CFOs fall in love, but do not get married. The emotional connection with their company.
A CFO aligned with the company's values and with an undisguised pride of belonging. This is the sketch we can extract from a careful reading of the annual CFO Forum barometer. Unsurprisingly, the report's presentation at the Bankinter headquarters was attended by several active CFOs, who were invited to elaborate on their professional profile and their concerns: they did not talk about themselves, but about their companies.
A new financial indicator: Emotional Engagement Index (EEI)
We all know the Net Promoter Score (NPS): the indicator for a customer's degree of satisfaction and loyalty. Inspired by that index, the CFO Frontline Report has designed a way to measure the emotional connection of CFOs with their organisation: the EEI, Emotional Engagement Index.
The barometer's methodology starts from a global NPS of 63.84%. From there, it gauges what statements about their company the respondents feel more or less identified with. These are the two statements that aroused the greatest support.
Is The Great Resignation reaching the Finance area?
The age of employee turnover. The great resignation. Quiet quitting. These are buzzwords coming from the United States. The pandemic and so many years of uncertainty have taken their toll on employees with their companies. You might even say that these are not times of engagement.
And CFOs are no exception, as we have seen in other articles in the CFO Forum, where we analysed their succession plan or the complexity of their job within the C-Level, with increasingly extensive tasks and sometimes unbearable pressure.
According to the American magazine Global Trade, CFO turnover is growing. It's not yet clear why CFOs are leaving and looking for new opportunities. If we look at the historical numbers, in 2019, 14% of CFOs resigned from S&P 500 companies. In 2020, the percentage went up to 15%. And in 2021 to 18%.
In other words, almost one in five CFOs changes companies each year in large businesses. According to Global Trade, the average tenure of a CFO is 5 years.. And turnover is as fast as it is expensive, since this is such a difficult position to fill.
Recently, the financial sector has been talking about an article in Fortune magazine by the former CFO of Pfizer, Frank D'Amelio, who has resigned after 15 years in that role and a successful career at AT&T and Lucent Technologies. D'Amelio raises the questions a CFO or aspiring CFO should be asking. If you answer "no" to the majority, you are perhaps not happy in your position or maybe your current job is not what you are looking for in life.
Are you ready?
For the former CFO of Pfizer, a CFO must be leadership material, have solid financial knowledge and a strategic vision. If one of the three vertices fails, they cannot and should not be a CFO.
Do you feel some self-confidence?
CFOs have to think that they are prepared for the position, believe in their strengths. There is no better test than asking the people with whom we have worked and who have supported us if they see us as the right person to be the “number two” of the company. They are the best at assessing us.
Do we really want the job?
Is it really the position you want? Most likely, you will work as a CFO all your life, in one company or another, so you may already like it, says Frank D'Amelio. “This job is always in demand, AND it demands sacrifice. But, to be honest, I've enjoyed every minute that I've been a CFO”, emphasises the pharmaceutical company's former CFO.
Know how to weather the winds?
The veteran CFO talks about the CFO's ability to move when there is a tailwind, but also when it comes from the front. For him, personally, it was easy to take the job because of his vast prior knowledge of the company and its staff. The problem came when he realised that, with an Operations background, he was a complete stranger in the world of investors, analysts, audit committees and rating agencies. Getting a foothold in was very hard. He managed it thanks to his communication skills.
“You need to develop other skills to be on the front line of battle”
Frank D'Amelio says in Fortune that if he had to change something about his career, he would have liked to know more about technology. With that skill, his life would have been different.
CFOs believe that a holistic view of the job is increasingly important. It is about taking into account the values and the human side. After talking to 144 Spanish CFOs, the Bankinter barometer drew up a ranking of the strengths required by the new financial management profile which is being developed:
- Leadership based on experience.
- Transversal vision of the business.
- Innovation and creativity.
- Resilience as the axis of their strategy.
- High technological profile.
Iratxe Pardo, Finance and Treasury Director of CIE Automotive, participated in the presentation of the Frontline Report and shared the experience of a more decentralised and less hierarchical model of Finance area. “It makes us more resilient”.
In the words of Julio Antoranz, CFO of the Domingo Alonso Group, the terrible moments that the world has experienced have been a learning experience for the financial function. “We have had a perfect storm for 3 years, continuous crisis, but it has made us better. It has kept always on guard and ready for everything”.