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CFO evolution: Navigating the co-pilot role

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Neil Cutting speaks with Amy Luke, a senior director within BIE’s CFO and financial leadership practice, about the steps finance leaders can take to become a key strategic contributor in an organisation.

8th Nov 2023
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The strategic skills required for a CFO is changing as fast as the earth turns. And as they become entrenched in the operational delivery of the business, the CFO becomes more of a co-pilot to the CEO. 

A photo of Amy Luke, a senior director at BIE

This was highlighted in a recent survey by the executive recruitment firm BIE, which found that CFOs are becoming even more critical to the success of a business. The survey with CEOs, non-execs and boards found that the value of the CFO to the business increased, as did the strategic role that they play.

Amy Luke from BIE (left) said that 67% of boards now expect the CFO to be a strategic contributor to the overall success of the business. 

Catalyst for change

She said CFOs working in this “co-pilot” role are helping chief executives to evolve and execute their ideas but also having “credibility and confidence to challenge and make sure they’re making the best decisions for the business”.

However, those moving up the ranks and building their career in finance are often concentrating on gaining experience in reporting, budgeting, commercial finance, cash management and other typical finance function tasks, but when they eventually ascend to board level they’re suddenly expected to have much wider exposure to the rest of the business. 

Luke said that CFOs suddenly become very involved in HR issues, marketing, procurement or supply-chain decisions, with 90% eventually ending up with responsibilities outside of finance. Budding CFOs, therefore, have to go on their own transformation journey in order to become the co-pilot that is now expected of them. 

Assess the gaps

Luke described the CFO transformation process as evolving from being “inward” and being the one to control the key performance indicators in an organisation to becoming “much more outwards”, working with the CEO. 

“In order to be strategic, finance professionals really need to understand the world they operate in,” said Luke. “This is where it moves from being heads down in the business, to trying to understand what the broader competitive landscape looks like, what the opportunities are, and what the threats are.” 

One of the best ways of doing that is to not only get broad finance experience but also gain experience in other departments such as operations, sales and transformation, to provide individuals with different perspectives. Luke described it as “moving sideways to go forwards’’. 

Luke said that when people try to progress in their careers, and climb the corporate ladder as quickly as possible, they can be blinded by the prospect of a higher salary and the cachet of having the CFO job title. 

She then contrasted this to FTSE-listed CFOs, who spend their time building up good experience in divisional roles, where they’re often working with the managing director and leading projects.  

“They then have three to five years’ experience in different areas of the business where they can show that they have got to grips with the key issues, and driven tangible improvements,” she said. 

This will be hugely beneficial once they’re in a more strategic role, where CFOs are more and more involved in topics such as environmental, social and governance reporting requirements, what that means for the business and how they can integrate it across the company. Luke said that developing broader experiences and perspectives will mean CFOs can ensure “it’s not just a reporting requirement, but actually integrated into the business to drive appropriate change and add value”.

This all ties back to being a safe pair of hands. “When a board appoints you, they’re going to want to know that you are a trusted person,” said Luke. “The more solid a platform you can build, the better candidate you’ll be.”

Meeting the desired state

Another example of CFOs being more “outwards” is by being more authentic in their leadership. “The idea of an ivory tower CFO is quite archaic in today’s world, where they’re expected to be more accessible and engaged with their employees,” she said. “Authentic leaders put their employees at the heart of the business.”

Due to their analytical nature, CFOs are often seen as a bit colder and clinical, whereas CEOs typically align with the more empowering and inclusive traits of driving actions and decisions, while nurturing and developing those around them.

Luke recommends those aspiring to become a strategic CFO to spend time thinking about themselves as a leader and focus on ways they can develop. One way to get a better understanding of how you tick is to undertake some psychometric testing. The aim of the test is to not make you into something you’re not, but to understand what your blind spots are and how to combat them.  

Luke doesn’t think aspiring CFOs should stop there. She also recommends getting 360-degree feedback from across the business and finding an external mentor. “I think it is really important for someone to hold a mirror up to you and say these are the areas you could develop to become a stronger leader,” she said. 

Evaluate and improve

Once CFOs complete the transition from an inwards to an outwards thinking, strategic CFO they will be far better placed to drive successful transformation across an organisation. 

“Businesses want people who can deliver change. So you have to be able to show that you’re that person, by putting your hand up to do it, and delivering it,” said Luke. “You have to build relationships and build trust.” 

She said leadership skills become even more important when you start “digging up the weeds of the business” and discover that “things aren’t as straightforward as you thought they were going to be”. 

She added, “Transformation can be very easy on paper, but then the challenges arise during the execution of it and that’s where it becomes far harder, because it’s actually out there in the real world,” she said. 

That’s why it’s important to continuously develop your emotional intelligence and keep your people engaged. This means being empathetic with people and understanding their concerns. Luke said successful CFOs can achieve this through surveys, Q&A forums and keeping the “regular drum beat of communication around a project”.

Ultimately, if aspiring CFOs are able to go on their own transformation journey they will have the skills to succeed as a CFO in today’s business landscape. By broadening their experience outside of just the finance function, understanding how to be a more authentic leader, and engaging people during times of change they will be the “safe pair of hands” organisations want in a CFO.    

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