The CFO strategic expert and commercial co pilot - A workplace study
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The CFO strategic expert and commercial co pilot - A workplace study



The role of the CFO within business has never been more challenging or more important. With ever-growing demands from the board, the business and external stakeholders, it’s no longer enough for ...

The role of the CFO within business has never been more challenging or more important. With ever-growing demands from the board, the business and external stakeholders, it’s no longer enough for today’s CFO simply to be ‘good with numbers’. Today the challenge is much more around strategy, commerciality and leading a finance team that’s a real driver of business success. But what does that mean in practice?

Read on to find out...



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The CFO strategic expert and commercial co pilot - A workplace study The CFO strategic expert and commercial co pilot - A workplace study Document Transcript

  • Page 1 0f 10Market overviewAsked about the challenges their organisations currently We asked CFOs:faced – and if they differed from the previous two years. ‘What are your keyOur Finance chiefs reflected the different stages their business challenges?businesses have reached in the business recovery cycle. They told us:Some are still battling back from the Rob Hudson, UK CFO of global information ‘Preparing for growth;recession, a time when it has been harder business Experian explained his current dealing with regulation The CFOto get funding from banks, and customers challenge: “The last two years has beenhave been focused on driving the keenest about focusing on our financial services and managing change.’price bargains possible. But almost all the business while growing new verticalbusinesses we interviewed commented segments. Now, as we diversify into SMEs, Strategic expert andthat their current focus was how best to the Public Sector, telecoms and insuranceinvest in the business to ensure it was – as well as new geographic markets - it’sready to meet the growth demands that about identifying and adopting the right commercial co-pilotthe upswing will eventually bring. opportunities. There are plenty out there: the trick is to find the best ones that offer“The biggest challenge is the need to us the best chance for success. Theninvest in the business to get it ready for it’s all about aligning all the necessary “It’s about identifyinggrowth,” commented Robin Sharpe, CFO resources to meet the opportunity and adopting the rightat Slipstream Ltd, a leading marketingservices business supporting global A Badenoch & Clark workplace studyopportunities. There are plenty Other challenges on the radar:technology vendors. “It’s still a very May 2011 Compliance and regulation provided a out there: the trick is to finddifficult market, and requires really careful recurring theme with an overwhelming the best ones that offer us theconsideration and fine tuning so that we feeling that the Board – led by Finance - best chance for success. Thencan balance cashflow with investment.” has to deal with an ever-more intrusive regulatory environment. For industries it’s all about aligning all theFor sales-led businesses such as such as financial services, rail, water and necessary resources to meetinsurance, coming back from a period the airline industry, there was growing the opportunity.”of heavy customer defection has been pressure not just to satisfy shareholdersthe challenge for the likes of RIAS FD, and all the organisation’s internal Full name / OrganisationNick Lemans. “We’ve gone through the stakeholders, but external regulators too.period of cutting costs and paring spendback to the bone, but the focus of the “We operate as part of a bullish transportbusiness has now moved forward. We’re operator in First Group, but have tonow working with the business to build balance their stretching revenue andan attractive brand strategy that will profit targets with the service levelmake RIAS stand out in a very competitive agreements set by Transport Scotland,”market, but is also cost effective and commented Scot Rail’s Billy Connelly.sustainable.” “Sometimes it’s a particularly tricky tightrope to tread.”Financial Services has clearly been anarea that has suffered significantly in the The regulation picture potentiallydownturn, but having steered through the becomes exponentially more problematicchoppiest waters, our CFOs are definitely when there’s an international dimensionlooking forward. One midlands-based involved, as BUPA International’s Wayneinsurer is now focused full-time on Close observed: “Different regulations arepreparing the business for floatation, in play in almost every market in which wewhile other CFOs have championed new operate. It’s my job to keep all the platesbusiness areas as a way of building future spinning: to ensure that a problem ingrowth. one market can be overcome and doesn’t become a wider issue.”
