In today’s business environment and technology that evolves extremely rapidly, the role of the CFO has dramatically changed. In the past, they have been financial gurus behind the scenes and now are forward thinking team leaders and visionary. Also, CFOs are must be involved strategies and all aspects of company’s operations. Knowing all of that and the fact that we live in the era of technologies, communication, data analysis, and organizational structure, the main question that comes to our minds is: What are the habits of highly successful CFO’s?

Here are 10 qualities that define a well-respected and successful CFO:

1. Role Clarity

role_clarityThe best CFOs say that role clarity is key to their success. They agree that good CFO should be forward looking. He/she needs to know that understanding of the past is very important but they are required to influence the future. Also, they must be able to take calculated risks. Besides all things mentioned above, great CFO must nourish a strong and trusted relationship with the CEO. This is essential to the success of every company because the CEOs sees the CFOs as their co-pilot and expect from them to help steer the business. Often, CFO can find him/herself acting more like a COO, so they must be seen more as a strategic partner to the CEO if they want to be the best in their industry. For example, If the company they work for is going through major changes or transition (going public or being taken private, etc.) the role of the CFO and his/her abilities and skills are very important. Only great CFOs know that technical part of the job can be done by everybody, but the ability to work very closely with the CEO and other key stakeholders as they make decisions shaping the future of the business is the crucial thing.

2. Building a Strong Team

strong_teamEvery good CFO must build a very strong team if the company’s success is their primal goal. He/she needs to be aware of things they don’t know and surround themselves with a group of people who can “cover” their weaknesses. For that reason, they must fight their way to be allowed to build their own team and make their own decisions about the team. Also, they should have good documentation of all processes. As Sean Barry, CEO of Bridgevine Inc. says: “[tweetthis]”Hire smarter people than yourself” and you will be closer to your goals.[/tweetthis]

3. Always Adjusting your Communication Style

manage_communicationThe good CFO must know to use different communication style depending on with whom is he/she is communicating with. When he/she works for the company owned by a PE firm, it’s expected to use the transparent style of communication.

The most successful CFOs agree that open, sincere, and frequent communication is a must when we are talking about leadership in order to avoid surprises. Also, it’s very important to address issues as they arise. As Brian Beckwith, CEO Formation Capital says that “Flex Communication Style” is the best thing to do. So, use the different style for the different audiences.

Confidence when sharing information with his audience is also a very important skill for the CFO.

Some CFOs easily fall into trap of sharing too much information during communicating with colleges. So, you should be concise, short and go straight to the point, especially if you are talking with the Board, Investors, Peers or employees.

4. Create an Environment Of Trust

trustIf you want to be successful in leadership, you must know that building relationships and developing trust are crucial. Stick to an open door policy and try to make time and listen what your employees have to say. In order to do that, you should encourage them to speak freely to you and to always say their opinion. They should never be afraid to question company numbers and to be critical components of the business.

Also, you should try to get to know and understand all of your employees and keep them informed about any organizational changes. [tweetthis]Never forget that your role is to be the leader first, and the financial officer second.[/tweetthis]

5. Be Involved In All Aspects Of Your Business

The difference between good CFO and the great on is that the second has the priority to always be in the middle of company problems, attend sales and marketing meetings, visit customers, and go on plant tours.

Most of the CFOs spend far more time on simple reviewing updates rather than asking questions and generating discussions. If you don’t want to be just an average CFO, but the great one, you need to expand your horizons. You must fully comprehend the analysis behind financial decisions, and be able to anticipate potential company issues and risks. Besides that, you should be eagerly available to address your concerns and offer constructive criticism.

Above all, always be able to implement solutions. In other words, you should be prepared to go beyond the call of duty, be fully apprehensive of internal operations, and, if necessary, help to modify the company’s direction.

