The CFO role has traditionally been perceived as the organisational ‘compliance police’ (I am sure many CFOs will not see this as their only purpose) an individual tasked with protecting value for shareholders first and foremost.
The typical CFO is often seen as an analytical pragmatist with strong technical skills that oversee the production and interpretation of detailed spreadsheets and metrics to effectively forecast scenarios.
“Cashflow”, “rules and regulations” and “risk” are common vocabulary in almost every discussion.
However, the CFO landscape has been changing markedly over recent years.
The demands and interests of markets, customers, technology, investors and people are no longer the preserve of the CEO and COO. The finance function continues to drive more of the strategic agenda and consequently, the CFO increasingly assumes the role as the closest partner to the CEO. More than ever, the CFO is an important team player, needed to educate and influence their Executive Team.
What does this mean for the demands placed on the CFO?
Whilst the hard skills of cost management and other accounting disciplines are still very much required, there is increasing realisation that finance experts’ social skills need to be fostered.
The Institute of Management Accountants have highlighted that in order to progress to CFO level they perceive there are four key skills needed:
- effective communication
- time management
- influencing other departments
- leading change
These “social competencies” often clash with the more clinical approach to problem-solving upon which accountants rely.
However, there is some good news!
Whilst IQ (Intelligent Quotient) levels can stagnate during our professional careers, EQ (Emotional Intelligence), which covers such social competencies described above, can be strengthened.
The use of Executive Coaching is a powerful way to increase self-awareness to support the CFO as a proactive leader, able to drive change and develop talent. This is particularly relevant for CFOs who are being nurtured as a future CEO and who need to think differently within their working landscape.
Recent research identified CFOs remain confident about growth prospects with 89% making investments to manage change. In addition, around 39% identified the need to manage the impact of automation and new digital technologies. This reflects other articles and discussions within accounting literature, including CA Today who note that keeping pace with changing technology is a focus for CFOs, and that breaking down silos is the key to ensuring success.
Quite a shift from traditional CFO strengths.
The role of an executive coach provides a trusted, safe partnership to help balance the technical competencies that have been built up over years.
Coaching will positively impact social competencies – often a myriad of feelings and behaviours regularly exposed to peers and investors. Coaching has grown significantly in the past decade as an important organisational consulting intervention. Alongside other training and development tools, the tool can accelerate and embed the CFO agenda. A coaching process allows a partnership to be forged, inspiring commitment, growing skills, promoting discipline and shaping the environment.
In my experience of coaching executives, many of whom being CFOs, I find myself drawn to Marshall Goldsmith’s mantra that the key challenge isn’t understanding the practice of leadership (KNOW HOW) but practising the understanding of leadership (SHOW HOW). This can often be the biggest challenge for a CFO, who relies on facts and data, rather than demonstrating proactive behaviours, to influence decision making and leading transformational change.
The Stakeholder Centred Coaching approach – developed by Marshall in his extensive experience coaching Fortune 500 executives – is an effective tool in the Executive Coaching process. It has been specifically designed to develop social competencies, whilst not ignoring the technical experience.
The approach is unique. Its baseline is on feedback mechanisms, such as 360-degree feedback report and observer (stakeholder) interviews. Moving forward, real-time, ‘feed-forward’ mechanisms are applied to support, challenge and develop over a period of weeks and months, thus ensuring regular sense-checks to behavioural change are verified outside of the coach perception.
Having coached across different sectors, I have found that many CFOs approach the process with a level of scrutiny at the start of coaching, based around validating evidence, particularly when using psychometrics. Responses are often focused around what they perceive they need to undertake their role successfully, rather than the needs of others or indeed the business itself from a culture or change perspective. However, executive coaching delivered by an expert can ensure that the outcomes are constantly in view and the effort is focused on the findings and developmental needs and not diverted by a scrutiny and challenge of the process. Coaching the CFO can have the greatest impact over other C-Suite Executives.
If you are a CFO prepared to measure yourself against a global benchmark of executives, perhaps in your first 100 days or planning succession to the role of CEO, with the drive and commitment to self-improvement, contact us for some further information on the methodology and experience.