Four Secrets Every Great CFO Knows

Not everyone who’s handy with a ledger is cut out to be a great Chief Financial Officer. While the technical details of accounting, reporting and regulatory compliance are obviously important, great CFOs are distinguished by their mastery of things other than accounting.

Communications skills top that list, along with finding and hiring great talent, being able to get everyone to pull in the same direction at once and business savvy. A studious approach to the economy and industry climate helps CFOs see around the corner and prepare their organizations for a rainy day or for a sunny sprint to the next plateau.

What makes CFOs great is what makes them business leaders rather than technicians.

In the course of our work for clients Grayhawk has interviewed thousands of CFO candidates and hired scores of them. The ones that rose to the top and became peak performers in their new roles share some important attributes: These are four secrets that all great CFOs know.

1) Don’t Be Dr. No

The CFO of a large media company acquired the nickname of the infamous James Bond villain not because he was evil, but because he was famously skeptical of everything. There were few sales projections, expense estimates or new projects that could pass muster in his eyes, and the word “no” seemed to always be on his lips. While skepticism is a healthy and necessary trait for any CFO, it should be tempered with a willingness to trust the judgement of other leaders who’ve proven they have a nose for the business and the drive to salvage success from projects that are going sideways.

One famous knock on finance from other corners of the C suite is that “accountants know the price of everything and the value of nothing.” CFOs need to recognize that not every business asset has a line on the balance sheet, and be open to metrics that are not strictly numerical. This is increasing in importance with the growing emphasis on the social accountability of businesses.

CFOs who find themselves saying no to a lot of their colleagues’ proposals should put some time into helping craft those proposals to ensure they’re founded on solid assumptions and make financial sense.

2) Develop Good Judgement

To quote the popular social philosopher and 1960s Jet Set icon Dean Martin, “Good judgement comes from experience. And experience, well, that comes from bad judgement.”

Great CFOs have made mistakes, sometimes large ones. And they’ll be the first to tell you about those mistakes — and what they learned about why they were wrong. A CFO who has never made a mistake, who doesn’t see their failures as mistakes or won’t admit to them, is not the right leader for your finance department. No one is infallible, and a leader who claims infallibility is setting themselves up for a massive loss of credibility when something inevitably goes wrong.

There are times to be risk-averse and times to take risks, and judgement is the quality that guides the best CFOs. Shutting down a cash-hungry project could preserve precious capital, or it could prematurely abandon an initiative that is the key to new markets and new revenues.

3) The CFO As Influencer

Any CFO can have great influence in an organization. And while “strong arming” colleagues may decide some battles, it is not going to win the war of influence. Influence comes from having both power and the respect of peers and partners in the C suite.

Great CFOs have influence with a broad swath of people: Not just those who report to them, but also the CEO, board members and the heads of technology, marketing, sales and production. The CFO influences external stakeholders too: Bankers, investors, regulators, customers and — increasingly — the general public. That means being able to understand the needs and perspectives of each of these diverse groups and getting the message across to them in a way that they can understand.

Being available to advise and consult with others is critical to developing influence, but a CFO should also seek out the advice and counsel of others. Someone who is known to listen will also be listened to. Listening is an active skill that needs to be honed. Just sitting still while others are speaking is not listening. A leader is able to physically signal that they’re listening: Eyes trained on the speaker; leaning in rather than away; keeping a friendly facial expression even if they disagree; asking questions such as “if I understand you correctly, you’re saying …”. And leaders know how to attack an argument without attacking the person making the argument.

Because of the consequences of their words, CFOs should be selective in the use of influence, but they should be sure to use it. Influence has to be used to be recognized and appreciated by others. A CFO that has real influence is sought out by other leaders as an ally in new initiatives, and gains even more influence as those initiatives succeed and prosper.

4) Build A Personal Brand

A CFO has tremendous responsibility. Their peers and partners in the organization will want to have confidence in their technical abilities and believe that their decisions are made with the right intentions. Conveying those qualities in their personal brand is critical. Acting ethically at all times, not participating in factions and communicating the true state of the organization’s finances without bias are solid cornerstones.

There are other ways for CFOs to build their brands, too. Social media profiles are important. Their LinkedIn profile should be up to date. Their posts should be uniformly positive and professional — more than one high flier has been caught out by an errant social post.

Posting on professional websites and industry forums helps, too. Incisive commentary and insight there will lead others to see the CFO as knowledgeable and engaged. Helping peers outside of their own organization solve professional problems can raise their profile in the wider financial and business community.

Attendance at industry conferences is a good start, but presenting is even better. When organizers choose a CFO to present, they’re endorsing them as an expert. The more of these “third party” endorsements the CFO receives the stronger their public reputation.

Another time-honored way of building contacts, experience and respect is to serve not-for-profit organizations, either in finance or other capacities. Great CFOs have a history of lending their expertise to a good cause, and they take on challenges that stretches them and helps build leadership skills. Success in the public sphere not only gets them noticed, but can quickly expand their circle of contacts: Other successful professionals and politicians are useful connections.

Stepping Up

Being a CFO requires many technical skills; being a great CFO means taking the next step, broadening skills — as well as their circle of connections and influence — beyond the friendly confines of their own finance department. When you’re looking for a CFO, find someone who knows these secrets and has demonstrated that they have the business acumen and leadership skills to be not just good, but great. Grayhawk can help you locate — and verify — candidates who’ll propel your organization to the next level.

Luke Clare