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When Hiring for a CFO, These Are the Skills that Matter

The last few years have challenged the role of the CFO (Chief Financial Officer), with the extreme complexity of navigating unpredictable economic and geopolitical scenarios while striving to meet the expectations of the CEO, the board, and shareholders. These factors have made this position increasingly multifunctional and strategic.


As new requirements have been added to the CFO playbook, the expectations placed upon these executives have also evolved, leading many clients with this question:


Is it sufficient to focus only on the technical skills of candidates when choosing a new CFO?


Undoubtedly, a highly technical and qualified person is a starting point for this role. However, for a successful hiring, considering an CFO’s potential is just as important as their technical and financial expertise (especially given the unpredictable nature of future business scenarios).


While future potential is a valuable tool for making the right hire for either a part-time, outsourced CFO or for a full-time CFO, it is also essential to understand the broader context and how the CFO role is evolving:


The CFO function has broadened to act as a true, internal business partner to the CEO or company owner. This includes providing recommendations to the CEO and supporting institutional initiatives of human nature that motivate teams and ensure high performance.


Another key trait is greater flexibility of strategic thinking and willingness to adapt as both internal and external factors change.


More recently, CFOs have also embraced the role of bringing the ESG (Environmental, Social, and Governance) agenda into the company due to their proximity to shareholders and potential investors, as well as considering the requirements of the market. CFOs have the deepest insight into internal controls and regulatory reporting, and the expertise needed to enhance the connectivity of sustainability information from different functions and external sources to create a more integrated reporting process for ESG.


Finally, ever-growing digitization trends also play a defining part in the CFO function due to businesses increasing need for a deep and real-time view of their performance, calling for an ability to use algorithms in data driven decision-making. This skill underpins the CFO's work as the business co-pilot, strategy formulator, and people leader.


While the expanded capabilities of the CFO role require highly flexible leaders who can adapt to circumstances and lead beyond what they were traditionally prepared for, there are four different roles that the CFO must be willing to fulfill.


CFO as Operational & Transformational Leaders


This type of CFO has a directive leadership style focused on achieving rapid results and are most effective when working with externally oriented and highly strategic CEOs. They often have experience in roles such as operations or general management, giving them a broad understanding of various business functions. Their knowledge spans across different industries, allowing them to possess strong industry insights.

In addition, they may have a solid track record in leading transformative initiatives, showcasing their ability to drive change within an organization. They have an action-oriented mindset, prioritizing tangible steps and outcomes. Additionally, they possess the skill to mobilize the organization, encouraging and facilitating change processes.

Overall, this profile represents a capable and experienced professional who excels in delivering rapid results. They are skilled at working with strategic CEOs, leveraging their knowledge and industry insights to make informed decisions. Their track record in leading transformation and mobilizing organizations suggests they can drive change effectively and deliver desired outcomes.


CFO as Strategist


This type of CFO plays a critical role in shaping and implementing the company's business strategy. They possess a comprehensive understanding of the compay’s goals and stay abreast of market trends, enabling them to identify new business opportunities. Critical thinking is an essential skill for this role as the CFO strategically evaluates financial and operational information to identify growth prospects and assess potential risks.

They have relevant experience in capital and resource allocation, investments, and growth or restructuring strategies across a portfolio of assets and/or businesses. This suggests that they may have gained their expertise within a multi-product structure that encompasses diverse lines of business.

This CFO's responsibilities go beyond traditional financial management. They are actively involved in strategic decision-making, leveraging their understanding of market dynamics and financial insights to drive growth and mitigate risks. They play a crucial role in identifying investment opportunities, allocating resources effectively, and implementing strategies to support the company's overall objectives.

Overall, this CFO brings a combination of financial acumen, strategic thinking, and industry expertise to the table. They possess a deep understanding of the company's goals and market dynamics, enabling them to uncover new business opportunities and make informed decisions. Their experience in capital allocation, investments, and growth or restructuring strategies across diverse assets or businesses equips them with the skills necessary to drive the company's success.


CFO as Controller


This CFO role is often associated with a more traditional CFO role. They have a strong foundation in accounting principles, processes, systems, and controls. They are also experienced in ensuring financial governance and overseeing internal controls within an organization.

In situations where there is a need to restore investor trust or when a company requires a focus on governance and controls, CFOs with these skills are well-suited to the task. They bring a meticulous and detail-oriented approach to their work, prioritizing accuracy and compliance. Their expertise in financial management and controls enables them to establish robust systems and processes that ensure the integrity of financial information.

These CFOs excel in environments where there is a need for increased scrutiny, such as during times of financial distress, regulatory challenges, or when rebuilding trust with stakeholders. Their proficiency in accounting and financial governance helps to instill confidence in the market and stakeholders, as they are able to establish transparency and accountability in financial operations.


CFO as External Relationships Manager


This type of CFO operates most efficiently when supported by strong functional teams in key finance areas such as accounting, financial planning and analysis (FP&A), treasury, taxes, and others.

In addition to their team leadership abilities, this role demands significant experience in areas such as mergers and acquisitions (M&A), capital markets, and investor relations. They have a deep understanding of these domains and possess the knowledge and skills required to navigate complex financial transactions and market dynamics. Their experience in M&A allows them to assess potential opportunities and risks, ensuring strategic decision-making.

Furthermore, this CFO is well-connected in external networks, which is crucial for establishing relationships with investors, financial institutions, and other key stakeholders. Their ability to cultivate and maintain these relationships contributes to the organization's success in capital raising, financing, and investor communication.

Independent thinking is another key attribute of this CFO. They have the capacity to think critically and analytically, allowing them to provide strategic insights and recommendations to the CEO and other senior leaders. Their ability to assess market trends, evaluate financial data, and identify strategic opportunities helps drive the company's growth and success.

Overall, this CFO role requires a combination of strong leadership, experience in key finance functions, expertise in areas such as M&A and capital markets, extensive external networks, independent thinking, and strategic insight. By leveraging their team's capabilities and their own expertise, this CFO contributes to the financial success and strategic direction of the organization.


If you are a business owner or CEO within the San Francisco Bay Area or Silicon Valley, in need of an experienced fractional CFO to help your company identify opportunity and improve operational processes, cash flow, accounting and billing process management, as well as profit margins, our highly skilled outsourced CFO services provide direct access to high-quality expertise in a cost-effective manner.

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