  • The CFO: Strategic expert and commercial co-pilot / A Badenoch & Clark workplace study / May 2011 Page 2 0f 10The CFO: Strategic expertand commercial co-pilotA Badenoch & Clark workplace study Foreword The role of the CFO within business has never been more It would appear that CFOs continue to struggle with the balance of challenging or more important. With ever-growing demands from skills needed in their teams and experience challenges in balancing the board, the business and external stakeholders, it’s no longer the technical and behavioural capability of their teams; the mix it enough for today’s CFO simply to be ‘good with numbers’. Today the seems is all important. This may well reflect the demands on teams challenge is much more around strategy, commerciality and leading in the recent downturn to focus on managing the numbers tightly. a finance team that’s a real driver of business success. But what But if CFOs genuinely believe they need a different skill base – does that mean in practice? and we’ve no reason to doubt this – they do need to begin the process of mapping out exactly what this should look like in their We asked CFOs and FDs across the country for the inside track on organisational charts. the challenges they face; the expectations they have to live up to and their thoughts on their role, the function they lead and its place Part of the issue lies, we believe, in not having a clear set of in their organisation’s drive for success. We asked them to define competencies for finance people and a structured way of identifying the kind of skills they’re looking to grow and recruit – and indeed these in potential new recruits. If they are serious about the need what skills CFOs need to put them on track to a stellar future. What to shift finance up a gear, CFOs need to bite the bullet and critically they all demonstrated was the rapidly-changing role of Britain’s top assess the current capability of their people and, where necessary, finance professionals. consider bringing in new blood with the required skill set. We have reported for some time the increasing pressure on So, take a look inside to get a rare insight into the challenges of finance teams to be more commercial and to display stronger today’s CFO. communication and influencing skills. This message was reiterated by the CFOs in our research. While technical expertise is often an entry card to a career in finance, it’s increasingly obvious that those who progress to senior management also need a wide range of softer skills. These skills are those of a broader, more strategic manager than the ‘number cruncher’ of old. While many CFOs recognise the future skills needs of their teams and some acknowledge that technical expertise may take second place to communication and influencing skills in the future, it’s important to note that, as finance recruiters, we’re not necessarily seeing this Lynne Hardman translate into the typical job specification for an accountant. Managing director, Badenoch & Clark / May
  • The CFO: Strategic expert and commercial co-pilot / A Badenoch & Clark workplace study / May 2011 Page 3 0f 10Market overviewAsked about the challenges their organisations currently We asked CFOs:faced – and if they differed from the previous two years, What are your keyour finance chiefs reflected the different stages their business challenges?businesses have reached in the business recovery cycle. They told us: Preparing for growth; “The biggest challenge is the need to Coping with change remains a very ‘live’invest in the business to get it ready issue for most of our CFOs who have seen dealing with regulationfor growth,” commented Robin Sharpe, their organisations go through significant and managing change.CFO at Slipstream Ltd, a leading marketing transformation in the recent past – or areservices business supporting global in the midst of transformation now. Richardtechnology vendors.” Gray, finance GM at BMI summed up what can be a painful experience. “BMI wasFor sales-led businesses such as insurance, acquired by Lufthansa in July 2009. Sincecoming back from a period of heavy then, we’ve had to move from a cash andcustomer defection has been the challenge P&L driven non-corporate, relationship-led,for the likes of RIAS FD, Nick Lemans. owner-operated organisation to one that’s “We’ve gone through the period“We’ve gone through the period of cutting fit for purpose in a large process-drivencosts and paring spend back to the bone, corporate empire. It has been a massive of cutting costs and paringbut the focus of the business has now cultural change at all levels.” spend back to the bone, butmoved forward. We’re now working with the focus of the business hasthe business to build an attractive brand Finally, not all our CFOs have struggledstrategy that will make RIAS stand out in with the effects of the recession. Equiniti now moved forward. We’rea very competitive market, but is also cost group is a specialist outsourcer for now working with the businesseffective and sustainable.” pension administration, share regulation to build an attractive brand and related services. Its CFO, AlasdairCompliance and regulation provided a Marnoch confided: “We rather like strategy that will make RIASrecurring theme with an overwhelming recessions as many organisations choose stand out in a very competitivefeeling that the board – led by finance – to outsource their non-core services. We’re market, but is also costhas to deal with an ever-more intrusive seeing a number of opportunities comeregulatory environment. For industries out of the public sector as we know we can effective and sustainable.”such as financial services, rail, water and deliver services much more efficiently.”the airline industry, there was growing Nick Lemans / RIASpressure not just to satisfy shareholdersand all the organisation’s internalstakeholders, but external regulators too.“We operate as part of a bullish transportoperator in First Group, but have tobalance their stretching revenue and profittargets with the service level agreementsset by Transport Scotland,” commentedScot Rail’s Billy Connelly. “Sometimes it’sa particularly tricky tightrope to tread.”
