Value Creation and the Strategic CFO

October 9, 2013

One of the easiest ways to identify a strategic CFO is simply by listening to the way peers and business unit leaders speak of him or her. Is the comment, “I need to get something past my CFO?” Or is it: “Let’s bring in our CFO to get perspective on how we best solve this challenge?”

Organizations need CFOs who create and add value. CFOs who are leaders first, technicians second. Strategists, risk managers and value creators, not parole officers.

Two colleagues and I spent four hours this past Sunday leading a private discussion at CFO Magazine’s annual large-company conference. In a wide-ranging session with 34 Chief Financial Officers, we discussed on-the-job development of CFOs as leaders, emphasizing both the strategic and the commercial. Emerging from that conversation, I was struck by the energy and commitment with which those CFOs demonstrated a determination to raise their games.

While many themes emerged, three insights were of particular note:

Finally, the context for these insights is unprecedented. Fewer companies have Chief Operating Officers than before, increasing the responsibilities of the CFO. As Boomers retire, rate of replacement increases: 20% of US CEOs and 15% of global CEOs turned over last year, as did 14.4% of global CFO positions. Moreover, research shows that the CFO turnover rate reaches higher percentages (17-20%) in times of economic prosperity, and as Boomers rotate out of the C-Suite, those percentages will only increase. This means that younger leadership, technically brilliant and perhaps more comfortable with ambiguity and volatility than prior generations, will nonetheless face a series of strategic business and commercial challenges which they have never personally encountered.

For those CFOs in Arizona – and across the globe – both the challenge and opportunity is to invest more carefully in their own development: broader commercial exposure to compliment technical skills; better investment in personal awareness and executive presence; and a focused emphasis on developing team skills, so that Finance stands out as a pillar of business strength within the organization, rather than as an enabling function.

What was exciting to my colleagues and me, walking away from Phoenix, was the degree to which this new generation of CFOs has, in addition to aptitude, a hunger: they want to raise not only the game of Finance within their organizations, but also their own contributions as individuals and as leaders.

Click the link to view our recent blog: Sticking to Values, or check back for more on business leadership, team development, and thought leadership.

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