9. You Pay No Attention to the CIO Behind the Curtain
Information technology — and the IT department — shouldn’t mystify you, let alone intimidate you, says Shull of Resources Connection’s Shull. Given the pressure to deliver more information, more quickly, to the CEO, to the SEC, to analysts, and to business-unit managers, adds Shull, you won’t find too many top CFOs who are in the dark about IT. (In fact, if your IT IQ doesn’t measure up, you might just want to consider another career.)
Several chief executives say that they rely on their CFO to keep abreast of current technology and leverage it to the company’s advantage. Others, like ImmunoSite’s Vennare, say that a tech-savvy CFO is not a big issue, as long as the correct balance of other skills is in place. “You don’t need a software engineer as a CFO,” he reasons, “but the candidate should have played in that market if that’s your core business.”
Nevertheless, ad agency CFO Burkel contends that a finance chief has to be comfortable enough with technology to understand the project requests coming from the IT department. Notes Burkel, you can’t always spend money on a consultant “to tell you whether your CIO is making sense.”
The Sarbanes-Oxley Act has also compelled many CFOs to become more tech-savvy, simply to meet more-robust disclosure regimes. One effect of Sarbanes-Oxley, write Aberdeen Group analysts Alan Yong and Alex Veytsel in their report “Baring the Financials: More Than the Current Financial Systems Can Bear?”, is that public companies must be able to extract granular details about material transactions and events from their financial systems.
Although the act doesn’t explicitly mandate new or updated financial systems as a compliance method, they add, the “spirit of the law will haunt public companies that lack a financial platform that captures, analyzes, and distributes detailed data.” The authors also mention something about handling all these details “in a shrinking timeframe.” Even if CEOs don’t yet demand that their CFOs embrace technology, it seems that lawmakers do.
10. You’re Not a Leader
Without the intangible ability to lead — the mortar that makes the whole greater than the sum of its parts — an aspiring CFO will fall short of the mark.
On a strategic level, leaders excel in the areas you might expect, namely constructive persuasion, talent assessment, leadership development, team building, and organizational design, says Professor Jay Congers of the London Business School. In a new book of essays titled “Leaders Talk Leadership,” Congers also asserts that a good leader knows when to cannibalize strategies, products, and organization and when to strengthen continuity and stability. It’s a delicate balancing act, adds Congers, in which adapting quickly is the hallmark and “years of experience will no longer be enough — and, in some cases, may prove a hindrance.”
Turnaround guru Pfefferle looks for CFO candidates who are results-driven, not process-driven. Finance executives who are too inflexible about their protocols and reporting structures often allow those processes “to turn into an end in themselves.” That inflexibility not only stunts the growth of the finance department and the company, he maintains, but also shuts the door on the manager’s ability to rise to the next level. Adds Pfefferle, “Successful CFOs see beyond the processes to prevent tomorrow’s problems.”
And finally, adds Pfefferle, finance executives need to be able to admit their errors, correct them, and avoid repeating them. Prospective CFOs who don’t see it that way may simply have “The Wrong Stuff.”
Have any “sure signs” of your own? Send them to MarieLeone@cfo.com.