‘TRADITIONAL’ CFOs are less likely to see profits at their business in comparison to the most forward-thinking finance chiefs, according to new research.
Some one in ten (9%) CFOs are classed as ‘traditionalist’ in their working behaviours, found the Epicor/Redshift Research paper. They show resistance to change and are strict about processes. ‘Revolutionaries’ represent one-fifth of the 1,500 CFOs surveyed, and are more likely to push for cultural change to improve processes.
Some 72% of the ‘revolutionaries’ experienced profits in the past year, compared to 56% of ‘traditionalists’.
“Contrary to common opinion, today the traditional stereotype of a strict, number-crunching, methodical CFO could be detrimental for profit growth. It is imperative that CFOs embrace change and uncertainty, and ensure that governance and compliance are not restricting their business from being agile and competitive,” the paper stated.
Traditionalists are also less likely to leverage technology to drive change, with fewer believing that systems can help the business achieve more.
Dr Dimitrios Tsivrikos, from UCL, who commented on the research, said of the traditionalist working style: “This desire for control leads to a top-down decision-making process, in which the leaders initiate all decisions before passing them down the hierarchy to be implemented by other employees.
“This has implications for business change and innovation; new ideas that are suggested by employees are not likely to be taken on board in top-down decision-making.”
Revolutionary CFOs were found to be more likely to question systems, or be critical of them in terms of impeding business growth, Dr Tsivrikos added.
A quarter of the respondents (27%) fell into the ‘politician’ category: more cautious leaders with a methodical and team-based approach.
Recent research by recruiters Russell Reynolds found that the role of CFOs is morphing towards being more forward-looking and making better using data to analyse and project. This, in turn, is helping them fit better with the expectations of what is needed from modern CEOs.