The Chief Financial Officer (CFO) plays a pivotal role for their organization – they are typically seen as the second most important person in a company, and oftentimes find themselves having to juggle enterprise transformational dynamics, lead functional business partner teams, as well as pursue their own personal goals.
The problem that many companies end up facing, however, is that when they hire or internally promote a leader to CFO, there is an expectation that this person will already know how to do everything that is required of them. However, in reality, while their technical knowledge is no doubt there, having the skills to actually be a strategic transformational executive do not just appear overnight.
My consulting research has found that the average tenure of a CFO is only 4.4 years, which is alarmingly low. And a reason for this is because over 60% of CFOs are first-timers, with nearly two-thirds of those being internally promoted. What this suggests is that a lot of those entering into a strategic CFO role are doing so for the first time, and with limited day-to-day thought partnering. In order to ensure their success and foster the organization’s strategic objectives, companies need to be investing in them from the offset and continuously.
Organizations need to create formal support strategies that are aimed at professionally developing their CFOs. By having structured support for those first-timers, the overwhelm and eventual plight of becoming a strategic CFO will be mitigated significantly. This will make the executive better at their job in a faster manner, and increase the likelihood of retention in the future.
The fact is, gaining an in-depth understanding of the company’s priorities, its investors, external stakeholders, fellow senior leaders, and their team – as well as proactively building relationships with all these parties – can be a lot for someone who hasn’t before navigated the complexities of the CFO experience. Employers need to let go of this predisposition that being promoted to an executive automatically means someone knows how to be a successful strategic CFO– there is a gap between the two, and the way of bridging this gap is specialized advisory support.
And this doesn’t just mean generalized support on leadership skills, but rather specified advisory being provided by someone who understands the intricacies of a CFO role. Someone who has a grasp of the dynamics and challenges that will be faced on a day-to-day basis.
Finding the perfect CFO for your company is an important decision, so when you do find that person, be sure to take the time to invest in them to ensure the success of them and of your business. This will lead to a stronger leadership team with a confident and successful CFO who will go on to do great things – companies just need to be creating that foundation for them to build on.
If you would like to discuss the CFO Success advisory support services we can offer for your CFO, please get in contact with me at firstname.lastname@example.org