We took a look at what Gartner has found, and we were honestly surprised:
- Only one in every five CFOs can be considered as personally effective.
- Underinvesting themselves in activities where they need to give 100% of themselves.
- At the same time, they spend at least an hour every day on the activities which matter very little for their position and what they need to achieve for their organization.
- A truly effective CFO is always connected to the performance of all business units.
- A genuinely effective CFO is an equal and strategic partner to the CEO.
- A truly effective CFO cares for the customers.
- By striving to replicate the best finance leadership practices in personal time management.
That’s only 22% of all CFOs. Such a small number was obtained by basing this effectiveness on the correlation between the CFO’s organization and dynamic growth behaviors. In other words, dynamic growth means sustained, long-term growth of revenues with margin improvements at the same time.
What do they mean by all of this?
They want to say that there are so many CFOs who try to do everything the best way they can, but they fail to realize that they are wasting time. The thing here is that truly effective CFOs don’t need to do everything better – on the contrary, they only need to do specific things in the best way they can.
What we at Consero have found is that so many CFOs, especially those in large corporations and growth companies, waste time. They do that by:
The problem here lies in the fact that the modern position of the chief financial officer has changed dramatically.
The role of the CFO has overextended, and CEOs and other executives expect the CFOs to do a lot. They are thus always under pressure to perform well in many responsibilities that they have.
The problem here is that trying to do everything better is not the way to do things when you’re the CFO of a growing business – and it certainly isn’t the way to increase your effectiveness.
There are two critical levers here:
- How CFOs manage their posture and the relationships they have in their company.
- Which activities they tend to prioritize when planning their time.
So, how does a CFO change these two critical levers for the better? What should a CFO do to become personally effective?
We’ve identified three different areas which tend to be responsible for effectiveness among CFOs. Have in mind that these areas are precisely where most effective CFOs excel.
How a CFO can become personally effective by making three fundamental changes
This means that the CFO is connected to the performance of the entire business and doesn’t just spend most of their time in the finance department – which was something the traditional role of the CFO entailed.
A CFO no longer needs to remain connected to this single department as that no longer creates personal effectiveness in the modern era.
The modern CFO now needs to stay in touch with all units by:
- Building strong relationships with managers from all units.
- Being responsible for metrics related to each of the units’ performances.
- Getting direct reports.
All of this may sound like a lot, but once done several times, it quickly becomes an effective and streamlined process.
The modern CFO who strives to be personally effective needs to be the right hand to the CEO of the company. Only by being that can they provide the strategic knowledge and insight the CEO needs for making better business decisions.
That also means that the CFO needs to be open to trying out different things and different roles in the company – something that was previously an unknown area for them.
The times of sitting behind a desk and checking hundreds of numbers are done. Today the CFO deals with people – with the CEO, the board, the unit managers, and also the customers.
Naturally, the CFO doesn’t need to spend a lot of their time with every customer physically, but they do need to allocate some time to the responsibility of making customers happy.
They can do all of this by having a strong customer focus, which entails prioritizing their relationships with the heads of sales and improving the pricing strategy whenever they can. The key to this is to be proactive.
What other CFOs do
Now, even though there are still too many CFOs who haven’t reached a higher level of personal effectiveness, there are those who are aware of the mistakes they are making.
These CFOs are actively working towards being more productive with their time and focusing on the areas where they need to be focused.
How they do this?
There are several of these practices which result in focusing on the top priorities you have – the ones that make the most positive impact on your job performance.
We’ve decided to show you three, which tend to have the most significant impact of them all:
- The top CFOs make sure that all the activities they have are highly prioritized according to their importance. They make sure that the most important and complex ones have enough allocated time in their calendars.
- These CFOs try to be transparent – which is not a trait that many CFOs are known to have, even though they are and need to be great at team management. The personally effective CFOs rectify this by announcing their priorities to the entire team, which allows them to improve the focus of the whole team and to quickly decline tasks that don’t align with the established priorities.
- Every highly effective CFO learns from their mistakes by reviewing what they did and comparing the actual performance to the plan they had. By doing this, CFOs can find where they deviated from the established procedure and can thus easily make improvements for the future.
By trying out these practices and heeding the advice we’ve given you here, you will be on your way to becoming one of the few genuinely effective CFOs – the top 22%.
