The chief financial officer (CFO) plays a critical role in any major organization. The specific duties of a CFO can vary somewhat from one company to the next. However, in general, a CFO is tasked primarily with ensuring an organization remains financially strong.
It’s also worth noting that the nature of a CFO’s role within a company is changing throughout various industries. Across many companies, CFOs are becoming involved in duties and aspects of the organization where they traditionally have not had influence. If you own a company, it’s important to understand precisely how these changes are coming about. You’ll want to know which qualities to prioritize when hiring a new CFO. Even if your company ultimately decides to outsource its CFO, you will still want to make sure that whoever you work with is solid in the three categories listed below.
Understanding these developments is also critical if you aspire to become a CFO. Along with preparing for your future career by taking such steps as applying for scholarships in finance, networking with others, and performing well academically, you can ensure you stand out to potential future employers by cultivating the qualities CFOs must possess in today’s landscape.
A Competent CFO Will Understand and Positively Impact Company Culture
The culture of any company or organization consists of many elements. These include a company’s overall values, emphasis on ongoing learning, policies regarding employee conduct, and even the nature of the office environment.
Developing a strong culture has typically been the responsibility of a CEO and/or HR department. In recent years, however, it’s become increasingly common for CFOs to be involved in developing organizational culture as well.
For example, sometimes CFOs will request departments or divisions within a company to provide information. This is essentially adding a new task to their workload. These requests can show up without considering how much extra time those involved in addressing this request will need to spend on the task. Other managers and leaders may make similar mistakes. If this error is common at an organization, employees may not be properly compensated for their extra work. A lack of trust in leadership will be the natural result. This will naturally reduce engagement.
CFOs can help guard against that by fostering increased collaboration. They will want to ensure that leaders account for the extra time employees spend complying with new requests. Ensuring fairness in compensation will, in turn, result in a stronger culture. That’s just one example.
In general, when hiring CFOs, business owners need to look for candidates who understand their culture. CFO candidates also need to appreciate their future role in shaping it. Any candidate you interview for the CFO position must demonstrate a willingness to understand and improve overall company culture.
CFOs Should Display a Willingness to Embrace Innovation
Newer technologies, such as artificial intelligence (AI), can be incorporated into a company’s finances in various ways. High-speed analysis of financial data as a tool for developing strategies for organizational growth often falls to the CFO. A well-implemented AI program can handle this task for a CFO by compiling and analyzing data much more efficiently than in the past. CFOs need to be willing to embrace these innovations.
Anyone aspiring to be a CFO must be someone who not only understands how AI (and similar new tools) will change the nature of their role. They must also appreciate how these changes will make it necessary for them to cultivate the skills required to handle tasks that involve more creative thinking. Applying the lessons learned from data analysis to develop a proper financial strategy would be just one example of this. Any potential CFO whose first response to newer tech is suspicion and reluctance is throwing a huge red flag.
Effective Execs Maintain an Emphasis on Mentoring, Coaching, and Recruiting
Today’s CFO plays a role in recruitment, at least to some degree. This is particularly true when a company is hiring new employees who will work directly with or under the CFO.
Many business owners have found that it’s becoming even more common for CFOs to have qualities that support hiring new team members. This may be at least partially due to CFOs having more time for such tasks thanks to AI boosting their efficiency. Additionally, along with hiring new workers, CFOs are also becoming more involved in training and mentoring. A strong CFO must now be someone who has the skills needed to both identify talent and help employees thrive.
Whether you’re planning to hire a CFO or become one yourself, keeping these three points foremost in your thinking will prove critical. Once a fairly siloed profession, the role of the CFO is constantly changing. Both business owners and prospective CFOs can adapt accordingly by prioritizing these three traits.