The Essential Skills

To ascend to (and remain in) the CFO's office, you need much more than financial acumen.

“You need to know what your CEO’s hot buttons are: what’s important to him, what is he being judged against, what’s his value system?” says Tony Panos, a consultant who developed and teaches a class on managing up for one of Cornell University’s extension schools. “Anything you suggest should fit into that. You should demonstrate how you are helping him meet his goals.”

But what about managing up to a dictatorial CEO? The advice is the same, Panos says, but he recommends looking a bit deeper for motive. “People who are dictatorial tend to have some level of fear driving them. Start by looking at what those fears are and how you can mitigate them.”

The Art of Saying No

CFOs are often labeled as the original “Dr. No,” and in fact they may be more likely than other senior executives to put the kibosh on ill-advised plans or projects. But many CFOs agree that a thumbs down, or any form of unwelcome news, can be delivered professionally and with a little less sting.

One way is to “help people feel like they’re coming to a decision together,” says Bright Horizons Family Solutions CFO Elizabeth Boland, by giving them the facts and the potential risks rather than a final answer. Richard Fearon, CFO of Eaton Corp., says that listening can make all the difference. “You just need to hear the idea through so that no one feels shortchanged,” he says. In a well-managed company, he adds, the CFO won’t have to play the heavy very often, because bad ideas will usually be weeded out before they get to his door.

Sometimes, of course, the CFO will have to say no. The toughest situations, in Boland’s view, are those in which the lack of revenue potential “makes it really evident that a proposal is not even worth talking about.” She counsels patience. “We try to talk through all possible revenue opportunities,” she says, “before saying it won’t work.” When all else fails, says Fearon, you simply turn the tables. “I just ask what the person would do if he or she owned 100 percent of Eaton.”

Vetting Vendors

Third-party consultants, contractors, and service providers have become essential in this era of increased regulation and outsourcing. And thanks to Sarbanes-Oxley, not only has “reliance on third-party vendors reached a new extreme,” says Jeff Burchill, CFO of FM Global, but so has the complexity of deciding which firms to hire. In the past, the decision was based largely on who was the low bidder. But now that public-company CFOs face a potential personal liability regarding the quality of financial reporting, “price may not even come up,” Burchill says. Consequently, CFOs often have to be “personally involved in the selection process,” he says.

That means digging deep on references. Ideally, have a technical person on your staff find out exactly how a consultant handled, say, a software conversion at the reference’s company and what complications ensued, says Bright Horizons’s Boland. Then ease into the relationship slowly, signing up for only a short project to start. Build in time for unexpected problems.

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