Seven hats and four faces
Seven Hats
The ICAEW describes today’s Chief Financial Officer as having seven hats to wear.
Storyteller
Creator of a clear narrative for internal and external audiences.
Storytelling is a crucial skill for all high-performing CFOs. To flourish, the CFO must be a compelling and credible communicator, able to articulate a powerful narrative to business leaders and investors. The CFO needs to be able to explain an organisation’s strategy for growth and compellingly present quality financial data to a wide audience of stakeholders.
Co-Pilot
Maverick and Goose.
Partner to the CEO, providing a complementary skill set to support the leadership of the company.
Establishing a strong rapport with the CEO is vital for a CFO. It is important to have a relationship where your input is sought and valued. Ultimately the CEO may make the final decision, but the CFO should position themself so their voice is considered before any judgement is reached.
Magistrate
Arbiter of the law, ensuring compliance with controls, compliance, and statutory obligations.
The CFO should also adjudicate key decision-making. A good magistrate examines the evidence, evaluates it in context, and makes judgments that all can respect. The CFO should be independent and fair but with the influence to change a decision if it’s wrong, yet be humble enough to accept others challenging their view.
Consigliere
Before your mind conjures up images of Al Capone or Vito Corleone, this infers that the CFO is a trusted confidant and advisor to the Board/Senior Management.
Today’s CFO must act as a sounding board, influencing the company’s journey. The CFO is expected to navigate PEST factors (political, economic, social, and technological), utilising data to simultaneously inform the business about historic performance and persuading future direction.
Engineer
Architect of business models, processes, and systems, to yield operational efficiencies.
The CFO should understand in granular detail how the business functions. An end-to-end understanding of the value chain, and how systems and processes mesh together to deliver value will maximise the impact of the finance business partner relationship.
Muse
Source of inspiration, providing insightful guidance, driving initiatives, and innovation.
Whilst “creative” and “accounting” in the same sentence might hint at questionable ethics, the CFO must encourage their finance team to embrace the innovative thought process. With access to a rich source of data analytics, finance should identify opportunities to drive strategy.
Rescue
A problem solver. The corporate firefighter.
The CFO must be brave, and be capable to take control of difficult situations and deliver solutions calmly and decisively. The CFO is responsible to preserve the company’s assets, prevent things from going wrong, but turnaround the situation if they do. Painful decisions are a reality of the job but the CFO should be pragmatic in finding solutions.
As with fashion, which hat to wear depends on the occasion. The circumstances of the business will determine which hat the CFO should don most frequently, but in reality, the guises will interchange. The CFO should be agile, flexible to adapt their skills and knowledge, applying an analytical mind, and decisiveness to any situation – and able to wear as many hats as necessary.
Four Faces
Deloitte has suggested a “Four Faces Framework” to describe the diverse challenges facing the role of the CFO.
Operator
The Operator balances cost and service levels in delivering a robust and efficient finance operation, providing quality support to the business through management information, financial planning and analysis, funding, tax planning, etc.
Steward
The Steward works to protect the vital assets of the company, ensure compliance with internal controls and financial regulations, close the books and statutory filings correctly, and communicate value and risk issues to investors and boards.
Strategist
The Strategist provides a financial perspective on innovation and profitable growth, to define the future of the company. CFOs are in the driving seat for strategic planning, and provide vital financial leadership, aligning business and finance strategy to grow the business. Through capital market financing strategies and M&A, they can play an integral role in supporting other long-term investments of the company.
Catalyst
The Catalyst acts as a change agent to drive business enhancement. With control of spending, the Catalyst can selectively drive business improvement initiatives and should stimulate a value attitude throughout the organisation. As a business partner, the CFO establishes accountability for results, drives execution with business management decision-makers.
