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Strategy and innovation

CFO: the most challenging - and exciting - role at the C-Level.

It's not easy to be a CFO. This function is becoming ever more complex and increasingly visible. As was explained at a CFO conference a few days ago: “every day we are given something new to do”.
CFO C-Level
Strategy and innovation
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Written by
Editorial Dept
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10 minutes
18 Oct 2022
The C-Level is an exclusive club for the people who really run the organisation and enjoy the trust of shareholders. The CEO or Managing Director, the Chief Financial Officer and the Chief Operating Officer have always been there. Depending on the company's size and management culture, this group may be supplemented by other strategic positions, such as marketing, technology, data and human resource officers.

CFOs have recently started to become the right hand of the CEO. They are now the number two in many organisations. Being the best informed person in the company, projecting how the business will develop and being responsible for one of today's most important assets - data - makes the CFO an authoritative voice and a strategist with a comprehensive overview who, unlike more specialist managers, is not just concerned about their own department and its priorities.

The CFO was the leading figure during the two years of the pandemic and lockdowns. THE CFO was responsible for underpinning the building. Problems with supply chains, energy costs and inflation following Covid-19, intensified by the war in Ukraine, have strengthened the position of CFOs, but also given them a workload that was hard to imagine before 2020.

The role of the CFO in the C-Level

When a manager has C for Chief in their title it means they have reached the C-Level: senior management. Today's new business titles have expanded the range of senior managers, especially as a result of companies' digital transformations.

The role of the CFO in the C-Level

What characterises senior managers? Their skills are a common denominator, as is their attitude, which makes them unique and endows them with the charisma of leaders. As Victor Küppers says,“ talent is a combination of skills, abilities and attitude. The first two of these add, the third multiplies”.

  • Organisational agility. The ability to move quickly in uncertain times, like those we are living through, and to question orthodoxy.
  • Universality and collaboration. Companies used to work in silos, but that structure is now in a crisis and the demand is now for C-Level officers who are concerned about more than just their own departments, and who know how to work in teams and lead them to achieve the objectives set. Collaborating means helping, and letting yourself be helped.
    • The customer comes first. We must always remember to have a customer-centric focus. Customers change, so businesses must always anticipate that change: there is not time for stereotypes or inertia.
    • Strategic thinking. We must always go one step beyond just maintaining the business or meeting the team's goals.
    • Knowing how to choose teams. You need the talent of knowing how to surround yourself with the best. Not feeling essential because you have been train people who can take over from you.

The Super CFO profile: analytical and strategic

The strategic profile of the CFO has accelerated with the pandemic and the energy and inflation crises. We are talking about a Super CFO who must enhance the skills they already have, rather than looking for new ones, exploiting the versatility displayed in recent years. They must be resilient and display transversal leadership, being able to motivate teams and keep every department informed and pulling in the same direction.

Experts in talent say that CFOs used to have highly developed skills anchored in the left hemisphere: detailed planner, focused, analytical. But now the right hemisphere is also needed: creativity, empathy, ability to read the environment and seek new solutions. A new era where CFOs no longer have just a purely numerical focus.

CFOs are at the centre of the business, having a 360-degree view. They have the information, the data, that enables them to enjoy a comprehensive and up-to-date vision of every area. And from a position of power, because the data cannot normally be questioned and CFOs are recognised for their ability to simplify the complex. Technology has released financial areas from tasks that provided less value so they can devote time to what really matters: strategy.

Finding a CFO: the number two in a company can't be just anybody

Looking for a new CFO is a key moment for a company. The technical complexity of the position means only other managers in the financial area are in a position to perform the role (internal promotion). This forces us to look to the market to find someone in another company.

Bloomberg recently said that the CFO market is red hot in the United States, with investment funds believing this is the most difficult role to fill today. Finding the perfect CFO is important because of the duties involved, but also because there is another aspect of the position that cannot be hidden: the CFO is increasingly the natural replacement for the CEO. Therefore, a potential successor as the head of the organisation is being chosen.

At the Finance Meeting 2022 congress for CFOs in September, one the topics of debate for one panel was: Is the CFO destined to be the CEO? The answer could not have been any different: Yes. The Congress was held in the Metropolitan state and was prowled by headhunters, scouts in a footballing analogy, on the lookout for emerging talent.