  • The CFO: Strategic expert and commercial co-pilot / A Badenoch & Clark workplace study / May 2011 Page 4 0f 10Today’s CFO“For today’s CFO, technical skills are just an entry point. We asked:It’s about shaping the business.” So said Allan Dowie, What are theCFO at Clyde Union Pumps and his view was reflected by pre-requisites formost of the CFOs we spoke to. today’s CFO? Our survey told us:The terms they continually referred to were of the business. But we need to be A key business player,‘strategic’, ‘forward-facing’, ‘commercial’, adaptable too – able to manage cost‘flexible’, ‘inspiring’ and ‘influential’. reduction one year but then able to with commercial drive business growth the next.” acumen; a strategicSo what makes a great CFO today? Each of view of the business;our interviewees looked to their peers to “My job’s taking me further and furtherbuild an amalgam of the skillset required from the nitty gritty of the numbers,” ability to managein today’s business environment. stated RIAS’ Nick Lemans. “I’d see myself people, risk and now as an interchangeable player in the change – and to earnNetwork Rail’s John Schofield said: top team leading the business. That means“The top finance roles are becoming much being able to communicate with the board the respect of themore strategic – the technical elements of in the language of the business, painting board. Financialthe role are now simply intuitive. The real a picture and telling a story in a way that’s skills are a given.obsession is people and change. We’re not going to push their buttons.”in a back office or ivory tower any more,and are far more strongly aligned with Ozgur Kilic, CFO for Novartis Vaccines andHR in delivering an enlightened, business Diagnostics concurs: “I hardly ever talkdriven approach. Finance is now a driver finance with my boss. My conversationsof the business.” reflect my role, which is to get involved in business decisions, strategy andFor Guy Adams, the finance director at influencing the direction of the business.” “We’re not in a back officeNSL Ltd, the commercial arm of NationalAir Traffic Services, engagement and or ivory tower any more, andadaptability are core elements of the are far more strongly alignedfinance DNA. “We need to be able to with HR in delivering anengage with the business on thebusiness’s terms in developing strategy. enlightened, business drivenThat means being credible and convincing approach. Finance is now acommunicators with a deep understanding driver of the business.” John Schofield / Network
  • The CFO: Strategic expert and commercial co-pilot / A Badenoch & Clark workplace study / May 2011 Page 5 0f 10The CFO as functional headThere’s an art to being a great functional head, and our We asked:respondents were clear on just how vital it is to create the What’s important inright culture for success in the finance function. your managing style when it comes to leading the financeOne CFO painted a picture of a past Clyde Union Pumps’ Allan Dowie added:incumbent who seemed intent on “It’s essential for the CFO to be a function?keeping the function in the dark ages. role model to the finance team of the“He insisted that no-one but him talked behaviours we want from them. I knowto any other function in the business,” I have to get my team to engage and Our survey told us:the CFO recalled. “He also gave everyone act with the business – not to be aloof People managementin the team very specific responsibilities or falling back into finance-speak. Theand didn’t allow anyone to work on any business wants challenge and I want is key: build the rightpiece of work that he didn’t consider was the finance team to get the business to team and give them all‘theirs’. It was divide and rule. No-one recognise that they should spend money the support they needcould challenge him; the team operated in as if it was their own.”silos with massive gaps and unnecessary to do a great job. Don’tduplication and morale was through the get bogged down infloor. It has taken me the best part of two the detail. Be confidentyears to even begin to turn that round.” in delegating to your people. “The business wants challenge and I want the finance team to get the business to recognise that they should spend money as if it was their own.” Allan Dowie / Clyde Union
  • The CFO: Strategic expert and commercial co-pilot / A Badenoch & Clark workplace study / May 2011 Page 6 0f 10The evolution of the finance teamNo longer can finance afford to be a back-office oasis intent We asked:only on reporting what’s already happened. The niche the What role does thefunction fits into today is forward-looking playing a key role finance team play inin decisions and controlling the future of the company. the business today?“It’s imperative for finance to be in Providing that kind of support requires Our survey told us:charge of events, not have events a different kind of finance person from Much more commercial;controlling us,” stated Slipstream’s the ‘norms’ of a few years ago. NetworkRobin Sharpe. “At all levels, we must Rail’s John Schofield sums up the type of a business partnerscrutinise spending, challenge plans person more prevalent in today’s finance challenging businessand ideas and suggest solutions.” teams. “The key challenge for finance thinking on business is to build the right chemistry betweenCertainly finance now seems to be more the appropriate finance person and their terms. Outgoing,willing to integrate with the business as business peer,” he commented. “The communicative andsupportive contributors to the decision business wants its finance people to understanding.making process rather than merely being understand the business and be ablereporters after the event. “My team’s to speak and think in business terms.key challenge is to support the needs of That translates into three key attributes:the commercial team and ensure that as to deeply understand the businessa business we have sufficient resources area they’re involved in and the overallavailable for the business to meet its business context; to be a skilled andstrategic targets,” explained Julia Wilson active communicator, and to challengefrom S&A Foods. ideas and norms.” “My team’s key challenge is to support the needs of the commercial team and ensure that as a business we have sufficient resources available for the business to meet its strategic targets.” Julia Wilson / S&A
