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5 Ingredients of a Bad CFO

5 Ingredients that Make a Bad CFO

It is no secret that CEOs are looking to the office of the CFO to lead more broadly across departments as well as more actively within the office of the CFO.  The skill set necessary for nay CFO to do so effectively is a universe away from that of what it took to be a successful CFO even 5 years ago.  It is just as critical to understand what makes a bad CFO in today’s world as knowing what it takes to be a good one.

I offer the following as 5 things for CFOs to think about the next time they look in the mirror to consider their effectiveness as a leader:

  • Poor Listening Skills- the best leaders are often the most effective listeners. No one can “do it by themselves” in today’s world. CFOs need to take the time to actively listen to every conversation. If you can’t actively listen then stop a conversation or continue it at a future date. Listening is done in face-face conversations, on conference calls, in virtual meeting, and when reading an e-mail.
  • Poor Communication Skills- CFOs need strong verbal, non-verbal and written communication skills to lead effectively across the enterprise.  Professional development for a CFO should include a component to develop and hone soft skills.  Collaboration is king in leading across the enterprise, those with poor communication skills will not deliver results, and can’t function in the role of Chief Future Officer at their companies. In the past, all it took to be a CFO was to the smartest finance guy, and many, if not most, would rank poor to marginal in terms of communicating internally with staff and colleagues. This requires a  different skill set than the one necessary to communicate effectively with the investment community.
  • Fear of Anyone Knowing More than You- great leaders surround themselves with those who know more than them in certain areas, and are not threatened by the expertise of their colleagues. A great team has experts in every area, not just members who only know as much as the CFO. I once asked a very successful CFO his secret to success, his answer, I always hire people that are smarter than me.
  • Failure to Assemble & Embrace a Multi-Generational Team- there are challenges in leading a team which is comprised of people from multiple generations.  Each generation has a certain skill set that others do not possess. The worst thing a CFO can do is to try and “mold” each person with whom he leads to “be like him or her”. Certain components of generation gaps need to be embraced and leveraged, not feared.
  • Discouraging Failure- mistakes often lead to a path that delivers game changing results.  As conditions become more complex mistake frequency will follow, and the ability to learn from them is what drives long-term success. Those who “berate” anyone on their team or colleagues for making a mistake and failing are doing nothing less than putting obstacles in the road to company success. Human capital is the most valuable asset any company has, and anyone who misuses and abuses it will never realize true success as the CFO.

What traits and behaviors of a CFO do you think derail the success of any finance leader in today’s world?

You can learn more about how to own the role of Chief Future Officer at CFO Dimension 2015.

Comments

Rose Suter
Title: CFO/HR Director
Company: Jay Enterprises, Inc dba: Ashley Furnitu..
(CFO/HR Director, Jay Enterprises, Inc dba: Ashley Furniture HomeSto) |

great points. The days of the bean counters are gone. Today's CFO must have the pulse of the entire organization and be part of the nerve center. Now CFO's have influence across all business lines, so they need a broader range of skills and knowledge. Understand what the numbers means, how they tie into the business metrics, and how to offer counsel to the leaders of the other parts of the body.

michael hofmann
Title: consultant
Company: connor group
(consultant, connor group) |

I agree with Rose, the article has very good points. But there are still many dinosaurs out there in the real world. And when I use the word "dinosaurs" I am not referring to age, but rather attitude. My experience is there are many more bad CFO's than good ones, using your article as a basis of grading.

Stuart Hall
Title: Treasurer/Chief Financial Officer
Company: Haag Engineering Co.
(Treasurer/Chief Financial Officer, Haag Engineering Co.) |

Great reminder of what makes for a great leader. I particularly like the emphasis on the last item. Learning from mistakes and failure can sometimes be the best teacher. I am reminded of the company Tom Peter's discussed in one of his books that "ordered" people to list at least five mistakes that they made each day as a way to promote improvement and learning from experience as well as teamwork.

Topic Expert
Scott MacDonald
Title: President/Owner
Company: AlphaMac Resources, Inc.
(President/Owner, AlphaMac Resources, Inc.) |

Number one to me is having the skills AND life experiences to be in a job with CFO as the title. My biggest pet peeve are job descriptions with the title of CFO which then talk about having to be "detail oriented" and "ability to get into the day to day issues", or have "detail knowledge of XX accounting software". These are clear indications they are looking for an Accounting Manager but want to have someone with the title of CFO.

Thanks for letting me sound off. I feel better. :)

William Johnson
Title: Chief Financial Officer
Company: Aquantapure, LLC (temporary)
(Chief Financial Officer, Aquantapure, LLC (temporary)) |

CFO's need to be able to strongly influence the CEO. Every story is not told by numbers but they tell you what direction to look in.

Being able to simplify a page of numbers into a story that is told so the audience, dept heads, etc. can easily understand the financial position of the company is a required characteristic of a CFO.

Those CFOs who simply recite the variances in an analytic schedule are losing the audience.

Anonymous
(Director-Finance) |

CFOs must have integrity.

Anders Liu-Lindberg
Title: Regional Finance Business Partner
Company: Maersk Line Northern Europe
LinkedIn Profile
(Regional Finance Business Partner, Maersk Line Northern Europe) |

Ernie,
Certainly agree to the points but actually they are valid for all leaders. It starts at the top though so certainly crucial that the CFO doesn't fall into one of these buckets.