Successful CFOs must have a variety of skills and competencies to steer their companies through choppy financial waters. Some are relevant for all executive positions, and others are specific to the top financial officer.
Skills and competencies that apply to all jobs:
- Know the business. Understand how your company makes money and how all employees contribute to its success. It will help you separate fact from fiction and set proper priorities when you allocate scarce financial resources.
- Be a strategic thinker. Become a student of your company and its industry in order to understand the legal, political, and competitive environment in which it operates.
- Develop communications skills. This skill is essential for all jobs at all levels, but for individuals in executive management, it’s critical. Listen, actively listen to all your stakeholders. Treat people with respect and delegate. Provide your employees broad direction, hold them accountable, and let them do their jobs.
- Possess strategic vision. Look beyond the next hill and the one after that. Make decisions that satisfy current needs but also position your company to take advantage of opportunities that will enhance your company’s portfolio in the long term.
- Develop an innovation mindset. You can’t make good decisions without the right tools. Find the appropriate systems, that put information vital to those decisions, at your fingertips. Discard obsolete or redundant processes. Be ruthless in your quest to identify the most efficient path to the bottom line for every decision.
Skills and competencies that apply specifically to CFOs:
- Be aware of the financial implications of your decisions. First, develop business intelligence to allow you to identify the human costs, brand implications, and long-term vs. short-term consequences of your decisions. Next, recognize the internal and external pressures that do or could potentially affect your business. Finally, anticipate how Wall Street and Main Street stakeholders will react.
- Possess unquestioned integrity. This is true of all jobs, but when you hold the corporate purse strings, uncompromising ethical standards are essential. The optics of every decision should be an important consideration. Avoiding favoritism, personal benefit, and conflicts of interest is vital. The proper balance of ethics and corporate interest must always be the guiding principle.
- Possess accounting, cash management, and financial competence. As with any job, it’s essential to be technically competent. A CFO must integrate this knowledge into each decision considering all relevant factors.
- Possess analytical aptitude. Understanding the numbers of the business should be intuitive. CFOs must proficiently utilize data to maximize profitability, leverage analytics to enhance operational value, and chart a course to future success.
- Practice appropriate risk tolerance. Nothing ventured, nothing gained is an idiom that CFOs understand, but actions should be tempered by all of the elements of decision-making described above. Successful businesses accept intelligent risks to take advantage of available opportunities.
Are you interested in being a CFO? The above-listed skills and competencies don’t come overnight. The typical CFO will have a minimum of ten years of financial experience and five years of management experience. Put in the time and the work, and you can prepare for a top financial position at your company.