What do you expect from a CFO? What the key strengths for CFO? Do you define a good Chief Financial Officer with financial insights, a few technical skills, accounting competence, and the ability to forecast and take calculated risks? To be a professional, modern, and good CFO, you need a lot more to keep up with the ever-evolving digital transformation.
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You must be wondering exactly what makes a great CFO? Over the years, the definition of a great financial officer has modified as CFO duties and responsibilities have become more leadership-centric.
A good CFO is smart enough to look beyond the numbers and play the role of a trustworthy strategic business partner to the CEO for maximizing investment, harnessing Big Data, and adapting swiftly. A successful CFO must have a keen eye for minute details, a deeper understanding of the company’s finances, a forward-looking mindset, and a macro view of the competitive market.
Let’s look at the characteristics and common key attributes of becoming a remarkable CFO!
One of the essential traits of a great CFO is “strong leadership ability” because he will not only be responsible for bringing a talented team together but also for leading, motivating, guiding, and training them. Officer must be a problem-solver with the front-runner confidence to make critical decisions for handling disrupted relationships with stakeholders.
The role of CFOs is the proposer of the company’s growth which requires unparalleled headship qualities so they can envision the bigger picture and achieve the company’s business goals by utilizing their tactical skills.
Master Technical Skills
If CFO lacks IT knowledge, managing the finance department might get tougher!
A CFO must make profitable decisions about the company’s expenditures and make its procedures more efficient through automation. BUT, it is only possible if the chief officer is tech conversant and has the capacity to adopt and implement the newest technology solutions. As Sarah Spoja, CFO of fintech provider Tipalti, explains, “CFOs should be thinking about how they can build a tech stack that will help them and their team be as successful as possible. That means both reducing manual work and having the data and insights more easily attainable.”
Whether the finance chief is making a budget, carrying out analysis or auditing, ensuring compliance to standards, or implementing accounting principles, it is necessary to develop or refine their technical expertise to look closely at the organization’s finances.
Comprehend Real-Time Financial Data
If the CFO fails to handle data and cannot appreciate the importance of delivering in-the-moment insights when needed, the enterprise will never grow!
To improve internal efficiencies, make profitable decisions, limit instability, foster a friendly relationship with global companies, and impress new clients, the CFO should be familiar with the numbers and must have the ability to perform analytics of the existing financial data to help the CEO take executive choices without struggle. A good CFO must have a strong analytical aptitude.
CFO with the proper knowledge and industry experience is more likely to succeed in the argument against competitors, scaling up the company’s growth exponentially.
Forward-Looking Strategic Mindset
How to be a CFO who is appraised by every member?
The simplest answer to “how to be a great CFO?” is “to be able to forecast risks through analysis and help the company accomplish all financial goals by following strategic, forward-thinking models.”
A good, effective CFO is the one who always thinks and progresses strategically, the one who is always ready to take strategic initiatives, the one who acts as a change leader with a forward-looking approach, and the one who partners with the board of directors to forecast the future using numbers.
The finance officer should follow the “ask, analyze, and strategize” attitude for revealing opportunities, identifying challenges, analysing diverse viewpoints, making impactful real-time analysis, and expecting change without succumbing to pressure.
As explained by Steve Priest, eBay’s CFO, “Helping them think about what’s around the corner and the trajectory of the company, particularly in an ever-changing environment, is incredibly important. To do that, finance leaders need to be looking forward and anticipating change.”
Adaptability & Innovation management
Modern CFOs are considered “good” only if they show the capability of:
- Making the most out of the available resources to run a company’s finances effectively
- Focusing on process improvement to adapt to the existing situation
- Revolutionizing a highly motivated working environment which supports originality
- Retaining employees with his organizational skills
- CFO strategy for internal departments should reflect radicalism
- Adapting the newest advances in technology for innovation
- Refining the company’s talent recruitment strategy to bring in the best candidate
- Utilizing automation solutions and management tools for effortless working
CFO activities must reflect modernization. Ash Noah, vice president of CGMA External Relations at the American Institute of CPAs (AICPA), emphasizes innovation and advises against relying on old practices anymore. He says, “Making your business resilient and strengthening your business model is what the CFO of the future will have to do. The old way of thinking stifles innovation and ruins new business creation.”
Best Style to Communicate & Collaborate
CFO duties are nearly endless, and to become the best CFO, first, you must be aware of different communication styles and understand what style suits the situation or audience. Second, you must choose the most professional, effective, and comprehensible ways to communicate with your partners and competitors. CFO educational background might play a significant role here.
According to Brian Beckwith, CEO of Formation Capital, “Flex Communication Style” should be the priority. To become excellent communicators:
- Always prefer a transparent communication
- Uphold an engaging session
- Make sincere and confident statements
- Don’t forget to address critical issues
- Stay interactive while sharing information with management
- The conversation should be concise
When you know how to communicate being CFO, you will better coordinate company activities, carry out hiring procedures, manage offshore teams, and collaborate with other parties.
Risk Assessment Skills
Where providing real-time insights is one of the primary CFO tasks and responsibilities, forecasting risks related to security, compliance, financial, personnel, or IT is also central to their job. A successful chief financial officer must not only recognize potential threats but also mitigate them to avoid a long-term business crisis. He should take responsibility for creating a strong defense against calculated risks within the operating framework.
In the opinion of executive recruiter Arnold, “Managing cyber risk specifically has now become front and center for CFOs. They’re partnering with their CIO to determine the risks and how to confront them across the entire organization.”
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