CFOs are under increasing pressure to do it all. A confluence of trends, including M&A, cross-enterprise initiatives, industry consolidation and next-gen digital startups, are copresenting at historical highs, and never has there been more change — or more uncertainty — for organizations to manage.
For CFOs, all this change has required significant adjustments in the way they approach not only their jobs, but also their personal time management and behaviors in the workplace. However, "doing everything better" is not the answer. CFOs must align their efforts with their organizations’ highest priorities and become personally effective at facilitating change and shaping their company's strategy.
"The role of the CFO is rapidly changing," says Dennis Gannon, VP, Advisory, Gartner. "To be more personally effective, CFOs will need to counterintuitively focus on fewer things, even as the organization makes more demands on their time.”
What makes a CFO personally effective?
A CFO's personal effectiveness is measured by their performance against their CEO’s financial expectations and how well their organization exhibits "efficient growth" behaviors. In other words, how willing are business leaders to take risks to support long-term growth, and how much are those leaders encouraged by the finance team to take on healthy risks?
Learn more: Drive efficient growth
Using these criteria as a guide, Gartner interviewed more than 100 CFOs and found that just 22% scored as being personally effective. The data reveals that today's most personally effective CFOs share three key traits. Importantly, demographic and organizational traits such as age, tenure, gender and organization size or industry played no significant role in impacting a CFO’s personal effectiveness.
Here’s what did matter:
1. Strategic partner to the CEO and board
The CFO's relationships with key stakeholders and business leaders play a significant role in being personally effective. CFOs must be willing to constructively challenge the CEO’s mind to improve decision making, often using their powers of influence and persuasion.
To support this trait, CFOs should be willing to tackle unfamiliar work, as long as it aligns to key business objectives.
"CFOs must be fluent in new strategic initiatives such as digital transformation and innovation where the future health of the organization is at stake," says Gannon. “The ability to learn these areas and exert influence on their direction is a key factor for CFO effectiveness.”
Learn more: How to Upgrade Your Finance Leadership Style
2. Strong customer orientation
Effective CFOs prioritize spending time directly with their customers — even more so than time spent with their peers. They have a strong relationship with their organization's head of sales and take personal ownership of the company's pricing strategy. CFOs surveyed by Gartner reported that they felt they were underinvested in customer engagement activities by nearly two hours per week, while spending significantly more time working within their department than they intended.
3. Plugged into business performance
Finance leaders who stay connected to business performance across the organization are among the most personally effective. These CFOs have business-unit CFOs reporting directly to them, maintain relationships with all business-unit general managers and personally own performance-related activities.
Read more:Top 4 Actions for a New CFO
Tips for improving personal performance and time management
CFOs can focus on two main behaviors to drive their own personal effectiveness. First, focus on organizationwide relationships. Establish strong ties with key leaders like the head of sales, general managers, board members and the C-suite.
Second, remain focused on prioritization and time allocation. According to Gartner data, CFOs lose an entire day per week to the wrong activities. Reallocating time to the right things begins with following a "priority-time" cycle, in which the CFO publicly announces their priorities, removes low-return time investments, increases speed to impact with focused sprints and post-audits their time spent.
"The best CFOs are essentially taking what they know to work in protecting one scarce resource — available dollars — and using it to protect another equally scarce resource in their time," says Gannon. "Everything has an analog in finance process and follows an already established principle of how to drive the best return on those scarce resources. This is how CFOs evolve from good to great."