I’ve written before about why the Chief Financial Officer may well be the hardest job in the C-Suite. Indeed, for all of the leadership discussion about Chief Executive Officers, the rubber really meets the road in the CFO’s mandate; they play a crucial role in managing the financial health of the company and ensuring that financial goals are met.

My perspective is informed by my 20+ years of experience and discussions with clients and peers. My intention is to help of helping executive teams achieve their fullest potential by shedding a bit of light on some possible misconceptions and unknown needs your CFO might have. 

Despite the importance of their role, other C-suite executives often have misunderstandings about the CFO’s responsibilities and the challenges they face. This begs the question – what is your CFO actually thinking? And how can the rest of the team support them?

A number of qualities are essential for a great CFO – leadership, great relationships, thick skin, backbone, flexibility, optimism, making the complex simple, integrity, being a great model, team builder, and being a true process optimizer.

As one CFO told me, the job is a constant juggle of the tactical and the strategic – balancing everything from quarterly revenue and profit targets to the long-term outlook years into the future. Other C-suite executives can help cultivate these qualities by providing feedback, setting expectations, and acknowledging the CFO’s contribution to the company’s success.

“The CFO holds a high level of accountability while at the same time having a relatively low level of direct authority.  This gap between accountability and direct control is where the great CFOs thrive using intuition, relationships, and leadership to supply the glue that holds it all together.” 

But even the best CFOs often feel overwhelmed with the weight of hitting profit targets and managing the financials of the organization. At times it can feel as though the rest of the senior team assumes the CFO will handle everything if the financials are off track. Good CFOs might even have teams that feel overly confident in the CFO and make decisions that make it hard for the CFO to “fix” things. CFOs often wish that their team and the CEO would pay more attention to their concerns and offer help, suggestions, and sacrifices more voluntarily. After all, the constant advocacy for the CFO’s mandate can become exhausting for the CFO.

One common misunderstanding that C-suite executives have about the CFO’s role is that they are solely concerned with money. Additionally, executives may assume that the CFO doesn’t want to take risks, is only responsible for tracking results and providing detailed reports, and isn’t a leader that employees look to for guidance. It’s essential for the rest of the C-suite executives to understand that the CFO’s role goes way beyond just managing the finances. The CFO also plays a crucial role in strategic planning, risk management, and decision-making. They provide valuable financial insights and leadership that are vital in guiding the organization towards its goals.

The organization benefits when the other C-suite executives seek to understand the CFO’s role and responsibilities and offer support where necessary. When the whole C-suite works to create a collaborative environment where there is a free exchange of ideas, risks, and needs the organization is far more equipped to hit its goals. This will foster a culture of trust and collaboration within the executive team, which is crucial for the organization’s success.

A common challenge in organizations is making budget adjustments during the fiscal year. Most budgetary plans impacting areas like spending and hiring are contingent upon hitting certain profit and revenue targets. When the organization falls short of those goals, it’s necessary to adjust the budget accordingly; even if the CFO is just the messenger, they can easily emerge as the villain for those reductions or changes to plans. The CFO plays the role of capital allocator in these situations. Someone is going to be disappointed – and often everyone is!  The other senior leaders, the function heads, will likely be domain experts of their area, but the CFO is the one negating the balance of limited resources and how to best support the needs of the whole organization. 

In organizations that struggle to achieve their goals often there is a cultural issue where the goal of other senior leaders is to try to confuse or scare the CFO into alignment with their functions needs and desires. This is often counter-productive to the good of the organization.  Every great CFO is always working to elevate their game and to learn more about their business.  The only way they can do that is to truly let them in to your planning, dreaming, and your fears of what might go wrong. 

So, what can organizations do to build closer links with their CFO and fully tap into what they are capable of providing in terms of value?

·         Develop deeper personal relationships with each other and your CFO to foster a culture of trust and collaboration. It’s important to get to know each other outside of work. This could involve having a drink or meeting up to chat. These informal interactions can make a big difference over time in ensuring alignment and that the team in speaking in “one voice” on the big issues.

·         Avoid surprising your CFO and develop trust by running things past each other before big meetings. It will be helpful in the long term if other leaders can “speak the language” of the CFO; that means coming armed with financial justifications for investments or hiring initiatives rather than proposing ideas without analysis of the return on investment.

·         Executives who are vulnerable and honest about their proposals, needs, and concerns foster a high-performance culture that benefits the whole organization, and therefore themselves and their function.

·         Executives who strong-arm the CFO by involving the CEO or getting CEO approval before collaborating with the CFO do so at the risk of undermining their relationship with their CFO and undermine the value of the position.

·         Asking for feedback and asking how to better support the CFO is also crucial. The best more productive C-level relationships I had often involved the question – “how can my team support your team better?”

·         Ensure that your CFO is fully aligned with the company’s strategic objectives and vision for the future, by staying together as a unit.  Have each other’s backs.

·         Don’t assume the CFO doesn’t need or want to be involved. Transparency, simplicity, and supporting each is key to developing a high-performance culture.  Regular one-on-one meetings with the CFO can help to both develop alignment on what the “big picture looks like” and build trust.

·         Leadership and professional development are critical to getting the most out of the leadership team. This is especially true for the CFO.  Some organizations question the importance of leadership qualities in a CFO.  If this is you, you might be missing out on the effectiveness of a great CFO.

·         A great CFO needs to be BFFs with the Chief Revenue Officer (CRO) to ensure that plans are achievable, and resources are available.  If the CFO/CRO relationship is weak, this is a sign there may be a performance inhibiting cultural issue.

·         Key metrics that CFOs use to evaluate business performance include a simple and clear set of key metrics or a dashboard that provides nearly real-time, clear, simple, insightful, and compelling data. It’s important to keep the dashboard simple and turn data into a few clear stories where the focus is clear.

·         Don’t ask for ever more “slices and dices”, sheets and sheets of detail, and new reports just to have them.  This drives up the cost of finance, slows down the important reporting, and confuses the true story of the business thus clouding the best course of action to execute on strategy.  Better to be transparent with what you are looking for. What questions are looking to answer?  What is the desired outcome of your request? 

·         It is critical for senior leaders to work closely with the CFO to develop risk management plans that align with the organization’s strategic objectives and vision for the future. By working together, the CFO and other executives can ensure that the organization is well-positioned to manage risks and maintain financial stability in the long term.

·         Furthermore, executives can support the CFO in managing risk by creating a culture of transparency and accountability within the organization. This means encouraging open communication and ensuring that everyone understands the importance of risk management. The most effective executives lead by example, demonstrating their commitment to managing risk and ensuring financial stability through their own actions and decisions.

 Ultimately, cultivating a strong relationship with the CFO and ensuring alignment with the company’s strategic objectives requires a commitment to open communication, transparency, and mutual respect. By working together and valuing each other’s contributions, C-suite executives can help their CFO succeed, which is a great way to drive the company towards long-term success.