The bottom line on CFOs.Financial Executive followed up the survey by interviewing Patrick S. Pittard, president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Heidrick & Struggles, about the results.
Financial Executive: Did the survey results surprise you? For instance, would you have predicted that 97 percent of CFOs are involved in strategic planning Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people. while only 9 percent are involved in audits?
Pittard: The results support the evolution we've we've
Contraction of we have.
we've have noticed among CFOs in the last decade. We've seen CFOs take on more active roles as strategic partners, and the survey data quantify Quantify - A performance analysis tool from Pure Software. this. As the CFO See Chief Financial Officer. spends more time contributing to the organizational mission, the responsibilities of audits and other more quantitative responsibilities have been effectively handled by other high-ranking financial experts.
Financial Executive: Why do you think few play a role in sales and marketing?
Pittard: Because CFOs develop long-term Long-term
Three or more years. In the context of accounting, more than 1 year.
1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. strategic planning and resolve business decisions, they still may impact the way the organization sells or markets its products. John Cusick The name Cusick may refer to: People
Financial Executive: If almost three-fourths of CEOs hand.pick their CFO, why do only one-third see their CFO as a possible successor?
Pittard: Almost two.thirds, 65 percent, of the CFOs the survey discusses have been in their position five or fewer years. Perhaps with time and experience, they'd be considered as successors to the CEO. Five years from now, the numbers may be significantly different. The closer a CEO and CFO work together as strategic partners, the greater the likelihood of that CFO being both prepared for and selected for the position of CEO. There are many examples of CFOs becoming CEOs within the same company: Douglas Ivester Douglas Ivester (1947-) was appointed as Chief Executive Officer of Coca-Cola Company after the death of Mr. Roberto Goizueta. He retired in February 17, 2000.
Malcom Douglas Ivester was born in New Holland, Georgia. , CEO of the Coca-Cola Company, James Unruh, former CEO of Unisys, and Ron Skates Skates may refer to:
Key responsibilities of CFO Budget and planning (financial) 63% Business development (non-financial) 60% P&L responsibilities (non-financial) 53% Mergers and acquisitions (financial) 49% MIS (non-financial) 49%
Financial Executive: Why do you think CEOs select budget and planning as the CFO's chief financial responsibility? It seems to push CFOs back to "number-cruncher" status.
Pittard: While it may lack some of the glamour of the CFO's other responsibilities, budget and planning is one of the most important financial aspects of any business. Therefore it should be done by the most qualified and talented financial officer. While the CFO has taken on a more strategic role and contributes to the organization in many broad ways, he or she is still the best qualified to handle budget and planning. It's all about building the most effective team possible and creating an environment in which each player can contribute the most. Just as you wouldn't send your quarterback out on defense, you wouldn't ask your CIO CIO: see American Federation of Labor and Congress of Industrial Organizations.
(Chief Information Officer) The executive officer in charge of information processing in an organization. to manage budget and planning. You'd have your CIO manage information systems while the CFO manages quantitative functions.
We asked CEOs to evaluate both the financial and non-financial responsibilities of their CFOs. CEOs rank budget and planning as the most important financial responsibility (63 percent), but CEOs also rank business development as the most important non-financial responsibility (60 percent). Of the top five responsibilities, three are non-financial - corroborating that the CFO is both strategic partner and financial expert.
Financial Executive: CEO prefer that CFOs also have non-financial business experience, saying, according to according to
1. As stated or indicated by; on the authority of: according to historians.
2. In keeping with: according to instructions.
3. the survey results, they may be involved in difficult business decisions unrelated to finance. What should this experience consist of? How does one acquire it?
Pittard: Each CFO has a unique mix of skills, but those who also make strong non-financial contributions are more valuable to the team. CEOs report the most desirable abilities in a CFO are analytical analytical, analytic
pertaining to or emanating from analysis.
control of confounding by analysis of the results of a trial or test. thinking, strategic planning and leadership. Interestingly, almost three-quarters of all CFOs included in the survey have graduate degrees, so the graduate classroom obviously provides a strong training ground in those key areas. It's vital, however, to combine formal training with hands-on experience in a variety of business situations and professional positions.
CEOs say the most valuable non-finance area in which CFOs have experience is in general management-which requires a strong ability to analyze situations, identify and plan solutions and then lead the organization to implement them. To prepare themselves to step into the CFO position, aspiring as·pire
intr.v. as·pired, as·pir·ing, as·pires
1. To have a great ambition or ultimate goal; desire strongly: aspired to stardom.
2. CFOs may want to maintain strong financial skills while also taking on general management responsibilities. CEOs identify narrow business experience as the number one weakness of CFOs. An effective CFO will need to remain open-minded about a variety of responsibilities, titles and industries. Ideal CFOs will broaden their vision of the paths that will lead them to the CEO's position.
