If you’re looking for a new chief financial officer (CFO) who’s primed to take your company to the next level, you need to make sure that your top pick has the skills necessary in today’s business climate. The importance of a modern CFO can’t be underscored enough, as they can put a sustainable financial strategy into place that keeps your company healthy financially for years to come.
The roles of a CFO are complex, with many changes evolving throughout the years. For example, CFOs and CEOs have developed a more intertwined relationship that requires the CFO to take a more active role in leadership. Additionally, the increasing availability of complex data and evolved risk management strategies has broadened the skill set CFOs need to have at their disposal. The modern CFO possesses a strategic mind, a head for analytics and strong interpersonal skills.
As you evaluate candidates, you need to know about the top three skills that relate to the role of a CFO in modern times to ensure that you’re getting a high-level candidate.
Top Three Chief Financial Officer Skills
Of all of the CFO qualifications you’ll be looking for in the hiring process, a modern CFO should be well-versed in risk management, data analysis and leadership. Below you can find out more about the three main qualities top-performing CFOs possess:
1. Risk Management
Any business is going to experience some risk. Whether that risk comes from finances, operations, IT or a variety of other sectors, a company needs someone who can evaluate risk and determine what course of action a company should take. A top skill of a CFO is the ability to manage and mitigate risk wherever they can find it.
The best CFOs follow a few practices to manage risk. At first, a CFO works with team members within the organization to understand the type and scope of risk currently facing the company. After determining the types of risk, a CFO should be able to evaluate them by developing several estimates that predict how likely it is for those risks to occur, as well as the projected impact from the risks.
The final step a CFO should take to manage risk is to create processes where the CFO is kept informed of the company’s current risk exposure and knows if early warning signs pop up that signal a new risk arising. Additionally, the CFO should know how to look for new risks to help the company stay one step ahead.
An example of a CFO facing risk could be when an organization decides to move their operations to the cloud, providing several benefits to a company but also opening up the company to cyber threats and data breaches. Before going forward with the move to the cloud, a CFO would need to understand the scope of risks and assess if that risk is worth it. If they determine it is, they should set up processes that mitigate said risk.
2. Data Analysis
One of the most impactful business developments in recent memory is the arrival of big data. This kind of data puts crucial information into the hands of companies. With this info, CFOs can find areas where their companies can improve, craft data-driven strategies and keep up to date with a project’s performance, to name only a few uses of analytics.
Data often needs someone with expertise to evaluate and read it properly. A savvy CFO knows how to clarify and then interpret that data so their team can use it for actionable strategies and actions. As the CFO, they should know almost everything about the company, so experience working with data and using it to improve a company’s operations is a must.
Much of a CFO’s time is spent evaluating data and working with data scientists to determine how the analytics can be used. As they work with data experts and then communicate that data to other teams to help them see why they should consider a new strategy, a CFO needs to speak the language of analytics while simplifying it for everyday employees to get them to buy into a strategy.
3. More Than Just Finance: Leading by Example
Though CFOs may believe that they only need to communicate data and analyze finances, one of the most important skills of a CFO is the ability to take a more active leadership role. By doing this, a CFO can get the most out of their team and deliver better results to their business.
One way that CFOs can show leadership is to take a more active role in strategic decisions. Other C-level executives will better appreciate a CFO if the CFO can draw on their influence and expertise to help the team make a decision.
This more active role also applies to the entirety of projects. Instead of sitting off to the side, tracking different financial factors and taking care of audits, the modern CFO takes a leadership role from the beginning of a project to the very end. By putting themselves in a position where they have more ownership over the success or failure of a project, the CFO sets an example of responsibility that’s infectious to other staff members.
Along with leading by example, a strong leader knows how to combine all of the data and information available to help them make decisions that benefit their team. A CFO who can synthesize a wide selection of information to come to good decisions is better-respected by other staff members, thus improving faith in the project and keeping morale high.
Finally, a CFO’s leadership can be made or broken by their ability to communicate objectives and expectations to staff. One of the top CFO success traits comes down to having a vision for a project, while also helping the team see that vision. By communicating their expectations, a CFO starts a project off right and ensure that all areas of the project have someone looking after it.
Turn to Reaction Search International to Find the Perfect Fit
Finding a CFO who fits the needs of your business and has the three major skills described above can be a lengthy process. Instead of hoping a top candidate applies for the position, turn to Reaction Search International (RSI) to match your company with the best available talent in your industry.
RSI’s 25-step executive placement process helps us find the best candidates available for your company by targeting the top 5% of passive talent. Since we recognize how critical CFOs are to the success of a company, we have a specialty service devoted to finding the best CFOs available today. If you’re ready to get started looking for an all-star CFO, either complete our online form or give us a call.