Gartner recently released their CFO perspective on the 2023 CEO survey which details how CFO and CEO priorities differ for 2023 and 2024.
If you're familiar with my work, you'll know that I obsess about helping my CFOs and their teams deliver value to their organisations. Inevitably, the question comes up, 'so what is value?'. Which is an excellent question because as the saying goes, if a tree falls in the woods and no one hears it, did it really happen? It's a little like performance outcomes. If a CFO and their team are working on something that doesn't align with your CEOs priorities, does it really matter?
The short answer is no.
So I thought I'd share some of the insights included in the report, so you can start a conversation with your CEO and ensure you're aligned on the core priorities and areas of value that you are providing him/her and your organisation.
Where CEOs and CFOs are aligned
Both CEOs and CFOs agree that growth is the top strategic business priority.
What was interesting, however, was the next set of priorities were actually different.
Where there is a disconnect between priorities for CEOs and CFOs
People and technology
Gartner's report shows that CEOs really understand that people are the most valuable asset of the organisation. They really see people as the attribute that was sustaining through technology and that differentiating through their people will be the guiding light. Contrast to that of the CFO's priorities which were more about the tactical thinking of AI and implementation of new technology. Now, CEOs also had these as priorities, but were seemingly more considered and intentional about what business outcomes were required and therefore what technologies (and associated vendors) were needed to support those outcomes.
Enabling outcomes through access to capital
Speaking of outcomes, CEOs were definitely outcomes focused and the need for being agile and responsive to capital requirements and needs was topical in the report. Unsurprisingly with the state of the economy, the ability to quickly shift capital where and when you need it was seen as a critical area of focus for CFOs. As was their ability to think 'customer first' as it relates to the impact of infationary impacts and consumer spending.
As a result, cost optimisation is back on the cards across the board for both CEOs and CFOs, but given this has been a focus for CFOs since at least 2022, this requires CFOs to shift their thinking from cost minimisation, to optimisation and innovation.
CFOs need to stay focused on the big picture
In short, it's evident in the survey that CEOs are really focused on the bigger picture strategy and organisational outcomes, where we're seeing CFOs still think at a lower level on the tactics.
And this comes to the core of the CFO challenge. How to stay, think and operate 'above the line' when there's still the 'below the line' factors to consider. But beyond that challenge, today I want to discuss something more important than the 'doing'.
The most important attribute in the CEO-CFO relationship
These distinctions are important, because trust is the most important attribute in the CEO-CFO relationship. In our Beyond the Boardroom offsites, where we work with CFOs that are on their journey to CEO, the #1 most important success factor that our CFOs say is the level of trust the CEO has in them.
Don't mistake friendship and reliance for trust.
A truly trusted partnership between a CEO and CFO does not only mean they rely on you to be their sounding board and 'fixer'. It means they proactively seek your guidance and recommendations, engage in conversations with you that have a healthy level of tension in them, and on balance, they take your recommendations and guidance on board.
If they enjoy talking with you, but then go and do what they want to do anyway regardless of your view, then that does not reflect a trusted CEO-CFO partnership.
What's going to put your CEO at risk?
Why? You might ask.
Let's put ourselves in the shoes of our CEOs for a minute. One of their major challenges is their interaction with the Board of Directors.
What's going to put your CEO at risk? Looking stupid in front of the Board, losing his or her credibility and therefore ultimately loss of board trust. And what makes a CEO look stupid? The numbers; the financial statements and assertions to the marketplace.
In fact, as you know, errors or misrepresentation in the financials can put your CEO in jail. Poor analysis, inferior decision-making and poor judgment leads to loss of shareholder, stakeholder and overall market confidence.
For public companies this all comes together at the Annual General Meeting (AGM), where the CEO's got to stand up and make a presentation to the shareholders. For public companies, this happens at the Board. But what the CEO presents is largely driven by the CFO and the work the CFO and their team does underneath that.
CEOs, therefore, need CFOs that are market ready. So that at any time (not just at Board meeting time), they can pull you in to 'front the market' – whoever your 'market' may be, internal or external – and communicate with confidence where the business is at and where it's going.
Here's the question – how much of the year do you as the CFO spend ensuring you (and therefore your CEO) are 'market ready'?
What this means for CFOs
This means CFOs carry the responsibility of knowing that when the CEO is being judged, that they are in fact being judged second hand by the CFO's expertise.
That every time the CEO fronts the market, talks with the banks, the capital markets, they are relying on their ability to implicitly trust the guidance that you have provided them, and the analysis that you have done to support that guidance.
So how tuned in are you to being that real bringer of value to your CEO? To being 'market-ready' to stand alongside your CEO at a moment's notice?
What your CEO doesn't need
If you're thinking this is sounding a little full-on then good. Your CEO doesn't need a shrinking violet, a CFO who has low self-confidence, doesn't speak up when they know they should or even worse, doesn't trust themselves.
Nor do they need someone who is simply a talking head – that has a very strong business persona but that doesn't have the ability to be vulnerable and have a real, genuine conversation. (This is why compartmentalising work is no longer effective. It shuts off your CEO's ability to trust you.)
What your CEO really needs
■ Inspires trust and confidence in others including their team, their executive peers, their Board and the external markets.
Your CEO needs to have the confidence that you can bring others along a journey and influence them to deliver outcomes.
You need to not only be your CEOs safe pair of hands, but the smartest thinker, too. But that's a topic of another time...
What would it mean to you if you had powerful executive presence?
Would your CEO say you have 'powerful executive presence'?
How would your people, business and community benefit if you had powerful executive presence?