Despite — or maybe because of — the challenges facing companies today, there’s never been a better time for CFOs to help shape their companies’ futures. For ambitious finance professionals, inflation, global unrest and a talent shortage represent a tremendous opportunity to lead.
As the CFO job becomes more challenging, firsthand insights and advice from those who have held the title for years are invaluable. We recently sat down with three finance chiefs in three distinct industries to get their perspective on what it takes to succeed today. Their suggestions apply to those who already lead finance teams and to those who aspire to reach that top spot.
Our panel included Drew Cook, CFO and head of operations at apparel brand Pact; Cari Thomas, CFO for healthcare services and technology firm Quatris Healthco; and Chantal Schutz, CFO and EVP at technology provider mCloud. With an average tenure in their roles of more than nine years, these professionals have lived through a lot of transformation. Despite their varied backgrounds and experiences, Cook, Schutz and Thomas landed on many of the same themes and raised similar points.
Drew Cook has been the CFO of direct-to-consumer clothing retailer Pact since late 2014. He also oversees the company’s operations, customer service and wholesale business. Before joining Revelry Brands, one of the private equity groups that backs Pact, Cook was an investment banker.
Chantal Schutz is a Canadian CPA who has spent almost three years at mCloud, which offers advanced technology to help companies monitor and improve the performance of assets like wind turbines and HVAC systems. She previously worked as a fractional CFO and held the top finance role for three other companies.
Cari Thomas has the title of CFO, but her responsibilities go well beyond finance as she oversees HR and internal IT at Quatris Healthco, a company that provides software, services and support to medical practices. Before joining Quatris in 2014, she served as CFO for Jibe Consulting.
Emblematic of the CFO role, the suggestions below require a combination of hard and soft skills. You may have mastered some of them, while others are more of a work-in-progress, but improvement in any of these areas should be seen as a win.
Our recent NetSuite CFO & Business Leader Spring 2022 Outlook Survey shows the finance department has grown in importance since the start of the pandemic. Finance professionals are adept at generating and interpreting numbers and reports that offer clarity to business decisions. While that seems like a riff on the age-old negative perception of accounting and finance folks as “bean counters,” numbers-backed insights are a big piece of what has made CFOs more influential in their organizations. They have access to and can interpret data and reports with an ease and confidence few peers can match.
The key is to apply those abilities to other aspects of the business — and there is ample opportunity to do so.
“Your job now as a CFO is to look across the entire organization and be focused on the things where you can add the most value with your financial skill set,” Thomas said.
An analytical, data-driven perspective is invaluable in conversations about, for example, marketing or product development. Finance leaders are usually best suited to apply a fiscal lens to decisions, Cook said, and should also be internal advocates for a data-driven approach, encouraging others to incorporate numbers into their decision-making.
There’s room for improvement here: In the NetSuite survey, only 27% of respondent companies classify themselves as “data-driven” compared with 23% saying they’re “intuition first” decision-makers.
Our CFOs are not only comfortable letting other employees take the lead in areas where they have greater expertise, they actively encourage it.
“I think you have to have a ton of self-awareness in any leadership position,” Cook said. “You need to know what you know and what you don’t and be prepared to take a step back if it’s not something you’re great at.” Cook leans on others when it comes to aspects of Pact he knows are not a personal strength, like branding.
Finance heads should actively seek ideas from employees at all levels and then act on them to show it’s not an empty exercise.
In other words, be a good, active listener. Employees who feel like they’re heard will be more engaged and do better work.
“I listen a lot,” Thomas said. “Really listening and making sure that what I think we should be doing is really the right thing for the teams that we have in place.”
All our panelists credited mentors and professional groups for helping them succeed as CFOs and advise those earlier in their careers to start identifying people in their networks with a diverse range of backgrounds who can serve as sounding boards.
Sources of mentorships are all around you. Cook and Schutz both use their boards of directors as a key resource — members often have deep industry experience and are or were in senior management roles. Former or current CFOs can be particularly valuable too since they’re intimately familiar with the challenges and decisions you’re facing. Line-of-business leads will have greater background knowledge in their areas and may come at issues from a different angle.
Finally, don’t be afraid to network outside the finance box. Schutz credits networking events that had “nothing to do with accounting” for helping her understand other industries and giving her a fresh perspective on business.
The three CFOs we spoke to are with rapidly growing companies, which means they almost always have open positions to fill. Hiring is also a fundamental challenge for all of them — not only because of the ultra-competitive labor market, but because they need candidates with specific skill sets who will also fit into their well-defined cultures.
For example, mCloud seeks finance professionals who understand what it takes to excel on a small, fast-moving team. They must possess the entrepreneurial mindset to work with less direction and handle a broader range of tasks. Similarly, Pact runs lean and looks for people eager to grow beyond the initial title and job description.
“I don’t care what industry you’re in, if you tell me that talent isn’t one of your top priorities and one of your top challenges, I’m going to tell you you’re not insisting you have ‘A’ players on your bench at all times,” Schutz said.
Cook, Schutz and Thomas all see a strong link between hiring and company performance and therefore think it’s critical that they’re involved in selecting new employees.
One note: In our Outlook Survey, managers in and out of the finance department didn’t always give their CFOs top marks for managing the finance team. So as you look outward to help other departments get the skills they need, make sure you’re minding your own team’s morale and development.
Everyone has heard about the emergence of “strategic CFOs.” But what does that mean now, in practice? What have progressive CFOs done to become strategic business partners who are involved in major decisions?
