need to prioritise this more than ever.
So, how can CFOs and the senior leadership team ensure that talented employees stay within their organisation? Although the amount of people moving between jobs has decreased, many employees will still move to a different job if they feel their organisation does not provide the right support during this time.
Leadership development for CFOs
It can be difficult to identify the right development opportunities as a CFO. You have likely built vast operational knowledge during your career to date, but this has potentially been quite narrowly focused, developed in a limited number of companies, sectors, or regions.
Additionally, the pace of change is such that it is impossible for any executive to remain current and retain in-depth expertise on topics such as AI and sustainability. It is unrealistic to think a CFO will have this, whilst also delivering as a leader for their organisation.
Recognising that what you are experiencing is shared by other leaders, in-person events, virtual events, mentoring, external research, and expert advice are all valuable ways of developing yourself as a senior leader.
Looking outside your immediate organisation and sector, provides a different perspective, providing CFOs with a chance to challenge, critique, support, and validate their strategy. It also offers the opportunity to hone your own leadership style, empowering you to make more informed decisions.
Across our research, Members in our global leadership Community agree that having access to mentoring and external refence points makes a positive impact on individuals, leadership teams and the performance of the organisation.
CFOs agree, with 88% saying that mentoring improves the performance of senior executives and 94% confirming that access to reference points outside your organisation and sector enhanced performance.
Working with CFOs and senior teams globally, we often see how easy it can be to neglect the support senior executives need for their own development and performance.
With such a key role in driving the strategy and leading the business, CFOs need access to the right support networks and crucially, the opportunity to benchmark and stress test some of their thinking around the strategy, outside of the business.
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