  • The CFO: Strategic expert and commercial co-pilot / A Badenoch & Clark workplace study / May 2011 Page 7 0f 10Today’s finance skillsetTo some degree, skills were lacking in the teams of just We asked:about every CFO we interviewed. Many CFOs noted that What kind of skillsetthey had inherited fairly traditional finance teams and is required in financewere in the midst of cultural change. today, especially for managers aspiring to beAt Novartis, Ozgur Kilic noted there was “I look for people with a ‘bit of spark’,” CFOs? Are any of thesecultural change necessary both for the noted RIAS’ Nick Lemans. “Some are skills in short supply?function and the business as a whole. ACCA/CIMA/ACA qualified, but that’s not“We need to make sure that finance actually the requisite for many jobs inisn’t at the back of the queue when it finance. What’s needed most is the abilitycomes to the business making strategic to understand and actively support the Our survey told us:decisions. But to change the perception needs of the business. Accounting skillsof the business, we have to upgrade our are a given. Theteam’s business partnering skills and Meanwhile, Network Rail’s John Schofieldgeneral awareness of the business. Being was unequivocal: “We need to change the build is excellence inable to speak the language of the people traditional finance mindset: to understand communication andthey’re interfacing with helps our team that we have to break the umbilical that influencing, adaptability,change the business perception that we’re states that anyone in a senior finance rolethe team that likes to say ‘no’, to being has to be a qualified accountant. willingness to engageseen as a team that can come up with within the business andalternative solutions to business issues.” What was very apparent from the an equal willingness to responses we received though was the“We need individuals who are both well need to get the mix right to ensure the influence and challengerounded and grounded,” added Umbro’s finance team can operate effectively. for the good of theCFO, Gary Brown. “What’s also important the ability to multi-task in what can be At Bupa International, Wayne Closea very fast paced working environment.” has worked to build a team that has the right personality in the business.So what skills do CFOs currently find “I’ve deliberately built a diverse team,lacking in their teams? Most were generally recruiting people not just capable offull of praise, but when pushed, a CFO from doing the job they’ve been employed tothe supply chain industry stated: “It’s the do, but also able to step up and grow insoft skills; the interpersonal stuff. Finance the finance team. There is a mix of people “What’s also important ispeople like to interact with finance people. from diverse finance backgrounds – andThey get a bit frayed when they have to go all the expected qualifications – who can the ability to multi-task inout into the business.” expand commercially. what can be a very fast paced working environment.”Many businesses are looking for financemanagers who have experience from Gary Brown / Umbroother functions that they can bring tothe mix, which steered our discussioninto the kind of people our CFOs recruitto strengthen their team and prepare forfuture
  • The CFO: Strategic expert and commercial co-pilot / A Badenoch & Clark workplace study / May 2011 Page 8 0f 10How will senior finance roles change?In terms of facing the future, we asked a sub-group ofrespondents to answer: ‘How will the top finance roles “The CFO role is going tochange most moving forward?’ evolve further to focus on growth and delivering changeOur respondents saw commerciality, Experian’s Rob Hudson painted the to adapt to the market.”strategic input and increased impact both picture of tomorrow’s CFO. “Business William Medlicott / ITVat board level and across the business as direction and finance direction will bethe CFO drivers moving forward. interchangeable. The CFO will have strategic foresight bolstered with great“We’re in a changing marketplace,” relationship and influencing skills. TheWilliam Medlicott of ITV commented. role will be to make change happen“The CFO role is going to evolve further to through the art of the possible.”focus on growth and delivering change toadapt to the market.” Umbro’s Gary Brown Clyde Union Pumps’ Allan Dowie saw “This job has to be at the levelechoed this saying: “We have to become the role going even further. “I see themore strategic and execution-orientated. CFO moving more into the COO box with where we’re not concernedThis job has to be at the level where we’re more emphasis on further managing about the minute details,not concerned about the minute details, external relationships. In future, I think because we can delegate thesebecause we can delegate these to trusted we’ll be thinking less about finance, andmanagers.” focusing more on taking business-critical to trusted managers.” decisions.”An insurance CFO told us: “The role will Gary Brown / Umbrobe ever more about change leading tobusiness transformation. Control remainsa challenge – but it’s our bread andbutter. We have to manage risk, it can’tbe avoided. But the challenge is to findand maintain the right balance of riskversus opportunity. And, ever more, theCFO will play a leading role in managingthe external stakeholders we workwith and for – and who will enable ourtransformation to happen.”
