Ascent to CFO – charting today’s finance talent career path to the top table
February 2018 | EXPERT BRIEFING | BOARDROOM INTELLIGENCE
At some point in their careers, most finance professionals will have dreamed of becoming a chief financial officer (CFO). But while becoming CFO remains a popular aspiration, it is not easy to achieve and the role itself is changing rapidly.
The days of the one-dimensional CFO ‘number cruncher’ are long gone. CFOs are increasingly expected to possess strong analytical and communication skills to make sense of and explain complicated financial data. They are required to master areas outside finance like regulation, information technology, risk management, business transformation, supply chain management, reporting and human capital management. As the relationship between CFO and chief executive continues to evolve, CFOs must play a more active leadership role, and rethink their usual approaches to overcoming cost pressures, identifying efficiencies and finding new investment opportunities. That places growing demands on their time as well as adding pressure to build new capabilities. It is perhaps no surprise then that today’s CFOs are increasingly taking the lead on digitising critical business activities and relying more and more on technology to transform all the data that processes create into actionable insights.
These new responsibilities present opportunities for future finance leaders to set themselves apart, but many companies are not fully prepared to attract the sort of talent they need. Investment in systems and processes have not yet caught up with the evolving demands of the CFO role, and the skills required to take full advantage of data are not always being addressed in HR priorities.
Developing a technical skillset
In Deloitte’s 2013 Finance Talent Survey, 40 percent of CFOs said they were pessimistic about their ability to meet talent acquisition demands in the future, despite expanding their recruiting strategies.
Since then, there has been a drive to upskill within finance and accounting departments. Given that the median annual salary for a typical CFO stands at £95,000 per year, the rewards for ambitious professionals are clear. What is less clear is the best path to securing tomorrow’s CFO roles.
If being CFO means providing business insights that can shape corporate and sales strategy, the traditional trajectory from CFA, to controller and treasury roles, to finance director and then finally to CFO must involve familiarity with the systems that provide those insights. The modern CFO candidate will need to be able to articulate the risks and benefits of cloud applications and the software as a service (SaaS) model, Big Data analysis, cyber security and other innovations now transforming the finance industry.
The spreadsheet culture that still permeates finance environments is a serious impediment to this. If future CFO candidates need to be au fait with the latest technology, the latest technology has to be present and in everyday use today.
Focusing on cloud expertise
Finance teams utilising the cloud and tools like corporate performance management are in a better position to build their own future stars or recruit top talent, as ambitious finance professionals want to work with the latest technologies to build their data-driven decision-making skills.
Cloud applications are quickly becoming the norm in all business roles. Whether you are an SME or a Fortune 500 company, the move to the cloud seems to be the direction everyone is heading in – and finance is no exception.
There are many proven savings and productivity benefits that the cloud brings, from improved business security to better service availability, from easier compliance requirements satisfaction to IT cost reduction. According to Corps Technologies, 67 percent of IT professionals use cloud services and applications, while cloud deployment is up to 40 times more cost effective, according to Forbes, for an SME, compared to running its own IT system. Crucially, 56 percent of organisations across the board are actively seeking to hire staff with cloud expertise, according to Channel Times.
Looking beyond finance
While it may not be necessary to become experts in IT, finance leaders will have acquired skills around data retrieval, interpretation and analysis. However, digital nous alone will not make you CFO material; this can only ever be an enabler. Looking beyond tools to the experience and perspective required to really utilise financial tech – this is where today’s accountant can really prepare his or herself for the ascent to CFO.
CEOs and boards already expect the CFO to be strategic advisers on how best to grow the business, as well as protecting the bottom line. In five years, as that expectation increases, CFOs will need to demonstrate a more multidisciplinary skill set and broader career experiences, from holding more operational positions to working overseas.
From a career development standpoint, a person whose background is primarily in finance and accounting, or is looking to move up from the controller’s office, will need experience outside of finance. Aspiring CFOs should try and build a well-rounded CV, with lateral as well as progressive career experiences from across the broader spectrum of management.
Wrapping it all up
Roles in finance are already pivoting toward performance management and data analysis, while new responsibilities in scenario planning, modelling and simulation are on the rise. Demonstrating commercial insight fused to digital know-how is critical for aspiring CFOs, who will be expected to guide if not lead outright, wider business initiatives like process reengineering, change management and data governance.
These are the abilities that will be will be most in demand as finance operations continue to become more analytical. Finance teams must invest now in people with the appropriate capabilities who demonstrate the right behaviours to help the business deliver on its strategy. Part of that means supporting current teams with the tools and training to deliver this higher value, more strategically focused insight. For aspiring CFOs, finding work environments where this is the norm will be essential to career success.
Kirit Patel is the regional managing director for the UK and Europe at EOH International. He can be contacted by email: firstname.lastname@example.org.
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