New chief financial officers (CFOs) might find themselves joining a new leadership team, replacing a less successful predecessor or replacing an iconic leader. Whatever the transition situation, a new leader needs a clear plan to ensure long-term success — including specific goals, resource allocation and cultural resistance.
A well-engineered transition process accelerates a new CFO’s success and creates more value for the organization
Gartner research finds that almost 50% of new leaders underperform in their role. Direct reports of a struggling transitioning leader perform, on average, 15% worse than those who report to a high-performing one; they are also 20% more likely to be disengaged or leave the organization.
“A new CFO is a disruptive event for an organization and its people,” says David Akers, Senior Principal, Gartner. “A well-engineered transition process accelerates a new CFO’s success and creates more value for the organization.”
4 transition priorities
To be successful in the first 100 days, new finance leaders must focus on four transition priorities.
Understand the contextual factors that can impact your performance and proactively plan to address or account for them. In particular, seek to mitigate key obstacles to transition success, including aversion to change and a lack of finance agility and alignment.
Take an intentional lens to relationship building, assess which stakeholders impact the finance function’s performance and define your personal brand. Successful CFO transitions are about building relationships and trust, and establishing credibility. Doing so with your peers, the C-suite and the board is particularly important.
Gartner research indicates that new executives who intentionally yet quickly build a strong network among company leaders are 50% more likely to succeed in their transitions.
Learn more: How to succeed as a CFO
Assess the finance function’s performance, as well as process maturity, talent profile and organization design, to ensure it can support the business. Getting the basics right enables CFOs to broaden influence and impact. Review available performance data, benchmarks and feedback surveys to analyze and understand the key issues to address and establish a clear set of initial priorities. Quickly ascertain which competencies are most critical to the success of the function and identify any capability gaps that the team needs to close. As more insight is gained, prepare to refine over time.
New CFOs should set out a clear, forward-looking vision for the function early on and help the team picture where the function is headed. Create and communicate a roadmap that mobilizes executive leadership, employee activity and resources against the initiatives that drive strategic execution.
Setting a vision aligns employees’ mental energy and actions around the CFO’s ambitions, ultimately improving productivity.