The state of the union
It was wonderful to get together over breakfast with such an inspired group of CFOs and talk about the challenges that lie ahead. And boy are there many! We discussed:
• the labour and talent shortage
• interest rates and inflation
• how does hybrid working really work?
• supply chain issues
• transformation project delays
• and more!
We recognised that whilst there is unlikely to be the volatility caused by the lockdowns we've experienced in the last 2 years, the compounding impact of the challenges above would be significant particularly as we've seen people return to work in January without the 'freshness' that usually comes with the new year. In fact, people are tired. As a group we discussed the key success factors for CFOs necessary to lead their businesses and teams through another uncertain year.
As a CFO, you're in a unique position of intelligence. You can see the writing on the wall before others, and often know exactly what needs to be done. The tricky thing is getting those others on board, and that's where most of the frustration builds. As bestselling author and marketing and leadership expert Seth Godin says, "Honking at traffic serves no purpose other than to express a need to control the uncontrollable." However, the best way to get others to see your point of view, is to see theirs first.
As we discussed yesterday, this is going to be another year of continual change. But here's the thing about change:
1. Change fatigue is very real.
2. People's priorities are different.
3. Some people just don't like change.
This means there is no room to be creating change for the sake of change. Change needs to result in some kind of improvement, or what's the point? Not only that, but the people involved need to be convinced that change will result in improvement.
This goes directly to the point of influence. Influence is essentially the capacity to have an effect on another person's views and/or actions. It's an exchange between two people that moves them from one place to another. Only by exerting influence can we create change.
No one needs to say 'no' like a CFO does
As a consequence of holding the purse strings of the business, CFOs have to say no or 'slow down' a lot. Given the year ahead of us, this might be a frequent occurrence. Unfortunately, there's some perception/brand damage that comes along with that. For the sake of the business you'll often be making judgement calls that are unpopular, so your influence with those around you needs to be high. You have a responsibility to learn how to say no in a way that maintains a relationship.
Why managing politics is the CFO superpower
CFOs hold together all the parts of the business in large part due to their birds eye view of the financial performance and position of the organisation. That's a real testament to the value you bring to your organisation and speaks to the way your CEO or board perceives you. It's also a huge challenge, as you are expected to balance the different priorities, pressures – and oftentimes egos – of many different parties. You need to be able to unify people and move them forwards, instead of sitting by and watching them be dysfunctional. This is where a solid company vision and the ability to think strategically are key: the vision is a common anchor point to galvanise people around, and strategic thinking helps you be creative in how you connect each party to that vision.
Imagine you're sitting around the executive table watching a stand-off between two colleagues. Each party has a reasonable point and you don't know who is more correct, but you do know that the conversation isn't constructive and, without intervention, will continue to eat up meeting time.
Next thing, one of your colleagues is driving forward with an idea. The other colleague isn't saying anything, but you know from their body language that they are disengaged and won't support the initiative. You can see the problems and costs this will entail down the road.
Maybe you don't have to imagine! Many of us have found ourselves in situations like these. So what do you do? Speak up or shut up?
As CFO, you'll often find yourself balancing these two options. And all too often, we lean to the side of saying nothing. Maybe you're worried about upsetting the parties involved, or how it might impact your reputation or relationships. Whatever the reason, you decide it's easier to just keep your mouth shut.
But here's the thing.
CEOs want their CFOs to step up and speak up
If you want to be your CEO's right hand, the voice of reason to the CEO's voice of vision, staying silent simply isn't an option. In fact, this is playing into the organisational politics that your CEO needs you to cut through. If you've found yourself staying silent, chances are it's for one of two reasons:
Self-preservation: When we avoid speaking up to protect our own reputation, we are as bad as the people overtly playing politics. Really, it's quite selfish. As the saying goes, 'the standard you walk past is the standard you accept.' A good leader puts their team, not themselves, first.
Not wanting to pick sides: Especially if you're new, you don't want to put people offside – people that you're trying to establish yourself with as a peer and partner. But while you might think you're shutting up for the benefit of the team, what you're really doing is denying them the expertise you were hired to provide.
As CFO, your role is to use your expertise to move the team and the organisation forward. And a big part of that is communicating your ideas and opinions. If you want to be seen as a leader, you need to actively lead – and that means speaking up. To help get past the social barriers to being loud, come from a place of 'we', making it clear that you are putting the team and organisation's interests first. This is where it's important to have an understanding of the organisation's vision – it's the highest-order common goal, something the whole team is working towards. Talking through that perspective is how you diffuse politics, galvanise your executive team, and unite rather than polarise.
What are the macro and micro changes your business is susceptible to this year?
How are you going to position yourself be your CEOs 'right hand' through 2022?
Will you step up when it matters?