Not every CA(SA) wants to be a CFO (Chief Financial Officer). But those who do seem to have a somewhat vague understanding of what might be required.
Usually the two critical roles on any company’s Board are the CFO and the CEO (Chief Executive Officer). Note that sometimes the CFO could be referred to as the Financial Director (FD) and the CEO as the Managing Director (MD). Usually the FD and MD are titles conferred upon divisional directors whilst the CFO/CEO refer to Group Directors.
What a lot of aspiring CFO’s fail to realize is that there is a big gap between a financial manager and a CFO – the jobs are totally different.
The CFO has teeth! He is a developed character and personal power that gets the job done!
So consider these two characters using the following example:
- The CFO will tell the Board that it can be done even though he might genuinely feel that it’s near impossible.
- The financial manager will give a number of valid reasons why it cannot be done.
I know this might look like a silly example but to me it sums up the basic character differential that sorts the big dogs from the small dogs.
The CFO is a professional ‘doer’ – he gets the job done creatively, quickly and with the least amount of fuss!
Too often I hear CA’s claim that they want to be involved with ‘strategy formulation’.
The whole issue around strategic thinking is, in my mind, a misnomer.
The process of strategy and strategic thinking is actually quite different to what most people think.
Strategy is the process that determines what the business needs to do to thrive into the future. It’s that simple.
In most companies, especially large listed companies, strategy is debated and determined by the Board. Thereafter the relevant Directors are allocated various parts of the strategy to execute.
Because finance is the neuro-center of most businesses, the CFO plays a major role in strategy execution. He also plays a significant role is providing an less biased assessment of the strategy’s viability (stress testing the model).
Hence a lot of the time, the CFO is busy executing Board-determined strategy! The better he is at this execution process the better he is in his role.
Subsidiary to this is the fact that he might have to develop his own strategy to achieve the overall company strategy. For example the overall strategy might be to reduce costs by 15%. In his sphere of influence his strategy might be to centralize financial reporting into a shared services division.
The CFO will make it happen, on time and in the right way!
Never get too excited about strategy – it usually sits squarely with the CEO and the Board. Your contribution, as the CFO, will usually be around making sure that implementation occurs efficiently and expeditiously (and stress-test viability).
That is why it is a ‘I can do’ mind set that is so critical and what separates financial managers from the CFO.
This might appear a little simplistic but it is a basic understanding of what you need to be to step up into the CFO’s shoes.
Of course there are other issues including executive presence and playing the corporate game but these are discussions for another time.
About the author:
Clive Kaplan is a prolific writer on LinkedIn PULSE. He has written over 40 articles on various topics from financial management and operations to job search and confidence building. Being a CA(SA) with over 20 years’ experience as an executive director in both listed and unlisted companies Clive brings some interesting perspectives to the field of management. Having been involved at Director/Board level, he offers a wealth of wisdom on both the people and business front.
Clive is the CEO of GREEN MIND CAPITAL (Pty) Ltd. The company focuses on assisting executives, especially emerging young CA’s, maximize their potential and fast-track their careers.
Clive has been involved with coaching and self-development since 1994. He has a particular interest in Cognitive Awareness Technology (CAT) and has completed a number of advanced courses on the topic.
Clive’s mix of years of practical executive experience coupled with his own personal self-development journey brings together a unique method of Transformation Coaching.
Clive is also a ORT Jet mentor and works closely with the More To Life program, both on a voluntary basis.