6. Be A Talent Magnet

talent_magnetIf your goal is to retain and bring in talent, you are on the right track to be successful CFO. That way of thinking can be essential to any growing company and represents a significant part of your role. As many great CFO s say, your capacity to help the “leadership pipeline” by adding value to your company and not your financial expertise will get you ahead. So, if you want to give the definition of your “value”, your organizational skills need to evolve. In order to do that, you must constantly assess your overall goals and make enough time for external networking and talent searching. Always advocate your team’s approach during the hiring process.

7. Embrace Change

Every dedicated CFO should always look into the future. So, in order to join the team of the best CFOs, you should balance your long-term and short-term goals, and never allow your company to become a slave of stagnant and ingrained because of old behaviors. You need to be the voice of your company and the one who is always pushing and encouraging change. And, when modifications are finally in place, you must concentrate on settling top priorities, effectively pass on them to your employees, and make sure that they are done.

Always consider implementing the new roles and projects and try to keep your employees concentrated on the reasons and advantages for those opportunities. And what’s most important, try to think beyond numbers and constantly develop your role as a visionary leader.

8. Improving Profits and Cash Flow

profits_cashflowMost CEOs demand from their accounting department to be responsible for all financial meters in their company and to control all costs.

The role of a CEO is to grow the company profitably. The CFO’s role is to provide fuel for this growth. Profits and cash flow are that much-needed fuel.

CEOs try to keep the financial function as the only possible way of protecting company’s profits. That is the reason the financial function is constantly working twice as hard in order to produce the information and leaving insufficient time for analysis. Because of that, the company owners usually blame the CFOs for tough economic times and let them go as they see them as overhead.

If you want to be good CFO, you need to see yourself differently (more like a salesman) and not number cruncher but a numbers driver. In other words, you have a just as great an opportunity in driving profits as the best salesman in the company!

9. Don’t be Controller

This step is a logical continuation of the previous one.

The main difference between a CFO and Controller is one their focus point – controller needs to look into the rearview mirror while CFO must look out the windshield. In other words, be focused on the future and let the controllers deal with the past.

10. Know When to Buy and When to Build

build_vs. buyGrowth of every company usually comes in these three ways:

  • Increasing core business volume (organically)
  • Building new capabilities, products, or lines of business
  • Making acquisitions

You are now probably asking, how you as CFO can help your company decide when to buy and when to build?

For most companies (including UPS), the preferable option is the first one. [tweetthis]Grow organically makes sense when the abilities you must add are a natural extension of the basis of your business.[/tweetthis] In that case, the time and resources required to add these abilities will likely be constructive, and it will be easier to meet rate-of-return requirements.

However, sometimes building capabilities in-house can cost too much or take too much time. That way you are letting your competitors get critical competitive advantages and acquisitions make more sense. So, make sure to buy capabilities rather than market share. Also, try to avoid the bait to make trophy acquisitions. Companies need to make most acquisitions to fill in capabilities they don’t already have and can’t easily build. Capabilities tend to last a lot longer than temporary spikes in market share.

What’s more, when acquisition madness hits your industry, your company can easily be tempted to make a trophy acquisition or even few of them. Ok, paying a premium price for a premium company can be a good solution only if you do your homework. However, more often scenario is that the projected savings and revenue synergies don’t fully occur because of incompatible cultures and conflicting business models. So, acquiring smaller and cheaper company that is considered fixer-upper can pay off bigger if you agree on a longer road to travel. Whether the company decides to build or buy, the strategic CFOs need to serve as a neutral arbiter, to perform modeling and present financial implications and risks for each new growth opportunity.

Conclusion

At the end, the general advice you should listen is to never forget about the needs of today’s employees. Work is something that people do, not a place they go to, so a manageable career and life balance is important to everyone. You should circulate amid your colleagues every day and make sure that both, your dedicated level of involvement and your communication with them, be formal as well as informal. So, socialize with your team and become involved in the interoffice “water cooler” conversations. If you manage to have all mentioned habits you will definitely understand your employees and work in favor of your company dynamics.