The main characteristics CFO headhunters look for include technical qualities, of course, but also others you don't learn at university:

Finding a CFO: the number two in a company can't be just anybody
  • These include liquid skills such as communication, emotional intelligence and creativity. The new collaborative culture and universal nature of today's finance function demand a communicative, empathetic and resilient profile. CFOs must be able to solve problems by thinking “outside the box”.
  • A robust strategic vision for the business. CFOs are increasingly at the side of the CEO in leading the company and must go down to the coalface“” to get a closer look at what is happening. A theoretical profile more comfortable in an office is not enough.
  • Ability to handle mergers and acquisitions (M&A). In today's complex business world, companies are constantly evolving and shareholders want leaders who can drive through mergers and acquisitions. Sometimes companies change their CFOs because of these processes. CFOs must also understand the new shareholding structures and the way investment funds work when they take a stake in a company.

Today's directors already have these characteristics, but CFOs still consider that they need to continue training and growing professionally to keep giving their best. This is their order of priorities:

  • Focus on digital skills and advanced analytics.
  • Train in high-potential programs on how to use systems implemented effectively.
  • Rotate through business divisions to develop new skills.

The relationship between CFOs and other managers in the C-Suite

The structure and functioning of senior management have changed radically. The C-Suite used to be a limited pool where duties were strictly demarcated: if there was an employment problem, it went to Human Resources; if it was about sales, it went to Sales. The structure has now grown as realities arise that relate to new functions, such as data governance, ESG issues and cybersecurity. New C-Level roles have appeared with specialist profiles, without ignoring universality and collaboration.

The strategic CFO must be everywhere. They cannot stay in their office. As a result, more and more CFOs are being seen sitting in on meetings of operating and commercial committees. The problems that companies face today are highly complex and there is always more than one senior manager involved in their diagnosis and resolution. It is impossible to solve the challenges without working together.

The relationship between CFOs and other managers in the C-Suite

A recent Workday report talked ironically about the urgent need to create a new C-Level position: the Chief Collaboration Officer (CCO). Who would take on this responsibility? According to the study, the CFO, of course. Although this proposal was a nod to the orchestral conductor that CFOs are becoming, this global survey by the technology company provided data on the gaps that still exist in that collaboration, particularly in the relationship between two C-Suite heavyweights, the CFO and the CIO.

According to the directors surveyed, the CFO's level of collaboration is not equally fruitful with all of their peers. In general, only a third of the CFOs thought that they had“ perfect communication” with their colleagues in senior management. However, the quality of the relationship varied depending on the role.

For example, 37% of the CFOs recognised “”seamless collaboration with the Head of Sales, but only 27% had the same level of trust with their CIO. 73% of the European CFOs consulted did not understand their CIO, as they speak different languages. This is a challenge that has to be solved when all companies consider it crucial that both of these understand each other and also come together and establish synergies.

But the C-Suite comprises leaders with different working styles, outlooks and priorities who find it difficult to change the way they do things. CFOs are the most aware of this challenge. The survey found that they are concerned about a lack of understanding with some colleagues, particularly CIOs.

How many CFOs consider their relationships with other C-Level managers ideal?

  • 27% with the CIO
  • 31% with the Head of Human Resources
  • 31% with the Chief Operating Officer (COO)
  • 34% with the CEO
  • 35% with the Chief Marketing Officer (CMO)
  • 37% with the Chief Sales Officer (CSO)

The lack of cooperation between the financial and operations areas is particularly concerning. One in five companies say there is no type of collaboration between these two areas, which should understand each other and have common objectives. It is interesting that collaboration between CFOs and CIOs is significantly closer in US companies than European ones.

The most complex position and the one with the most tasks every day

No one said being a CFO was easy in today's world, but it has also never been quite so exciting.

CFOs feel that they are always being asked to do something new. When new data emerges, the financial area is the first to implement it. When systems change and digitisation is pursued, the CFO is responsible for it all. And when ESG issues are being addressed, it is always the CFO who ends up being chosen to drive the change, substantiate the investments, report to the board and find the funds.

Bankinter's major national study in 2022 on the role of the CFO, the Front Line Report, concluded that CFOs are accumulating new front lines. This sometimes requires an increase in their team and the incorporation of multidisciplinary profiles into the financial area. The survey identified the following responsibilities:

  • Collaborate with other departments.
  • Get involved in the company's digitisation.
  • Lead internationalisation.
  • Take responsibility for ESG issues.
  • Innovate with non-financial reporting.
  • Seek alternative forms of financing.
  • Keep up to date with regulatory changes.
  • And always deal with all the traditional work of the financial area.
The most complex position and the one with the most tasks every day

This is what CFOs experience every day in their companies. Combining the old and the new. Leaving behind micro-management (through automation) to focus on more strategic issues. Creating value from data and from their privileged 360-degree overview of the company, envisioning where the company will be in the future. And where they will be at that time.