  • The CFO: Strategic expert and commercial co-pilot / A Badenoch & Clark workplace study / May 2011 Page 9 0f 10The up-coming challenges for CFOsThe challenge for all is to extend the capabilities of theirfinancial systems beyond core activities into new areas “Finance has to be an activeintegral to driving productivity gains higher. and involved player in this demonstrating our position asFor Allan Caven, a group FD from the For all, the demand is to take the ‘value champions’.”East Midlands, it’s about cementing ‘commercial co-pilot role’ more than a Gary Brown / Umbrofinance’s hard-earned respect in the trusted adviser and integral to driving thebusiness. “Businesses are now looking business forward. Southern Water’s CFOfor real direction from finance. As a result, Mike Jones summed up the complexitiescommercial and communication skills are of the challenge. “The scale of the rolekey. We must now live up to our billing as is ever-widening. It’s about businessan integral part of the business – we’re development, security, stakeholderno longer just a necessary evil.” Adecco’s management and keeping on top of theNeil Martin added: “CFOs must make regulations. There are two distinct sidesthe most of a very fortunate position of of business and I often wonder how I can “The scale of the role isbeing able to look at the entire business fight the alligators and drain the swamp at ever-widening. It’s aboutlifecycle from concept to cash. The magic the same time!”is in then being able to turn more of the business development,organisation’s income to a positive on the security, stakeholderbottom line.” management and keeping onFor a number of CFOs who have been top of the regulation.”through major change, the way forward Mike Jones / Southern Wateris putting their new strategies intopractice. That’s the case for Gary Brownat Umbro: “The last year has been aboutstrategy development, now the focus ison execution, taking the brand into newmarkets and regaining brand control.Finance has to be an active and involvedplayer in this demonstrating our positionas ‘value champions’.”
  • The CFO: Strategic expert and commercial co-pilot / A Badenoch & Clark workplace study / May 2011 Page 10 0f 10Details and methodology Related articlesThis report was researched and written for Penny Penman, Michael Quinn, Richard Career planning essentials for employersBadenoch & Clark by Mark Shanahan of Hatchett, Mark Norrish, Kay Senior, A Badenoch & Clark guideLeapfrog Corporate Communications Ltd. Danielle Coleman, Jenny Burton, Helen Developing your career plan Goold, Maureen Ford and Tom Cliffe. A Badenoch & Clark guideOver 40 Interviews were conducted Employer branding essentialsbetween November 2010 and January 2011 We are all immensely grateful for the A Badenoch & Clark guideby Mark Shanahan and Badenoch & Clark’s time and candour of all the contributorsDave Fleming, Ian Machell, Ben Searls, to the report. Your personal brand: making yourself attractive to employers A Badenoch & Clark guide Copies can also be requested from Margaret Emmens atAbout Badenoch & Clark margaret.emmens@badenochandclark.comWhether you’re looking for a fresh career organisations, understanding theirchallenge or you’re an employer looking precise needs and getting a good feel Other Badenoch & Clark resourcesto recruit talented professionals, you’ll for their culture. And our focus onappreciate working with a recruitment building industry knowledge means Insight Regular analysis of current trends in your market.consultancy that really understands your we can advise on broader recruitment Visit www.insight.badenochandclark.comneeds. trends in your industry. Connections Our unique magazine for customers and contactsAt Badenoch & Clark we focus on connecting Our UK-wide presence means we have of Badenoch & Clark, published three times ofthe right organisations with the right the strength and depth to deliver a truly year. Packed with comment, opinion, news andpeople – whether for permanent, interim, tailored service. It’s not a one-size-fits- analysis on recruitment, talent management and broader business issues. See past issues atcontract or temporary accounting and all approach. We tailor our advice to www.badenochandclark.comfinance positions. We understand that it’s your particular needs. We listen.much more than filling vacancies. It’s about Career guides A series of ‘how-to’ guides for employers andmaking the right connections between Which means that when it comes to employees focusing on topics including employerskills, cultures and roles. building your team or finding your branding, career planning and work-life balance. next career move, there can by only clients tell us that we’re particularly one choice of accounting and finance A quarterly index tracking employee happinessgood at getting under the skin of their recruitment partner. across the UK office workforce. Results by profession and region.Contact usFor more information on our workplace study please contact:Heidi Waddington, Operations Director Accounting & Finance on01179 251 600 or at heidi.waddington@badenochandclark.comMargaret Emmens, Marketing Manager on 020 7300 9235 or