Financial Executive: CEOs also note that they want to be challenged appropriately by their CFOs. What's appropriate?
Pittard: CEOs strongly benefit from CFOs who encourage them to think at the next level. Because the CFO has both a broad strategic vision and a very detailed understanding of the organization's financial possibilities and limitations, the CFO can either help expand or focus the CEO's vision.
Any executive should be most receptive receptive /re·cep·tive/ (re-cep´tiv) capable of receiving or of responding to a stimulus. to challenge behind closed doors or in strategic planning sessions. An inappropriate challenge would be one that occurs in public or that questions the authority of the CEO. Inappropriate or ill-timed challenges can damage the organization's unity and cast doubt on the organization's leaders. As high-level executives, CFOs have had plenty of practice challenging colleagues in appropriate ways, and have developed strong interpersonal skills "Interpersonal skills" refers to mental and communicative algorithms applied during social communications and interactions in order to reach certain effects or results. The term "interpersonal skills" is used often in business contexts to refer to the measure of a person's ability .
Financial Executive: How would you summarize sum·ma·rize
intr. & tr.v. sum·ma·rized, sum·ma·riz·ing, sum·ma·riz·es
To make a summary or make a summary of.
sum the survey results?
Pittard: CFOs today play a far more strategic role, and they contribute equally to both financial and nonfinancial areas of the organization. Because of their evolving role, CFOs need a broader range of skills and abilities than ever before-especially analytical thinking, strategic planning and leadership skills.
Financial Executive: What should a CFO or an aspiring CFO take away from these results?
Pittard: These survey results have two important messages for CFOs and aspiring CFOs. First, as a CFO you have a greater opportunity than ever before to contribute to your organization and shape its future. CFOs play much more integral and impactful roles in the organization today because their CEOs view them as strategic partners. Second, you need a far broader range of skills and abilities to succeed in the CFO position today. Quantitative skills are still important, but they're not enough. You need the ability to think analytically an·a·lyt·ic or an·a·lyt·i·cal
1. Of or relating to analysis or analytics.
2. Dividing into elemental parts or basic principles.
3. , plan strategically and lead. If you're a CFO or an aspiring CFO, prepare yourself to contribute on this level. Both you and your organization will benefit dramatically.
Financial Executive: When your firm is matching a CFO to a CEO, what's your approach?
Pittard: In every search, we work closely with our clients to understand their organizational style, culture, personality and dynamics. We also assess their needs in order to determine the ideal skills and experience a candidate should possess. Then we can search for a candidate who will perform well in that specific environment. Throughout the entire search we involve the client, especially the executive team that will be working with the new CFO.
Financial Executive: How large is your CFO practice?
Pittard: We conduct 200 CFO searches annually.
Financial Executive: Have you seen the relationship between the CEO and CFO change over the last five years?
Pittard: The relationship between the CEO and CFO has evolved into a partnership. The survey shows 72 percent of CEOs chose rather than inherited inherited
received by inheritance.
inherited achondroplastic dwarfism
see achondroplastic dwarfism.
inherited combined immunodeficiency
see combined immune deficiency syndrome (disease). their CFO, which illustrates that CEOs are getting involved with their CFO right from the beginning. We've seen this in our clients' CFO searches, and we've also seen that CEOs work much more effectively with CFOs they have chosen themselves.
When George Fisher George Fisher may refer to:
Financial Executive: Profile your own CFO in 10 words or less.
Pittard: A strategic partner who makes us stronger, wiser, more profitable.
Financial Executive: The CEOs who don't consider their CFO a strategic business partner say it's because he or she isn't strategic enough. Yet they say analytical thinking and strategic planning are among the most important qualities a CFO can have. So, in those cases, should the CEO groom the CFO to become a more strategic thinker?
Pittard: Ninety-one percent of CEOs consider their CFO as a strategic partner. That's impressive, especially considering only 72 percent of CEOs chose their CFO. But the CEO needs a strategic partner - not a protege pro·té·gé
One whose welfare, training, or career is promoted by an influential person.
[French, from past participle of protéger, to protect, from Old French, from Latin . It shouldn't be the CEO's responsibility to groom the CFO. However, it is the CEO's responsibility to clarify what he or she needs from a CFO, and it's the CFO's responsibility to build those skills. If the CFO can't act as strategic partner, he or she impairs the organization's ability to succeed and potentially compromises the organization's future.