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Together, CFOs and CEOs Create A “Can Do” Culture

To anyone perpetuating the misconceptions that CFOs are accountants, bean counters or number crunchers – among many other outdated stereotypes – it’s time to put them to rest. To the CFO community, these are all but laughable characterizations, reminiscent of a time when CFOs only played an advisory role to the CEO.

Over the last 10 years, the quintessential CFO has been completely redefined. The modern CFO has become the CEO’s strategic partner, emerging as an action-oriented leader with the power and insights to make big decisions.

Countless CFOs have embraced this grab the bull by the horns mentality, resulting in a dynamic role where the CFO is taking action and forging initiatives that have historically been left to other executives, such as the COO or CEO.

Carol Tomé of Home Depot, for example, has championed a number of strategic initiatives since the early 2000s. She slowed new store openings from one every 48 hours to two per year in order to invest in technology, employees and operating efficiencies. Similarly, Mark Loughridge at IBM is credited with simplifying IBM’s message and developing a clear vision for the company to help investors and customers understand what IBM’s future would hold after selling its PC business. Last year, Starbucks CFO Troy Alstead took on additional responsibilities as group president of Global Business Services, expanding his role. In this new position, he assumed duties that include overseeing global financial, technology and supply chain operations.

Figure 8 - Amex report June 2014

Copyright © 2014 CFO Publishing LLC

As these power moves continue, the dynamic between the CEO and CFO is changing significantly. According to the seventh annual American Express/CFO Research Global Business & Spending Monitor, 92% of CEOs rely on CFOs to be either an influential or determining factor in operational decisions for the company.

Traditionally, CFOs would step in at a much later point in the decision-making process, acting as an ad hoc advisor. However, given the unique level of understanding CFOs have of the company, it makes sense that CEOs would tap CFOs as a key decision maker, or at least maintain a higher level of integration.

Since 2008, this relationship has really kicked into high gear. Still shaking off some of the post-recession paranoia, companies are hyper-aware of the need to balance costs in what is still considered an uncertain economic environment. So, in an effort to make every dollar count, CFOs are heading up strategy themselves, and are now weighing in very early on in the decision-making process.

In our research, we found that companies increasingly view CFOs as a catalyst that moves the business forward. When CEOs and CFOs come together, it promotes a “can do” culture within the company, as they are able to troubleshoot and align on the best course of action in real time. Looking to the future, CFOs will continue to work with CEOs more closely and stretch past their normal functional boundaries in order to add new value across the business.

 

By Shane Berry, Senior Vice President and General Manager, Global Client Group, Global Corporate Payments, American Express Company

Comments

EMERSON GALFO
Title: CFO
Company: C-Suite Services
LinkedIn Profile
(CFO, C-Suite Services) |

Samuel, if you were writing the job specs for an opening that needed these CFO skills , how will you write/describe them ? I see a lot of "outdated" stereotypes and they are STILL ingrained in most job requirement postings. And yes, these include postings that are being handled by big name recruiting firms! Should recruiters/recruitment firms deserve the "blame" for perpetuating the outdated sterotypes? If you were working with a CEO and you see a disconnect between what he says he needs and what is said in his job posting requirements (that also includes the "outdated" requirements), what do recruiters (you?) do??

This quote is on my LinkedIn profile and poster in my office:

"Aut viam inveniam aut faciam" .......I'll either find a way or make one! (attributed to Hannibal; when his generals told him it was impossible to cross the Alps by elephant).

Topic Expert
Samuel Dergel
Title: Director - Executive Search
Company: Stanton Chase International
LinkedIn Profile
(Director - Executive Search, Stanton Chase International) |

Emerson,

When the client is paying, the client is always right. (Or, we could choose not to do the work).

In recruitment (as in most businesses) there are "A" Clients, "B" Clients and "C" Clients. A's, B's and C's all have the right to have the talent that is the right fit for them. A's deserve A's, B's deserve B's, and C's deserve C's. A "C" company is not ready for an "A" CFO. I am always interested in working with A's and B's, while thankfully C's are afraid of what I charge.

In my role working with my clients, I help them with properly defining their need. It is at this point that I work with my client to define these needs. These are the client needs - not mine. My goal is to help them come to the best need for them, but it is driven by the client. Only once this need is defined am I able to start the rest of the search process.

I have never seen 2 CFO Searches that were the same. This is because companies, like CFOs themselves, are unique, and have different strengths.

Too many times companies try to make a square peg fit into a round hole.

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

Samuel,

To amplify Emerson's question...

Given: Your fee is paid up-front and is non-refundable. There is no consequence to your actions, it's done from a anonymously.

Would your advice to the client remain the same or be different? Would the same job spec be produced?

Topic Expert
Samuel Dergel
Title: Director - Executive Search
Company: Stanton Chase International
LinkedIn Profile
(Director - Executive Search, Stanton Chase International) |

Wayne,

I'm not sure what you mean about 'no consequences' and 'anonymously'.

Yes, in retained search, the retainer portion of our fee is upfront. This is required to show that the company is serious about the search, and gains commitment from the retained executive search firm to do the work necessary to fill the need.

Any type of consultant will tell you that you can only assist the client, not change the client's way of thinking. Same holds true in executive search consulting work.

Our advice at the beginning of the search process is based on an assessment of the need of the client. We do not make up what we think the client needs. Rather, we help our client better assess what they need by asking the right questions and providing information and insights gained from our experience.

I think you are getting too hung up on the job description. Surely it is an important document, but it is only a starting point. The entire search process, from beginning to end, is influenced by the intangibles, both on the company side and the candidate side.

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

Just to answer 'no consequences' and 'anonymously'.

As you said, our work is "...influenced by the intangibles..." One of those are preserving our reputation should we provide services that are outside the clients comfort zone. Being innovative (about anything, not just hiring) can be shunned and word of mouth of bad service spreads faster than good service.

Thus, I removed that obstacle (telling the client a brutally honest assessment) to the question.

Example, I told a client the only way he was going to survive was either cut his draw dramatically for several years or double his business and cut his draw (less dramatically) for maybe 18 months.

Cutting his draw was not what he wanted to hear and the relationship ended, for there was nothing more I could accomplish.

David Belgum
Title: CFO
Company: LeoNovus, Inc.
(CFO, LeoNovus, Inc.) |

Thanks Samuel for affirming the impact a CFO, working with the CEO can have on an organization. A great opportunity for CFO's through their actions, tone and words to move beyond traditional stereotypes.

Akash Sud
Title: Finance Director - Lone Rock Technology ..
Company: Consero Global Solutions
(Finance Director - Lone Rock Technology Group, Consero Global Solutions) |

I concur with your views in this article. I've worked for 3 CFO's in the last 5 years and they all practiced a lot of what you have stated in your article. Definitely good learnings for current and potential CFO's.

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