CFOs must first examine themselves to see if they have the right skills to take the finance function into a more strategic future, and then ensure that the rest of the finance team can support and drive this new direction.
The finance function is in a state of flux. Technology is having a profound impact and the finance function of the future will be smaller and more highly skilled. Those that remain will become increasingly pivotal to the process of change, as will the new skills they must bring to bear on the modern finance function. But what are those skills?
Finance professionals with ‘Soft’ skills will be in high demand
Senior finance executives responding to the FSN Future of the Finance Function Survey 2016 ranked leadership, influencing, negotiation and communication highest among the skills they believe will be more in demand in three years’ time (followed closely by superior analytical capability, technology and process skills, and entrepreneurial skills). Without the requisite soft skills, CFOs risk losing their standing as influencers and trusted business partners.
Clearly the skills transformation starts with the CFO at the helm but the buck does not stop there. The skills development must filter down to their team and CFOs who do not nurture and develop their people are not only doing their staff a disservice but are also holding back the wider finance organization.
CFOs must recognize that investing in skills really pays off
The real benefits of investing in human capital of investing comes through strongly in the results of the FSN Future of the Finance Function Survey 2016. Where senior finance executives invest strongly in their people, they are further down the line in the ‘Modern Finance’ journey compared to executives who do not. They are almost twice as likely to be more engaged in helping the business create value. They are almost three times as likely to be more actively involved in strategy development. They are two and a half times more likely to be perceived more positively by other business functions. They are almost twice as likely to be more actively involved in business decision-making and they spend more time on business analysis and less on accounting.
Not all CFOs ‘get it’
While the benefits seem obvious, not all CFOs are embracing them. 45% of those surveyed felt they did not plan adequately for the succession of their finance leaders and the same number couldn’t find the finance skills internally when they were needed.
To illustrate the point I picked 10 profiles of CFOs in Linkedin at random and then looked at the top 10 skills they listed in their profiles to see how much importance they attached to people development. (I invite you to do the same experiment).
What I found was that virtually everyone listed “management” as a top 10 skill but leadership, people development, team building, mentoring, team management and change management were barely mentioned (just two instances of change management… in both cases female CFOs).
So there is apparently a big disconnect between the soft skills needed for the finance team of the future and the willingness of CFOs to declare their interest in people development.
Smart CFOs know that if the finance function of the future is to be an active influencer, pre-eminent in business partnering, strategic advice and decision-making then it must invest in new competencies and softer skills.
The challenge for CFOs is to make the case for investment in skills as strongly as the case for a new factory, a modern finance system or an acquisition. The future of the finance function is in the balance. Make sure yours is in the right hands.
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By Gary Simon, BSc, FCA, FBCS, CITP
A "Top 10" PowerProfile “Most viewed LinkedIn leaders UK”
CEO of FSN and leader of The Modern Finance Function Group on Linkedin with 46,000 members.