Mastering the four key CFO's roles: the job of CFO is quite different from what it was a few short years ago. In order to find balance, it's worthwhile to take stock of the CFO's four faces, and know what's important, what you absolutely have to do and what you can delegate.

The role of "CFO" isn't just under pressure--it's getting out of control, replete with restatements, corporate mergers, accounting scandals and Sar-banes-Oxley. Add never-ending pressure to cut costs and grow revenue. And every public company CFO's least-favorite pastime: babysitting the latest group of activist investors.

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A growing number of CFOs also find themselves saddled with work that used to belong to the chief operating officer (COO)--before this job role was eliminated--as well as with greater personal responsibility for the company's potential missteps. In essence, much of the CFO job now has little to do with finance. It's no wonder that so many in this role are suffering from burnout before they reach the top--and are retiring earlier. Turnover among Fortune 1000 CFOs continues to rise dramatically, while the average tenure has dropped to less than three years.

Some CFOs may view their growing list of responsibilities as a step toward becoming the CEO, but that's often just wishful thinking. In many cases, the additional work simply distracts CFOs from their core finance responsibilities while undermining their performance and reducing their chances for advancement.

One Title, Four Roles

Based on extensive studies, Deloitte & Touche USA has concluded that the CFO job is comprised of four roles, or faces, each with its own unique responsibilities and demands: steward, operator, strategist and catalyst.

The steward protects and preserves the assets of the company by effectively managing risk and keeping the books accurate. The operator conducts basic financial operations efficiently and effectively. The strategist influences the company's overall direction. And the catalyst instills a financial mindset to execution and risk-taking throughout the company.

In some ways, the four roles are hierarchical--an individual must become proficient in one before moving on to the next. For example, until you can produce rock-solid reports and decision-support information, you shouldn't be worrying about operating efficiency or business strategy. Your main focus at this point is "steward." A look at each of the four faces will discuss what comprises each and how to move up to the next level.

ROLE #1 CFO as Steward

Over the past few years, companies have made major investments to address compliance with the Sar-banes-Oxley Act and other regulations. Yet the number of financial restatements per year has actually quadrupled since 2001. In many cases, the problems can be traced to basic accounting and infrastructure issues, such as inaccurate data or inadequate controls.

The steward role is to protect and preserve the company's assets and to comply with financial reporting and control requirements. This role may not be glamorous, but if it's not handled correctly, nothing else really matters.

Lessons learned from CFOs who have demonstrated that they know how to be effective stewards indicate they have the ability to:

* Standardize. Establish company-wide standards for systems, data and processes to help eliminate conflicts and provide a "single version of the truth."

* Own the data. Collaborate with the CIO and take responsibility for the collection and governance of financial and management reporting information.

* Focus on critical controls. Understand the company's financial reporting risks, then focus on the controls that are truly critical.

* Hire experienced, knowledgeable accountants. Help avoid restatements by hiring accountants with competencies in technical accounting who can do the job correctly the first time.

* Establish clear authority. Strengthen Finance's authority to make decisions. Clarify responsibilities.

ROLE #2 CFO as Operator

Once you have mastered the basics of reporting and compliance, the next step is efficiency. Because finance often plays a significant role in company-wide cost reduction, it only makes sense for other business leaders to expect you to run a tight ship.

The key to achieving desired results is to establish an operating model for finance that strikes the appropriate balance between service levels and cost. Many CFOs are turning to offshoring or outsourcing as a way to reduce costs without sacrificing quality. But, resolving this problem is not simply a matter of "throwing it over the wall" to an offshore location or external vendor.

Lessons learned from CFOs who have demonstrated that they know how to be an effective operator indicate they have the ability to:

* Centralize processes and services. Create centers of excellence and shared services centers that can drive efficiency and critical mass without sacrificing control or quality.

* Build a strong pool of internal talent. Develop people's skills. Deploy them on opportunities that fit their strengths and interests. And, connect them with others to share knowledge and foster a sense of belonging.

* Improve performance management. Design effective programs to measure and evaluate the finance staff's performance.

* Focus on critical workforce segments. Identify the workforce segments that make or break finance's results--such as leaders and technical accountants--and then devote extra effort in those areas.

ROLE #3 CFO as Strategist

In the strategist role, a CFO helps set the future direction of the company to enhance business performance and shareholder value. This is an area where you can have a significant impact. But, the only way to get a seat at the strategy table is first to master the roles of steward and operator--demonstrating you can get your own house in order.

Assuming the steward/operator minimum requirements have been met, the most significant challenge for an aspiring strategist is that the skills required are very different than the skills required to be a steward or operator. Effective strategists don't just understand the numbers, they understand the business. And, they don't just follow the rules; they help develop creative new approaches that redefine the rules.

Given these conflicting requirements, CFOs are needed more than ever to become involved with strategy. Given the complex business environment, companies need CFO involvement. Finance is needed to provide rigor, discipline and critical thinking--to be the voice of reason. Finance is also needed to clarify the connections among business activities, financial results and shareholder value and to show how business growth can be achieved profitably and reliably.