A big piece of it is stretching beyond traditional financial responsibilities, like closing the books and managing controls. That requires having a great team that keeps the finances in order, to free time for collaborating with other departments so you can understand the business at a deeper level and from other points of view.
With that information in hand, finance chiefs can more meaningfully contribute to conversations with fellow executives. They can be more involved in establishing and supporting the overarching initiatives and goals that allow the business to take the next step. Being accessible to not only the finance team but other units — sales, operations, HR — can help you gain the expansive knowledge required to be that strategic partner.
“Finance leaders need to step in and put on their business-minded hats and get out from behind their desks and walk around and understand and know the people,” Schutz said.
The concept of “management by walking around” isn’t new, but it needs to be redefined for a reality where many companies are in a hybrid work model.
Automation is the CFO’s friend. Anyone who works in finance should constantly be looking for technology that can free up time to spend on tasks that require their knowledge and analytical expertise. Consider that much of the work involved in reporting and AP and AR processing, for example, can be done without human intervention.
“I think there's going to be a continued focus on ensuring that you're really using technology as an asset in your business and developing the automation for routine business practices and the reporting that's needed,” Thomas said. “So then people can focus on executing on the vision, the strategy, the mission of the organization and not sorting data.”
Technology can also help CFOs deal with what Cook says will soon become a volume of data that’s unmanageable without robust systems that can highlight the most important information. With that in mind, Thomas adds that finance chiefs should be involved in creating a technology roadmap of what tools the business should plan to invest in and when.
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It’s easy to set sweeping goals that sound impressive but, when you crunch the numbers, aren’t realistic or don’t provide a clear benefit to the business. Pact, for instance, strives to provide organic, sustainably made clothing to its customers. But that doesn’t mean it can always afford the most sustainable option for every aspect of its operations. The retailer does, however, continually make incremental steps to reduce its environmental footprint. For example, it recently was able to move away from using plastic polybags; in the past, alternative options were too expensive and didn’t hold up well.
Flexibility is also important: mCloud’s software can help companies monitor and reduce their emissions, critical when preparing for environmental, social and governance (ESG) reporting requirements. But there is not yet a generally accepted framework or rules around ESG reporting, which means CFOs can take it in a lot of different directions.
Rather than trying to boil the ocean, Schutz recommends focusing on a few key ESG objectives that could have a direct, positive impact on the business.
“I think that it is very, very important that companies from the beginning get clear on a very short list of things around ESG that they are going to commit to focusing on,” she said. “There is no benefit or value in creating big sweeping statements or taking on way more than you know you’re going to be able to handle.”
Good leaders understand that subordinates eager to add new skills do not pose a threat. In fact, they realize that when colleagues deepen or broaden their skill sets, everyone benefits, and they actively support those efforts.
Quatris, for example, is currently shifting from a one-time license to a subscription model for its healthcare software offerings and has launched cross-company training programs to help employees adapt, an investment that can quickly pay for itself. Some employees are being reassigned based on their interests and goals.
Top CFOs also welcome the central role they play in developing future business leaders.
“Make sure you’re investing your time and energy into that next crowd of people coming behind us, because I see that there are some really big gaps and some really big shoes to fill,” Schutz said. “I’m not sure that we as CFOs are necessarily doing that really well.”
Executives may feel like they should know everything, especially if they recently reached the top office. Not so, and in fact colleagues respect those who are honest about their limitations.
“Don’t be afraid to say, ‘I don’t know,’ don’t be afraid to ask for help,” Schutz said. “Hands down, I’ve done that consistently over my career.”
That humility sends a strong message to the staff and encourages them to ask for help rather than just making their best guess and pushing forward. Executives set the tone for a culture where employees feel comfortable sharing their opinions on matters big or small.
“If you’re speaking up and you’re open and you’re modeling that in your day-to-day behaviors, then people come to learn that it’s safe to also do that,” Schutz said.
Taking a company public is something many CFOs aspire to accomplish over the course of their careers. Of the three companies we spoke to, only mCloud is public, having been traded on Canada’s Toronto Venture Exchange (TSX-V) since 2017 and listing on the Nasdaq late last year.
Its U.S. IPO came with a “significant learning curve,” Schutz said, and required constant communication and coordination with the Securities and Exchange Commission (SEC), attorneys and other stakeholders.
She recommends other companies hoping to go public first get a handle on their data. They need to understand what’s needed, then shore up areas where they fall short.
“Go read a bunch of other companies’ prospectuses so you know what’s going to be required of you and start creating your own file of data that you see in other company’s go-public filing statements,” she said. “You may go, ‘Oh I don’t have that’ or ‘We don’t keep record of that as frequently as I might need to.’”
Schutz also recommends CFOs connect with other financial leaders who have been through this journey before to gain insights and get questions answered. Again, mentors are important.
The same advice holds for CFOs working on mergers and acquisitions. Thomas focused on ensuring a good cultural and technology fit when Quatris Healthco was formed in 2018. She assembled a committee of about 10 individuals from across the company who get together on a regular basis and really think about what they can do to build a meaningful, engaging culture.
A few key themes emerge from this list: utilizing your expertise, showing humility, learning from others and investing in employees. That’s why, although these tips are for CFOs, they could apply to all business leaders.
In that CFO & Business Leader Outlook Survey, the importance of CFOs and their teams has risen in tandem with some non-traditional functions of the finance chief. For example, communication and coaching skills are more valued now as the finance team becomes central to managing uncertainty and risk in a uniquely uncertain time.