Over half of my working-career I have been a CFO, graduated to a CEO role about half-a-decade ago. When I was not a finance chief, I wondered if someone would let me know the golden-rules to become one. Then on being vested with the CFO seat, I fancied for the coveted corner office chair, and wondered how to get there!
These must be the dreams of most of us — we all want to progress up the corporate ladder. But all of us eventually find that the going gets tougher as we keep climbing up the organizational pyramid structure.
So let me share a few tips which you may follow to become a CFO; and on having become one – how to successfully retain it.
Needless to mention, it is assumed that you are good technically, having sound job and subject knowledge. Ability to go beyond the numbers will be crucial. Without this basic stuff, nothing will work.
How to be a CFO?
- Uncluttered thought:Declutter your thinking, especially with problems in hand, provide simple probable solutions. Convoluted, long-wounded and roundabout arguments will just not help. If you are not clear of the problem in hand, go back to the drawing board and do not make hazard guesses.
- Accounting and auditing is not everything: Business is a lot more than accounting and auditing functions. It involves the complete value chain – from procurement to making, then marketing, sales and collections. In service industry, the value chain could be a bit different though basics will still be similar. Therefore, the finance manager must take a 360-degree view and not just get stuck in mere numbers.
- Communication is supreme:You should be able to communicate clearly and simply in both verbal and written way. There is no organisation that needs a Shakespeare amongst them. But they also cannot afford their finance chief being unable to construct reasonably good reports.
- Positivity is positive:Being finance professionals, we often argue on the small stuff — lack of controls in operations makes us angry; inaccuracies in figures and statements, raise annoyances. But, unless you show empathy and positive attitude, you are unlikely to be considered for the big job.
- Good health and demeanor: You need not be the Mr. India, but you need to be fit. Cannot blame heavy work for not being able to hit the gym. Just walking or doing yoga, may not be good enough. Plus, do not look shabby and scruffy – that’s not what corporates appreciate.
How to be a successful CFO?
Having got the job of a CFO, the more difficult part is to retain it. You will need to evolve from focusing on bean-counting, compliance and control to planning, strategizing and partnering. The searchlights will always be on you — every day is an examination day.
- CEO relationship is kingly:CFOs are often the number two of any set up. Unless the numero-uno – the CEO and the CFO – has a good working relationship, no organisation can flourish. The CFO has to necessarily have the trust and confidence of the CEO. A good understanding amongst the two will help immensely.
- Board is not border-line:There have been many instances when CFOs have been shown the door when they could not keep the Board informed of difficult developments. Maintaining a congenial relationship with the Board is important. The CFO must understand that most Board members will not be from the finance fraternity, and hence they may not be numeric in their approach. Explaining them business nuances in simple terms, is vital.
- Motivational motivator: A leader needs to motivate others to perform. Every organisation will go through ups and downs – business is always like a roller coaster – but the CFO needs to balance the upward swing and steady the ship when downward swipes happen.
- Macro view:While finance and accounting jobs involve a lot of micro number management, it is the CFO who gets to see the big picture. Thus, the CFO should be able to present a holistic depiction of the business developments to the CEO and the Board. This enables proper decision making at the top level.
- Presentable presentations: CFO being the flag bearer of an organisation, ability to present the company picture lucidly and yet fairly, is crucial. Verbal explanations of chart contents and clear answers to questions raised, are vital. Crisp, clear and ship-shape, is the corner-stone of a good presentation.
- Talent is not latent:CFO is the leader of an organisation. Every business need to have a good talent pool. Encouraging and nurturing human resource is crucial. And when insider sources cannot provide it, outside avenues need to be explored. The CFO must help the CEO to maintain the pipeline of good talent. Please note: we are as good as our people; and the CFO should help to make it happen.
- Endurance and ethics:Why do some companies last for centuries but most do not? Short cuts and cutting corners result in the end of endurance. Pain may have to be taken for righteousness, but it ultimately pays-off. Businesses are meant to make profits. But when surpluses are generated by hook or by crook, problems arise. Cheating is fine, till one gets caught – and more often than not, the truth catches up sooner than later.
The list is not comprehensive. But the guidelines include some common stuffs which many of us, the financial managers, miss out while chasing the golden goose.
In essence, CFOs are partners in the progress of a business. It is usually the second hottest seat in an organisation. With power comes responsibilities. A good CFO ultimately should behave as the de-facto CEO.
Take up the CFO challenge, behave as if the business belongs to you, motivate and guide others, and keep yourself grounded – success is bound to ascend – whether you are the CFO or the one sitting on the wings to become one.