Lessons learned from CFOs who have demonstrated that they know how to be an effective strategist indicate they have the ability to:

* Work backward from decisions to data. Examine the decisions that need to be made, then generate reports specifically designed to meet those requirements. Don't just churn out data for its own sake.

* Translate daily activities into value. Deconstruct the company's operations to show how daily decisions and actions can affect shareholder value.

* Manage initiatives as a balanced portfolio. Use value-based portfolio management to evaluate and prioritize improvement projects.

* Establish a rigorous framework for strategic decisions. Relentlessly and continuously evaluate investments. Be willing to make difficult decisions when necessary.

* Spread the value gospel. Promote "value" as the lens to view all business activities. Foster a common language that makes the concept of value easy to understand and communicate.

To Gary Ellis, CFO for Medtronic Inc., "The CFO is not managing accounts payable, payroll, general ledger and those types of things." That, he says, is all run through a shared services center for the entire company. "The CFO's responsibility," he continues, "is more to partner with the business unit to achieve the strategic objective."

ROLE #4 CFO as Catalyst

Deloitte's study found that while most CFOs are still striving to master their roles as steward, operator and strategist, a few have managed to take their contributions to an even higher level. At this next level, they are helping the company execute its strategies and monitoring that tasks actually get done as promised. Why is this important? Because while a smart strategy points the way to achieving desired results, only effective execution can deliver it.

Indeed, the most effective finance functions use their financial savvy and value discipline to catalyze superior performance and execution in every part of the company. One of the most significant challenges to becoming a catalyst is often getting other executives to agree that this is a role finance should be playing. It's not something you can simply ask for, but rather something you grow into as other leaders recognize the value of finance's contribution and increasingly turn to you for assistance and support with execution.

Lessons learned from CFOs who have demonstrated that they know how to be an effective catalyst indicate they have the ability to:

* Build a framework for disciplined execution. Understand what it takes to get things done within the company and apply that knowledge consistently to drive execution.

* Promote financial literacy and value discipline. Embed financial thinking and rigor throughout the company.

* Export finance's talent. Hire qualified people and help them grow, and then let some of them transfer within the company. This might seem counter-intuitive given the current labor crunch. But, seeding the rest of the company with talent you've developed can expand your influence and make it that much easier to do your job and be a catalyst.

* Lead by example. Drive accountability through personal leadership, measurement and commitment.

Alfred H. Drewes, the CFO and senior vice president for Pepsi Bottling Group, says one of the things that "we talk a lot about here is creating financial literacy in the company." Indeed, he continues, "that sounds like a lofty term, but what it really means is making sure that when the sales guy goes into a store, he has the tools to understand what the right price points are, what the right package mix is."

Setting Priorities

In a recent Deloitte webcast, more than 700 finance and business executives were asked to identify the role that offered the greatest benefits for their company. Nearly half chose "strategist" as the role with the most potential. Nearly a quarter selected "catalyst," and "operator" and "steward" were a distant third and fourth, respectively.

Participants were then asked which role would actually receive the most focus over the next 12 months. And though the rankings were the same, the percentages were markedly different. The number of participants that chose "steward" more than doubled from 6.7 percent to 16.1 percent, while "operator" rose from 12.9 percent to 16.9 percent. At the same time, "strategist" and "catalyst" dropped significantly.

These results suggest that while CFOs and other executives have started to recognize the value of finance's more advanced roles, they haven't forgotten about the basics.

It's clear that CFOs who excel at strategy are the ones most likely to reach the top of their profession. But before you can play that strategist role, you must master the roles of steward and operator. CFOs who get the order wrong are likely to find themselves moving out rather than up. And, the most effective way for a CFO to create value for the company is to act as a catalyst for improving execution and performance.

CFOs who want to get ahead can't afford to ignore any of the four roles. That doesn't necessarily mean saying "yes" to everything. As CFOs are being saddled with all kinds of administrative trivia--from human resources to real estate to information technology and more--some CFOs view these expanded responsibilities as a stepping-stone to the top.

Most often, however, the new work is just a distraction--pulling you away from your critical finance responsibilities without adding to your knowledge of the company's core business. In order to protect your job--and your sanity--it behooves you as a CFO to focus on the things that really matter and trust others to do the rest.

STEVEN EHRENHALT ([e-mail]) is a Principal in the Finance Consulting Practice and DEIRDRE RYAN ([e-mail]) is a Senior Manager, both with Deloitte Consulting LLP.

RELATED ARTICLE: TAKEAWAYS

** The CFO job is comprised of four roles, each with its own unique responsibilities and demands: steward, operator, strategist and catalyst.

** The four roles are hierarchical, and individuals must become proficient in one before moving on to the next.

** When respondents to a Deloitte survey were asked to identify the role that offered the greatest benefits to their companies, nearly half chose strategist, and one-quarter selected catalyst; operator and steward were a distant third and fourth, respectively.