It’s wrong to generalise. And stereotypes are very much out of fashion these days. So forgive me if I generalise for a moment about a stereotype! The FD.
What’s the traditional FD like?
The traditional FD is an accountant who focuses on the historical performance of the company (defined in numbers: turnover, P&L, variances, KPIs), tax liabilities and compliance requirements, and cost efficiencies.
They’re intelligent, numerate, meticulous, with an eye for detail, but also err on the introspective side and can be positively shy and retiring when it comes to speaking and presenting.
And what are the new challenges for the FD?
The New FD, whilst retaining these traditional areas, now has a growing list of new, less familiar, responsibilities. The drive towards cost efficiencies is now pretty much there in many organisations, so there is now capacity to focus on new areas of focus, namely revenue and value creation.
This is being accomplished through the ongoing digitalisation of the business, business transformation and building talent and teams which cross functions. This new focus is reframing finance as a key driver of business development, and putting finance at a central place in articulating and enabling how it creates and preserves value.
This transformation from a finance function which generates historical reports to one which is all about strategic development, relationship building and developing and deploying solutions is neatly summed up in CGMA’s reports of the changing role and mandate of finance as:
“Information to Impact”
The traditional finance building blocks of the finance function of “Information” and “Insight” are being extended to include ”Influence” and “Impact’.
How is the New FD perceived?
The New FD may have a new focus but, as the saying goes, a leopard doesn’t change his spots.
In the words of McKinsey in the New CFO Mandate, “changing responsibilities, unchanged perceptions.” In fact, McKinsey’s survey states that 47% of executives outside of the finance function think that the New FD contributes most to the traditional roles of accounting, controlling and analysis.
In fact, the new CFO is pivotal in the future success of the organisation. And key to that success is the ability to communicate: getting buy in to change, motivating cross functional teams to embrace this transformation, becoming a role model for new mindsets and behaviours, and coaching and mentoring team members to do the same.
So what are the key soft skill changes the New FD needs to make?
Firstly, the New FD needs to develop higher communication skills in order to initiate, drive and maintain company-wide transformation. Most FDs have not played an integral part in doing this historically and haven’t developed these broader skills.
Secondly, a rebranding exercise is required to change people’s perception of the New FD as having a lead role in change management whilst still maintaining their credibility and integrity.
Excellent communications skills and brand management have traditionally not been high on the FD’s list of strengths. After all, all they had to talk about was past performance communicated largely by numbers. Typically it was the CEOs, marketing and sales directors that were the engaging ones, the so-called ‘best speakers’ and perceived as the ‘most dynamic’ directors.
This is not a comfortable transition and what is certain is that the New FD needs to invest time in self-development and upskilling.
The leopard CAN change its spots.
We developed a program to support the New FD through this transition by focusing on helping senior finance executives to develop presence and optimise their communication skills to increase their impact. Areas covered include how to project a positive ethos, command attention, give purpose and direction and engage, listen and persuade.
With focus and by making small, incremental changes, executives can improve their personal impact and confidence, strengthen their image and style and increase their visibility. They can also be more effective communicators and maximise their value to their company AND the company’s value.
So perhaps we should say, the New FD needs to work out HOW – not IF – the leopard can change its spots.