I speak with many CFOs in my role as executive recruiter, CFO Peer Group facilitator and executive coach. Each CFO, without fail, expresses that they are busy. The scale starts at ‘busy’ and goes all the way to ‘overwhelmed’. 
So I was not surprised to see the results of this recent report from EY. I appreciated this infographic, as it helps to explain why the Chief Financial Officer is feeling overwhelmed and under pressure.
These four survey results identify two areas of pressure facing the CFO today.
- Weak finance team (Ability to delegate, Concern over finance function)
- The day to day gets in the way of the strategic priorities (Tension between old and new, Role stretch)
I showed this graphic to member of my CFO Peer Group, and here is some of the feedback they gave:
Weak finance team
- We have under skilled people in place as we cannot “afford” to recruit at the experience level we need
- The CFO is being asked to cut staff significantly while taking on additional responsibilities and regulatory burdens. This all needs to be performed while changing and upgrading staff to meet more strategic priorities
The day to day gets in the way
- We are so transaction heavy we need more staff to keep up with the day to day
- Under increased pressure to meet compliance demands with no legal or other support
- The CFO often lacks along with his organization an understanding of the business is one I see quite often from business partners
- While there has been an evolution in what else the CFO is responsible for, the CFO is still the defacto compliance officer managing accounting, legal, HR, Facilities, and broad administrative responsibilities.
- The CFO is under tremendous pressure today to “do it all”
I also asked my CFOs what can be done to resolve these pressures. Here are some responses.
- From a CFO disciplinary viewpoint, you need to define the stands where you say: “this is a MUST to have, and this is a NICE to have”.
- Ultimately, the role is CFO is defined by what expectations are.
- The CFO often lacks along with his organization an understanding of the business is one I see quite often from business partners. They just don’t visit customers, spend time with sales or other functions.
As CFO, it is your responsibility to deliver what is expected of you. To do so, you need to get the buy in necessary. While platitudes reign, yet not enough CFOs have the ability to change the expectations. Too many times I hear “this is the way it is – I cannot change it”.
As CFO, you have accepted this job in this environment. Either fix it, or find a more reasonable environment. It may not be the environment that’s the problem, but the person in the mirror who accepts the problem environment.
No one wants to just do the best they can (certainly not you). You want to thrive and achieve more, better, further, faster.
You can fix your team – you just need to have a plan and get buy in. As executive coach for CFOs, I have worked with Chief Financial Officers to help them accomplish this. While not an easy task, it will not get better by itself.
You can move from the day to day to the strategic – you just need to make sure you have the people, process and technology that can take care of the day to day to give you time to be involved with the strategic issues.
Here are my recommended steps to break the cycle:
- Prepare a vision of how you can focus on the strategic while your team properly covers off the day to day.
- Prepare a plan to meet the vision
- Sell the plan (classic change management)
- Implement it
- Deal with exceptions as they happen, yet if exceptions happen regularly, they are no longer exceptions and you need to have the people, process, technology to deal with it.
Sounds simple? It’s not. But unless you are going to tackle this head on, you will be unable to move beyond these challenges and continue to be stuck like most of your peers.
What’s your plan to break the cycle?
My belief is the major trigger behind many of the woes in the Office of the CFO is a complete misunderstanding of the role of the CFO, and that of accounting and finance. This begins with the CEO and the Board and winds its way down throughout the business structure.
The CFO is seen as a cost cutter, a glorified accountant, the chief bean counter. While to some extent these stereotypes have truth, they overtake the job and cause the symptoms described. It is the job of the CFO to expand their role’s understanding so they can perform their job, which maximizes their value, and adds to the organization and the CEO.
From being the partner of the CEO, the go to person for the business, the strategic thinker, the moral compass to empowering sales and marketing to increase sales and market. A good CFO will show that eliminating bodies to save a few dollars is not the intelligent, far-reaching solution; quite the opposite. Every day more and more compliance issues are being heaped upon business and without the correct talent, in both numbers and skill sets, regulatory and other issues will remain un-met with possibly quite expensive consequences.
By re-writing your role at your organization, you will empower yourself with the ability to go on sales calls, sit with purchasing department and your vendors thus truly understanding the business. At the same time, the CFO will be able to create the broad stroke relationships with all the business players; customers, vendors, creditors, investors and employees; which is crucial to what is a CFO.
One cannot be a strategic CFO if they are stuck as a tactical CFO. The tactical can be delegated with the CFO maintaining involvement as the defacto project manager.
So what is the plan? To create a plan and sell it to the Board and CEO (or visa versa). Provide them with excerpts in the literature that agrees with your thesis (there is very little literature that disagrees). Research the CEO marketplace for literature that agrees, dispelling the criticism that you are providing self-serving articles. Prove that your value is not the tactical, but is the strategic. Prove your department can’t be scaled back and populated with skill sets that don’t meet today’s and tomorrow’s needs. Redefine the role and live it.
“Redefine the role and live it.” Love it.
This blog is spot on! I find that the CEO and Board have no real understanding of the difference between a CFO and a Controller — nor the value add a CFO brings. It has been my job to educate them — it remains a big challenge — by not understanding the CFO’s value it is hard to advocate for the resources to implement change and improvements. I have learned to “read” the board better — they seem to respond to risk mitigation — so I clearly and concisely show them the risks we face, the cost of the risks versus the investments needed to mitigate the risk — this has had some success (baby steps to building a stronger finance team). I am the first CFO that this org has had, so the ongoing struggle for them to see the role for what it can be has been frustrating at times, what is obvious to the CFO is not so to the CEO and Board — getting them to listen has been hard — getting necessary resources has been even harder. I often feel I am under-using my skill set and spinning my wheels — Sam has certainly given me great advice on how to work within the environment and change what is possible — when I bring good news, I am viewed as the partner, when there are challenges to address, I am seen as the barrier, the stereotypical “bean counter” who always says “no” — it is very hard to move the needle forward which would make the organization stronger and the role here much more empowering.
Thanks Susan!
Samuel – I am trying to understand why the CFO does not address this during the hiring process. It sounds as if, as is the case at many levels in many industries, the person is so eager to get the position and then so happy when they do get it, they don’t want to rock the boat or risk not being the chosen one.
That being said, it seems to me that the CFO candidate who addresses all of this during the interviewing process, would stand out from the crowd, and position herself/himself as uniquely qualified to contribute from day one.
However, as you have pointed out over the years, it all comes down to the corporate culture. If there is no desire to allocate the money and resources to address and fix these issues from the top, and the prospective new CFO senses this during the interviewing process, AND, they need the job, well the reluctance to speak up is understandable.
Tom,
Let’s just say that marriage is not the same as dating. As I write in my book, Guide to CFO Success, the first 90 days for any CFO is critical to setting the stage for success at their new employer. This is the opportunity for the CFO to set the stage to accomplish great things. If more CFOs spent their first days with the company more effectively, this would be less of an issue in many (but not all) cases. Those CFOs that work with a coach to get the best out of their onboarding have the best chances of to minimize the pressures to come by setting the ground work up front.
Thanks for sharing your insights Tom.
Samuel
CEO’s (in no particular order):
Don’t want to hear bad news
Have a preconceived notion of what the CFO is
With or without a Board, may not know how to work with a CFO
They listen to HR about talent acquisition
For that matter, CFO candidates know this and want the job.
Great post Samuel!
Thank you very much Peter!