In case you haven’t heard, the strategic CFO is in vogue. Again. Not that any CFOs have confessed to being less than strategic — at least, not until after they leave their companies and can comfortably complain about how their former bosses held them back. But today, as companies gear up for postrecession growth, CEOs are more eager than ever to hire CFOs who are not only “strategic,” but “strategic business partners,” according to the exact words of several executive recruiters.
These days, veteran and would-be CFOs “have no choice — they almost have to be chief business strategy officers,” says employment expert Andrew Reina, regional practice director for Ajilon Finance Solutions. “Yesterday’s CFOs hoped to have that input to the CEO and the board; now, they’re expected to have it.”
Philip Tulimieri, professor at Baruch College’s Zicklin School of Business and a former Deloitte partner, goes so far as to propose a new model for corporate management in which CFOs will one day be co-equals with CEOs. “We need to see that companies are too complex to be managed by one person,” he says, and “today’s CFO is much better equipped than anyone else in the company to take on an equal role in a joint-management situation.” He and a colleague, Moshe Banai, recently wrote a paper about the CEO-CFO partnership and are currently conducting research along those lines.
This all might sound like good news for finance executives, who likely already have the phrases “strategic” and “business partner” somewhere (if not in multiple places) on their résumés. But, as appealing as it may be, this vision of the strategic CFO striding arm in arm with the CEO is one that has so far been perpetually on the horizon without ever quite arriving. The recent buzz about its importance, if not inevitability, only underscores that phenomenon.
For at least the past decade, the story has remained the same: finance chiefs are ready to pull their heads out of the numbers and address a broad range of business imperatives. They are ready to think about things like whether the consumer division should expand in Latin America or Europe, whether to acquire a competitor or fight harder against it, whether to shutter or deepen investment in projects that haven’t lived up to their potential.
In short, they will prove that they have a broad enough command of the company that they could step into the CEO role at any time. Sarbanes-Oxley, which plunged most CFOs into a vortex of mind-numbing compliance-related tasks, is regarded as a temporary obstacle to this evolution; now, experts say, we’re back on the right path.
To be sure, some CFOs truly are in this vaunted position. But research indicates that it is still far from the norm. The Corporate Executive Board, a networking and consulting group, recently probed 70 CFOs on how they spend their time. Of the group, only 17% were deemed to be “performance leaders,” executives who react quickly to change and take advantage of opportunities for their companies, and whose actions can be correlated with shareholder returns during their tenure. The rest fell into categories that sound perfectly acceptable — “process optimizers” and “consensus builders” — but that indicate executives who do not move companies forward.