The Strategic Leaders Every CFO Needs in Their Teams

09/25/2023 06:56:21 +0000

If I were to ask your leadership team the proportion of time they each spend 'above the line', that is, focused on Strategic Leadership and Change Leadership, compared to 'below the line' – doing the BAU functions of Controllership and Team Leadership – what do you think it would look like?
 

This is a question I ask every finance leadership team (FLT) or group of senior finance leaders I work with and the answer is typically around 20-30% Strategic Leadership/Change Leadership and 70-80% Controllership/Team Leadership.

The follow-up question, of course, is this: what should the ratio be?

And as the CFO that's exactly the question you should be asking yourself.

Above the line/below the line: what it means

Let me briefly remind you how the 4 Quadrants of CFO Leadership have been developed. They encompass the expanded remit of today and tomorrow's CFO, including both non-negotiable technical skills and amplifying non-technical skills (X-axis) and the commercial and compliance domains (Y-axis). More and more I'm being told by CFOs that they 'need to be more commercial' so it stands to reason that their focus needs to be 'above the line'. The challenge, of course, is that we can't ignore the 'below the line' activities which is why we call the 4 quadrants of CFO leadership an 'inclusive' quadrant model. Our job is to know when to dial up/down our focus in each quadrant to achieve our priorities. It's a bit like a DJ – they need to know what songs to fade in/out and mix with each other to keep people on the dance floor all night!

'Above the line' = Commercial
'Below the line' = Compliance
 

Hence the significance of the (on average) 25:75 ratio of the senior finance leaders above.

If the members of your senior finance leadership team are spending the vast majority of their time below the line, then your ability to be more commercial and drive greater commercial outcomes for your business relies on you and you alone.

5 consequences of finance teams that primarily operate 'below the line'

There are several consequences that may occur if you are the only person in the Finance team that spends most of their time 'above the line'. Here are 5:

1. The brand of your finance team will continue to be perceived as a support function or 'back-office'. Their ability to add any real value will be limited.

2. The perception of your team by the business will inevitably impact you and your own profile within the business.

3. Your team won't be able to grow, develop or achieve the innovation needed to help deliver your company's growth strategy.

4. You will get bogged down in the detail.

5. A large skills gap likely exists between you and your leadership team, hence no clear successor. The path to your own succession/ next step will be longer.

The strategic leadership attributes required in your team

While most finance leaders will nod their head in earnest acknowledging their need to be more strategic, many of them have never been shown or taught how to be strategic. Which is why I was very impressed when a very senior leader in am FLT I was working with asked 'I know this sounds obvious, but what does it mean to be strategic?'.

This is a question you should ask and answer as a group with your FLT, because like most things, the answer depends on the context.

However, since the pandemic, I've noticed there are 3 core areas that need to be improved across finance leaders when it comes to growing their ability to be strategic. Those are:

  • Self-leadership: the ability to set-up oneself to contribute and operate at their best.
  • Executive presence: being seen and heard in an authentic and effective way.
  • Strategic thinking: Thinking about the 'what else' and connecting the dots across the business to drive performance.

These areas – when present – give both you and your team:
1. Credibility: your business can confidently say 'we have the best CFO and Finance team to help us to achieve our vision'.
2. Impact: you make a measurable, observable difference. You and your team will leave a legacy.
3. Succession: the work you deliver provides the opportunity for you and your team members to grow and elevate to the next level in your respective careers.

The Strategic Finance Leader

 

Why these attributes are important (and what you need for each)

Self leadership: when the individual members of your team aren't demonstrating self-leadership, you and your team lose the ability for growth. Growth in leaders is an imperative for businesses on a growth trajectory. The 3 key capabilities needed for exceptional self-leadership are:

- Pushing the boundaries
- Prioritisation
- Planning and preparation

Executive presence: When your leaders don't exude executive presence, they become invisible when with each other or their stakeholders. Without visibility, the business is less compelled to bring finance into the conversation, therefore finance team risks giving up their seat at the table. The 3 capabilities needed for exceptional executive presence are:

- Leadership brand
- Influence
- Presentation and visual storytelling

Strategic thinking: When there is a lack of strategic thinking capability at the leadership team level, the finance team cannot create value. At its worst, this is when 'shadow finance' teams pop up around the business. Finance leaders need to take a broader view of the business so they can offer more and elevate to the next step. The 3 priorities of strategic thinking are:
- Connect the dots
- Stakeholder-centricity
- Value creation

What is your team's ratio of above the line: below the line activity?
Credibility, impact or succession: what's most important to you right now?
In what attributes of strategic leadership do your team need to elevate in order to achieve your organisation's strategy?



Author: Alena Bennett

Alena works with leaders and their teams to connect technical and leadership skills so they can deliver to deadline without killing their people.
 
She is a mentor, trainer, facilitator and coach. Contact her today on [email protected]
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