IN previous columns, I have spoken about how important it is for financial officers to build all-round business experience to prepare themselves for broader leadership roles. This month I invite Sanjiv Sachar, my colleague in Egon Zehnder’s New Delhi, Mumbai and Bangalore offices, to share the fascinating application of that advice in one of the world’s largest emerging markets – India.
In emerging markets, an estimated 60% of private companies with $1bn (£683m) or more in revenues are family owned, and family businesses are expected to command the lion’s share of new business in these fast-growing regions. India is no exception, and its dynamic business scene is dominated by “promoters” – the local term for founders and majority owners of businesses.
The most successful CFOs of India’s promoter-led companies have gone way beyond traditional financial roles, becoming the founders’ right hand and thought partner on strategy, operations, stakeholder relations, and more. Indeed, in several of India’s largest such companies, CFOs who joined as professional outsiders are now seen by the market as part of the founder’s family – “the other brother”.
Take the example of one of India’s most successful technology companies. When the promoter was building the business, he built a relationship of trust with a chartered accountant in private practice. As the company grew rapidly, the accountant was brought into the business full-time, not just to manage the financials, but also to bring rigour to a whole range of other essential topics – including long-term business strategy, joint venture partnerships, regulatory compliance, talent development, and creating the right cultural ethos.
Today that accountant is the company’s most senior professional, the founder’s closest confidant, and a key board member of several subsidiaries and joint ventures. The secret of his career success is his mindset: he thought and acted like an owner from day one, taking responsibility for issues as big as the company strategy and as small as finding office premises. He would take a hands-on role in resolving operational challenges, and had no hesitation in questioning and challenging the founder’s decisions when he felt the business was heading in the wrong direction.
This experience of this leader, and others like him, holds lessons for any aspiring future CFO in a world in which founder-led and family-owned businesses make up an ever-greater share of the global GDP. Cultivating an ownership mindset is one part of success – which means being ready to look well beyond the finance function, wear multiple hats, and keep a ‘helicopter view’ of the entire business.
Just as important, though, is the need to cultivate emotional intelligence – something that doesn’t receive a lot of focus in accountancy training. These ‘soft skills’ include the ability to read the founder and those around him or her, to build relationships of trust, to provide counsel that achieves the fine balance between listening and outspokenness, and to maintain equilibrium and perspective during the ups and downs of growing a business.
For many financial professionals, this won’t come easily. But it’s worth the stretch. As the CFO-as-brother (or sister) to a successful founder, you can have outsize impact on the world.
Cagla Bekbolet and Sanjiv Sachar are leaders in the global CFO practice of executive search firm Egon Zehnder