Published by The Globe and Mail on 25/04/16
In the past decade, the classic image of the number-crunching chief financial officer has all but vanished to make way for the more nimble, generally trained, modern CFO. The expectations for these financial executives from investors and employers are high, but the skill sets and work environments are constantly evolving.
“It’s no longer like the old days when you had the bean counters sitting in a little room, with the [eyeshades] on and they’re crunching their numbers to produce financial statements … that’s way in the past,” recalls Patrick Brooker, a former vice-president of finance for Purolator.
A financial executive for more than 25 years, Mr. Brooker, below, knows the traditional image of the CFO well, but since joining the CFO Centre – a Canadian arm of an international provider of part-time CFOs – in 2012 he now has five clients and is called in on an “as-needed” basis.
The trend for hiring part-time CFOs is well under way as many small and medium sized enterprises (SMEs) realize they need these elite skills, but may not have the workload or cashflow for a full-time position. It demonstrates yet another change in the business environment in which CFOs have to adapt. But how have these evolving business environments changed the skill sets of those in financial executive positions?
Many of these are soft skills, especially those that are needed to deal with the current upswing of startups and SMEs, particularly in a the current climate of outsourcing, Mr. Brooker says.
“Our focus now is on strategy,” explains Mr. Brooker, saying that he absorbs the visions of all of his clients and his job has morphed into keeping the key players on task – especially a company’s creator.
“From my experience, entrepreneurs generally have two things in common: They’re highly focused and they’re unbelievably stubborn,” he says. “So if you can come in and work with them and form a relationship with them where they bounce their ideas off of you and, based on your solid track record, they allow you to give them objective criticism, then the relationship becomes much more effective.”
Indeed, Mr. Brooker’s quantitative hard skills background as an accountant is taking more of a back seat to his ability to interact with potential investors, convey the vision of the company and motivate different departments to remain true to the strategy.
“At the CFO Centre we call it the barbecue test,” he laughs. He explains that the centre’s chief executive officer Ian Young selects CFOs for his team with decades of experience, but the true test is whether or not he would invite them to his home for a barbecue.
Because it’s these communications skills that employers want to see, explains Mr. Young.
“What you really want is a business partner and somebody with strong interpersonal skills that can build the relationships, build consensus and be a part of your growth strategy,” he says.
And those CFOs still banking on their financial training to bring them into the future should really give more attention to the soft skills employers are looking for, according to a 2013 report by the Association of Chartered Certified Accountants.
The report details the future career path of CFOs throughout the world and found, “Whilst most of today’s CFOs (61 per cent) do not have experience outside of the finance team, future CFOs should seek out greater mobility in and out of the finance organisation, building the commercial qualities needed, and of course the internal relationships.”
“The CFO’s role really then starts to extend to, ‘How do we improve profitability? How do we set up the organization and properly resource it, whether it’s from a funding and cash capacity or from a human resource capacity working with the HR department and the rest of the management team?’” Mr. Young says.
“What most businesses miss is the value-add that an experienced CFO can bring to the business because it’s much more than just bookkeeping, filing compliance reports and internal controls,” he adds. “It’s being involved in the strategy of the business and really helping that business to grow.”
Karen Epp, a financial executive headhunter for Goldbeck Recruiting Inc. in Vancouver, agrees that CFOs are expected to “have the big picture for the company.”
“The CFO needs to be able to grab the vision of the CEO and the vision of the company,” says Ms. Epp. “Obviously some specific industry experience or some related industry experience is great, but a sense of trust has to be incredibly high between the CEO and the CFO.”
And with many HR and IT departments being outsourced, the demand is increasing for CFOs with experience setting up these departments in other countries.
“I’m seeing companies offshoring different parts of their business,” she says. “I see a need for experience working with international companies, in places like India [and] Malaysia, to offshore the clerical accounting.”
It’s more about people than numbers, explains, Ms. Epp. Delving into the worlds of human resources and information technology are now a common responsibility for the modern CFO to make sure all of a company’s departments are working toward the same strategy.
“The startup tends to be that high-energy group,” she says, “and they’re looking for someone similar that can really roll up their sleeves and dive into a wide range of tasks.”