“When I went into those meetings, it was a different language,” he recalls. “That was my steepest learning curve. It put me in the deep water, and I had to swim or drown.” Arun Nayar
In today’s dynamic business landscape, aspiring CFOs must embrace a willingness to take calculated career risks. This shift goes beyond the traditional focus on financial expertise and risk mitigation.
“The job is hard, so you have to have a passion for it,” says Karen McLoughlin, former CFO of Cognizant Technology Solutions.
The CFO’s role has surpassed its traditional focus. Overseeing more functions, they’re now key performance drivers, not just financial guardians. This demands a broader skillset to navigate today’s volatile environment with its geopolitical tensions, technological leaps, and economic disruptions. Even climate risks fall under the CFO’s watchful eye.
CFO turnover is surging in the US and Europe, forcing major corporations to ramp up hiring. A significant portion of FTSE 100 and leading US financial firms need new CFOs, and a record number of these replacements lack prior experience in the top finance role. Securing the post is no easy task but it sure means that you have a huge opportunity provided you are ready to mold yourself.
How to go about in your path to CFO Role?
- Formulate a distinctive vision for the CFO role
Standing out goes beyond qualifications. Articulate how you’ll build upon past successes and bring a unique perspective. Is sustainability or technological innovation crucial for the company? Show your grasp of these areas. Can you analyze key metrics to identify strengths and weaknesses, setting the stage for future growth?
- Find diverse sponsors with organizational clout
Landing the right guidance is about seeking champions. These individuals not only offer encouragement and highlight weaknesses, but also hold influence within the organization.
- Strengthen skills most critical to the enterprise now
There are three main routes to the CFO chair, according to industry experts: the accounting track (often former controllers), the capital markets path (frequently with investment banking backgrounds), and those with a strong operational background in driving business performance.
As Nayar suggests, aspiring CFOs should critically assess their strengths and weaknesses against the company’s strategic plan for the next few years.
So, what defines a successful CFO today? Strategic thinking and a deep understanding of the business’s key drivers (financial, operational, and commercial) are essential. “The days of the CFO being siloed in their office are over,” says McLoughlin. “They must collaborate across departments and functions, fostering a culture of teamwork.”
But it’s not just internal leadership that matters. Effective communication and relationship building with external stakeholders are crucial for CFOs. Bray highlights the need to “tell the story behind the numbers,” which requires cultivating presence, communication skills, and persuasion. Finding opportunities to showcase these strengths to the CEO and board is key.
- Lead an initiative that really matters
Showcase initiative! Lead impactful projects that create value, especially those requiring collaboration across departments. “Business trust is crucial,” says McLoughlin. “CFOs need to be seen as partners, not just number crunchers.”
“You have to do a few things that lead everybody to say, ‘We are much better today than we were yesterday,’” says Nayar. When he was Tyco’s treasurer during the financial crisis, for example, the company received three credit rating upgrades. “A number of board members came to me when we got an upgrade [to say] they felt it was unique that we were able to find our way through this storm and come out strong,” he says.
- Find opportunities to engage with the CEO and the board
Visibility is your weapon. Leading a financial planning and analysis (FP&A) team is a strategic move. It bridges finance and strategy, putting you right in the CEO’s line of sight.
Don’t underestimate specialisation either. Become the go-to person on a critical financial issue and you’ll not only gain valuable experience but also solidify your reputation with top leadership.
