What makes a great CFO?

A great CFO's job is a very complex one.

In today's economic environment, companies are looking for a very broad skill base from their financial executive.   They seek a full range of technical financial skills, internal control and IT savvy, treasury knowledge, risk management, and investor relations capabilities. - PLUS the strategic skills to be a full business partner with the CEO.    But one thing stands out in my mind.  I think, in addition, she or he also needs to be an important thought leader and change agent as part of the entire management team.

Someone fundamentally conservative to balance the optimism of a CEO.

• One thing is certain: a great CFO will usually differ from a good CFO by the way that he or she is able to project the long-term financial picture of the company and by how the company thrives based on his or her analyses. Not only is a CFO responsible for a company's past and present financial situation, he or she is also an integral part of a company's financial future. A CFO must be able to identify and report what areas of a company are most efficient and how the company can capitalize on this information. Which markets/products/services etc are making the most money for the company and how can this information best be used to improve the company's financial future. A CFO's provides economic forecasting and modeling - in other words, trying to predict (given multiple scenarios) the best way to ensure the company's success in the future. I call these "If..Then" scenarios. Let the CEO be the visionary, but add value by providing a solid business analysis to the idea.

A qualified professional who can assemble and analyze financial statements.

• A CFO is responsible for presenting and reporting accurate and timely historical financial information of the company he or she works for. Every stakeholder in the company - including shareholders, analysts, creditors, employees and other members of management - relies on the accuracy and timeliness of this information. It is critical the information reported by the CFO is accurate, because many decisions are based on it. As with all subject experts, it's the capacity to covey complex information in a way that does not go over the listener's heads that is often crucial. Key strategic business decisions should be the outcome of finely tuned financial reporting.

An eye for detail, in absolute command of the financial basics such as debt ratios.

Something of an IT expert with the ability to develop information systems that support the decision making process.

• Most people, from a measurement point of view, do not know what they should measure. So they solve that problem by measuring everything. . Too much detail robs you of any time for analysis. A great CFO's job is to focus on the key variables and manage the software to allow 20 percent of their time gathering data and 80 percent adding value and analyzing
• Providing data is critical, but that data must be filtered. In order to filter appropriately, CFO's must ensure the companies systems can sort through the massive amounts of information and provide people with the right data, in the right format at the right time. This takes a solid understanding of what IT systems can and cannot d0 so that the right questions are asked and the system is crafted to deliver focused information.
• The key to organizational success is to get data out there. That doesn't mean dumping a huge number of reports or measurements out on the table or loading that information on a dashboard and then heading back to the office to create yet more information analyses. It's certainly possible to produce and provide enormous data reporting capabilities, but that is of little value if the data is not targeted to the people who need it, and not used effectively by the targeted audience.
• Pinpointing the critical variables is essential. Rather than having your systems measure 100's of variables, which may or may not be of value, define the focus. Find the five or ten (or however many are relevant) key variables.

A solid understanding of HR and its impact on the business

• A great CFO understands and will want to measure the influence of employees attaining business objectives.
• CFOs see employees a key value driver. Employees are a central factor in their companies' ability to achieve the outcomes that drive shareholder value. It has a great effect on the company's ability to achieve customer satisfaction, profitability, innovation and new product development.
• The top HR workforce priorities are building leadership capabilities and raising workforce productivity, acquiring key talent, retaining key talent and measuring employees' contribution to business performance. This last item might include designing HR metrics, adding a financial perspective to HR decisions, and helping link HR policy to corporate strategy.

The strength of character to deliver the truth to business owners.

• A great CFO has the ability to be extremely articulate and a very good communicator, no matter who the audience is. Talking about the numbers is a given, but they also need to be able to talk about the strategy. If she can't integrate the numbers and strategy, and put it all into context....you are missing the "art" of being a great CFO. Being a key player in the development of the long term strategic plans/goals and converting them into financial strategy is invaluable.

Absolute integrity and a capacity for hard work.