If you ask fifty CEOs “What makes a great CFO?” you will probably find that most CEOs agree on many if not most of the key attributes of great CFOs. They certainly agree that a great CFO isn’t a bean counter. We don’t mean any disrespect to those who are charged with “counting the beans” because it is vitally important. But we do agree that great CFOs—even mediocre CFOs—don’t count beans.
Some Key Characteristics of Great CFOs
- strategic and visionary
- impacts top- and bottom-line growth
- leads and motivates
- communicates persuasively and effectively
- astute business acumen and judgment
- unimpeachable integrity
We have many years of experience recruiting CFOs, and our experience tells us that the measure of a great CFO comes down to intelligence. We’re not referring to IQ, although intellectual horsepower is a key success factor for CFOs and all C-level executives. We’re referring to business intelligence as well as strategic, leadership, emotional, and digital intelligence.
CFOs with exceptional business intelligence have a canny ability to connect the dots and see around corners. They focus on the long-view—two or three years ahead. They anticipate opportunities and threats and help their companies gain a competitive edge by proacting and maneuvering strategically and tactically. They focus on getting and staying ahead of the curve.
CFOs with strategic intelligence possess superior critical and conceptual thinking skills. They can adjust and adapt strategies to the marketplace and to technological, competitive and economic realities and possibilities. They can decipher links between often complex elements and transformational events and help their companies achieve competitive advantage by strategically navigating and exploiting the events and links. What we’re referring to here is mental agility.
Leadership intelligence has different colors and flavors. The type of leader an organization requires at a given point in time will be influenced by a number of variables. A start-up may require growth-oriented leadership, a long-established manufacturer may require change leadership or more dramatic transformational leadership. Both growth and transformation require mission-driven CFOs who can drive organizations to achieve operational and executional excellence. These CFOs have the ability to inspire, motivate, and influence–all key aspects of leadership intelligence.
Emotional intelligence─EIQ─is a foundational element of effective decision-making. Decisions involving risk, uncertainty, and ambiguity, such as M&A transactions, can elevate anxiety for everyone involved in the due diligence process. For some people emotional inputs are hard to manage regardless of the use of decision-making tools such as decision trees and simulations. But executives with EIQ can remove extraneous emotions and personal biases from the equation and manage their emotions and those of others who are participating in the decision-making process. In short, EIQ is an essential set of great CFO skills.
Digital intelligence goes beyond transforming the finance and treasury functions using sophisticated automation, artificial intelligence, and even robotics. New digital technologies are changing how CFOs create and deliver value. As key contributors to the development and execution of strategic plans, CFOs need digital IQ. They need to understand and help the organization effectively deploy current technologies, plan for emerging technologies, and maximize the organization’s technology investments.
Do Investors Reward Companies That Have Great CFOs?
There is abundant evidence that when investors and analysts have confidence in the top finance executive the company and shareholders are rewarded.
Unfortunately, the investment community can punish as vigorously as it can reward. One disingenuous comment from a CFO and confidence is shattered along with the CFO’s reputation.
So, we would add the following confidence-enhancing “Great CFO” attributes to the list.
A great CFO:
- has insight into what drives the numbers
- establishes and explains meaningful metrics that add value
- has an integrated and comprehensive understanding of the business
- interprets and sees opportunities in complexity and ambiguity
- navigates risk with prudence and courage
- thinks like an investor.
Are you looking to recruit a great CFO? If so, let’s talk.