- Author: Ernie Humphrey and Anders Liu-Lindberg
- Posted: April 18, 2020
The Rise Of The Social CFO And The 6 Types Of CFOs
The CFO role is undergoing constant change as the demands are ever-increasing. In the past, the CFO could reign supreme from her office and only come out to shine in management or board meetings when called for. Anders has previously described the evolution of this type of CFO leading up to the disruptive CFO.
However, a next-level CFO is emerging. This time it’s a CFO that does her best work outside of her office. It’s the social CFO. Why is this the next level CFO? Because previous CFOs have made sure the engine runs like on a top tuned car with little need for management intervention. This has made Finance a people business both inside and outside of the function. Why is that?
Firstly, it’s because finance leaders no longer can lead their teams through systems, checklists, and processes. Now the only way to lead them is from the front by being a role model and observing them in action. Otherwise, it’s impossible to give good feedback and be a great coach.
Lastly, it’s because
They must be great communicators because wherever they go, they’ll be expected to lead the way, be it in town halls, fireside chats, or other fora they might encounter.
This requires something new of the CFO hence it’s time for the rise of the social CFO. Let’s now take a trip down memory lane and look at all the CFO types that preceded the social CFO. Then we’ll describe what’s new in the CFO world by outlining the key features of the social CFO.
The Old-Fashioned CFO
The old type of CFO who is focused on backwards-looking financial reporting, control, and compliance and how to keep up with regulation. This CFO struggles mightily with social skills and is not likely to have good relationships with her senior management peers. She’s likely not recognized as a great leader either hence you see fewer and fewer of this CFO type although they’re still very much alive!
The Analytical CFO
How about the CFO that creates transparency through a deep understanding of the numbers and who knows how to paint the picture to the rest of the senior management team? Understanding exactly what goes on in your company is a good starting point for driving value creation, however, simply being an assertive communicator and understanding your numbers isn’t enough. CFOs must be able to build relationships and speak the language of the business. Otherwise, they won’t influence much with their speech.
The Strategic CFO
In many companies, the strategy team reports to the CFO and hence the CFO should lead the strategy process. Too often though it becomes a messy process because the CFO lacks solid relationships with senior management peers. That, on the other hand, has the head of strategy. Hence, it’s often her that’ll be leading the way leaving the CFO leaned back in her seat with little impact. Naturally, the CFO should lean on a strong head of strategy, however, she must be a strong owner too and that requires strong relationships!
The Tech-Savvy CFO
As companies go through digital transformation many of them see an advantage in having a tech-savvy CFO. However, many of them are also starting to realize that it takes a lot more than tech-savviness to succeed with tech. It requires a strong leader that can bring people along on the journey. Why? Because after all, it’s the people that in the end will be operating and monitoring the tech. Too often CFOs have forgotten this and seen the ROI on tech investments plummet.
The Disruptive CFO
Don’t get us wrong. It’s great to have a disruptive CFO that’s always asking, “what comes next” and is out and about chasing the latest trends. However, the debrief of this should be received well rather than defensively. Employees should be brought along on the journey rather than alienated from what needs to happen. The team must stand strong behind the CFO to start the work. Therefore, “social” is the latest ingredient to be added in the CFOs arsenal of capabilities!
The Social CFO
The social CFO is a people person or at least has learned to be one. She thrives on her social skills rather than financial skills although they cannot be disregarded. To be successful she must be a great listener, know the company’s customers, know the finance team, know the colleagues outside finance and their capabilities, and is a great communicator and storyteller. Most of the things happen outside the previous CFOs comfort zone so if you want to succeed as a CFO in tomorrow’s world you better choose today to step outside your comfort zone!
It’s an evolution – not a revolution
The CFO role will continue to evolve, and the real challenge is that the demands of yesterday don’t go away just because the current day and future demands are coming. This also means that the CFO must put a great team around her to succeed because without it being a good social CFO isn’t enough.
Now the final question: What type of CFO or finance professional are you?
Anders Liu-Lindberg is the co-founder, COO (Chief Operating Officer), and CMO (Chief Marketing Officer) at the Business Partnering Institute and owner of the largest group dedicated to Finance Business Partnering on LinkedIn with more 8,000 members. With over ten years of experience as a business partner at the global transport and logistics company Maersk, Anders is also the co-author of the book “Create Value as a Finance Business Partner” and a long-time Finance Blogger with 40.000+ followers.