Rob Swystun, Pristine Advisers
Nothing stays the same. And that includes the role of the CFO, that bastion of financial wisdom.
Throughout the years, this important role has evolved as much as business itself. As much salespeople as they are actors, they have myriad parts to play within an organization, and even externally, too. Some of these roles have been relatively consistent while others are seemingly in a constant state of flux, whether due to fluctuating economic climate; shifts in organizational leadership; shifts in consumer behavior; maturity of a product line or team personnel or other factors.
Here are the eight recurring roles that CFOs are required to play in an organization in the current US marketplace, as noted by professional recruiter Paul Herrerias.
1. The Quarterback: As heard in phrases like; “You’ll have more duties this year…” Quarterbacks need to be able to take charge, call the shots, delegate effectively, recruit the best team, and communicate continually. This makes today’s CFOs more demanding, but that’s largely because they have more demands placed on them, too. But more demands doesn’t necessarily mean more work, but it usually means meeting the needs of myriad different players like the CEO, the Board of Directors, investors, lenders, society, government, and the general public.
2. The Magician: As heard in phrases like; “Revenue is down…but Profits must go UP!” To many stakeholders in a company, numbers are just funny looking squiggly lines that can be ignored when necessary. And the CFO is often called on to look at a set of numbers that say profit will be down and draw on their Hogwart’s School of Magic education to make it magically rain money in the form of profits; earnings before interest, taxes, depreciation and amortization; and earnings per share.
3. The Diplomat: As heard in phrases like; “Every department head wants their full budget.” Every stakeholder wants something come budget time. VPs want their budget requests fully realized; shareholders want attractive stock prices and dividends; employees want handsome incentives and benefits; customers want low prices, high value and excellent quality; and the boss wants good performance and enough budget to give promotions and bonuses where they are due. This is where the CFO has to dole out the budget in the way that’s best for the company while still trying to keep people who don’t get all of what they want happy.
4. The Financier: As heard in phrases like; “Show me the money!” (Although nobody actually says this.) Everybody is tightening their financial belts. Lenders are tightening up credit requirements, making cash flow more difficult to come by. Vendors have also tightened up their cash flow and even customers are more careful about spending money. The CFO has to deal with all this dwindling cash flow, plus ensure their own organization’s cash flow is adequate.
5. The Ethics Officer: Aka; “Moral Compass, Culture Cop, Values Guru.” CFOs are by no means the only ones in the company who are tasked with upholding the morals and values of a company, but as a senior member, they, along with the CEO, should be leading the way.
6. The Politician: As heard in the phrase; “The CFO speaks for the whole company.” Although many a CFO has not been trained for it, they must be spokespeople to the world at large for their organizations in regards to mergers and acquisitions, financing deals, disasters, bankruptcies, executive hires, succession planning and SEC-mandated announcements, plus more.
7. The Multi-linguist: As in; “Staffing, Financing, Off-shoring…” With the current global marketplace, today’s CFOs have to be versed in a few key languages (not fluently but a native-tongue greeting can go a long way) and cultures. When partnering with operators overseas, hiring candidates with multi-national experience, or floating debt in a foreign market, CFOs should be aware of and functional in multiple languages and customs to make transactions and meetings run as smoothly as possible.
8. The Athlete: As in; “Track shoes on!” More of a marathon runner than a sprinter, the CFO has to be able to go the distance and come out ahead in the competitive marketplace. They’re competing as much for their own jobs as helping their companies to compete in an environment with continually scarcer resources. Generational, global, political, and economic trends are aligning to make the business environment more competitive than it has ever been before, meaning CFOs need to stay mentally, physically, and emotionally fit.
And to top it all off, CFOs need to be aware of when the appropriate time is to play each role, although that will likely come on a subconscious level through experience. This takes a strong degree of self-awareness about which roles they play best and which ones they play worst so they can work on strengthening their weaknesses.
And you could also add psychic to the list of roles, as CFOs also need to be aware of changes coming.
The best CFOs today will be ones who have strong technical and social education, training and competencies.