CFO conundrum leadership agility flexibility
Career

Strong hand, gentle grip: the conundrum of the CFO

“There are times when I am so unlike myself that I might be taken for someone else of an entirely opposite character.” ― Jean-Jacques Rousseau

 

Authentic leadership. Be yourself. Be a role model. Have a purpose. Work for your employees. Inspire others. Be a visionary. Being a manager and a leader is many different things to many people. Ask a management guru and they will each give you a very different answer as to what leadership means. In its most simple reflection, leadership is about balancing extremes and knowing how and when to flex and to what end of which extreme. In few jobs is the flexing of extremes as pronounced as the role of the Chief Financial Officer.

 

“The measure of intelligence is the ability to change.” ― Albert Einstein

 

To understand the conundrum of the CFO – the strong hand and gentle grip, – one must start with the definition of a CFO and its evolution over time.

 

What is a CFO?

 

The Chief Financial Officer or CFO of a company has historically been called the number’s person. A decade ago, the CFO was, in reality, the chief accountant and clearly fulfilled this role.

The job of a CFO was to oversee the accounting and financial affairs of the company and comprised the following fundamental and principal tasks :

 

1. Oversee the accounting function and ensure that all the transactions of the company are captured in numerical form so leadership can understand if the company is making money or losing money.

 

2. Make sure the bank account is well managed and properly controlled.

 

3. Help manage the process whereby future numerical forecasts based on the company’s strategy see developed.

 

4. Help manage the company’s stock/inventory or resource that is being sold and ensure it is correctly captured in numerical form in the accounting books.

 

Then the role started expanding and evolving to that of a counselor/adviser and driver of growth :

 

5. Counsel the leadership team on the strategy of the company and the current operating affairs in order to find ways to make more money, be more efficient, agile and effective.

 

6. Participate in the construction of the future strategy of the company and current operating affairs to ensure maximisation of profits for all stakeholders.

 

7. Ensure leaders are hitting their agreed targets and working on ways to outperform them.

 

The CFO is a strategic leader who plays an integral part in motivating teams, setting strategy and driving business growth.

 

So where does the conundrum arise?

 

–Motivating teams and driving them to a common purpose

 

Great leaders make their teams want to rise above themselves to achieve that which was once thought impossible.

 

“Impossible is just a word thrown around by small men who find it easier to live in the world they’ve been given than to explore the power they have to change it.” – Muhammad Ali

 

Leaders inspire and they do this through capturing people’s hearts. One doesn’t drive someone to do something difficult through sheer reasoning or rationale discussion.

People can be made to do things they don’t want to do through force, but the results are short-lived and not sustainable – as history has so clearly shown. A soft grip is needed to inspire teams.

As a part of the leadership team, the CFO has to form part of those who inspire and motivate. Not only the finance team but throughout the organisation.

The CFO needs to have that soft grip, one that is flexible and can be used to gently push and delicately pull, depending on the situation.

 

–Setting business and financial goals and holding people accountable

 

The CFO advises the president and other business leaders on their operations and resource models. Effectively taking a business strategy and turning it into something numerical made out of sales, costs and profits (or losses).

The CFO is a source of recommendations as to the course of actions to take.

Hence the CFO is an active co-constructor of business strategy and business targets. A soft grip with, sometimes, a strong hand are needed in the co-construction process and the CFO needs to constantly shift between these two extremes.

 

As numbers are pervasive throughout the organisations of today and help turn strategy and actions into Profit and Loss statements, so to is the CFO.

And ultimately, even though the CFO may not have ownership of a profit and loss statement, being only a support to the business leaders, the CFO is often held to task in the achievement of those numbers.

In this task the CFO needs to be the strong hand. Ever vigilant of actions that might steer the company away from its financial and other goals.

The CFO needs to also be a taskmaster, holding teams accountable for the targets they signed up to and ensuring the ressource models are adequate and finely tuned to enable successful achievement of those targets.

 

Holding people accountable for things is an opposite of inspiring them to achieve things beyond which they would normally have aspired to.

 

In this construct, the CFO has to embody the flexibility of leadership extremes. Shifting continuously from a gentle grip to a strong hand.

 

–Is the conundrum of the CFO not prevalent throughout the organisation?

 

All leadership is effectively the management and display of extremes. Today one may be strategic and tomorrow operational. Yesterday one might have been forceful and today enabling.

Yet business leaders tend to be more comfortable in one area of the extremes, showing a tendency to favor one versus the other. The CFO doesn’t have the luxury of favoring one extreme.

 

The CFO of today is expected to be everywhere in the organisation and continually shift from strategic to operational and from enabling to forceful while a CEO can happily stay strategic and enabling for long periods at a time.

 

While the conundrum of the CFO may mean a lot of mental gymnastics and probably a very mild more of multiple personalities, it is an extremely fulfilling job.

Don’t be put off by just the numbers side, the role of Chief Money Man is thought provoking, stimulating and very much at the forefront of any business.

 

But next time you bump into your CFO have a little thought for the Dr Jekyll and Mr Hyde lurking inside.

 

The CFO

Leave a Reply, Comment or Anything else that comes to mind

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: