Charting Your Path: Essential Steps to Becoming a CFO

Further Your Education

To become a CFO, the first step is to further your education. It's important to have a strong understanding of accounting principles and financial analysis techniques. Most CFOs have at least a bachelor's degree in finance or accounting, and many go on to earn an MBA or other relevant master's degree. Education is the foundation upon which you'll build your career.

Master Technical Skills

Next, you need to master the necessary technical skills. This includes not only financial analysis but also understanding complex financial software and systems. Being proficient in these areas will set you apart from others. Remember, technical skills are crucial for making informed decisions and guiding your team effectively.

Enhance Leadership Abilities

Lastly, enhance your leadership abilities. Excellent communication skills are essential for a CFO, as you'll need to convey complex financial information in a way that others can understand. Building relationships and connections is key to success in finance. Strong leadership will help you inspire and manage your team, driving the company towards its goals.

Becoming a CFO is a journey that requires dedication, continuous learning, and the ability to adapt to new challenges. Stay focused and committed, and you'll be well on your way to achieving your career goals.

Building a Vision: Defining Your CFO Role

As we step into the role of CFO, crafting a unique vision is crucial. We need to think about how we can oversee the finance function while also ensuring the organization performs at its best. This means we should be ready to explain how we plan to build on what our predecessors have done and what makes us stand out from other candidates.

To help us in this journey, let’s focus on a few key priorities:

• Formulating a distinctive vision for our role.
• Finding the right sponsors who can support us.
• Strengthening our skills in areas that matter most to the organization.
• Taking professional risks to gain broader experience.
• Engaging with the board to make a real impact.

In our first 90 days, we should organize regular meetings with the CEO to align on their priorities and goals. Coming prepared with specific questions can help clarify their vision and identify how we can contribute effectively.

Building strong relationships from the start is essential for a successful tenure as a CFO. Let’s aim to connect with our team and stakeholders to foster collaboration and trust.

Networking and Mentorship: Finding the Right Sponsors

Importance of Networking

Networking is crucial for career growth. It's not just about meeting people but building meaningful relationships. Often, the best mentors aren’t direct managers but individuals in the organization with whom you can openly discuss your aspirations. Seeking out sponsors outside finance—a business unit leader, for example, or the chief technology officer—can also present opportunities to build experience beyond the function and more deeply understand the organization’s challenges.

Identifying Potential Mentors

Finding the right mentor can be a game-changer. Most of the former CFOs we spoke with found mentors and sponsors essential to their rise. “At every step, there are at least a dozen other folks who are equally competent, and often more competent, than you are, and only one can get the big break,” says Nayar, who had several sponsors before becoming the CFO of Tyco International. To get the right guidance, however, you need to actively seek out individuals who will not only encourage you and highlight your blind spots but whose opinion carries weight in the organization.

Building Strong Relationships

It’s also important to seek the right sponsor for each stage of the journey. Nayar always thought of his career in five- to six-year tranches, at the end of which he set a new ambition. “That helped me figure out who would be the right sponsor to help me get to that level.”

FIND DIVERSE SPONSORS WITH ORGANIZATIONAL CLOUT

Kreidler recommends finding a sponsor in the area that matters most to the company’s performance. At Sysco it was operations, he says, while at PepsiCo, where he spent 11 years in the Yum! Brands group, sponsorship from within the brand organizations (Pizza Hut, Taco Bell, and KFC) was the biggest boon. “Every opportunity you have to work with a more senior person or one who runs a different part of the organization is a job interview,” says Kreidler.

Skill Development: Areas to Focus On

Cross-Functional Knowledge

To succeed as a CFO, it's crucial to have a broad understanding of various departments within the company. This means not just knowing finance but also having insights into operations, marketing, and HR. Expert communication, presentation, and team-building skills are key to all of these expectations. Offer to give presentations to audiences inside and outside your organization, or volunteer for committees where you can fine-tune your leadership skills.

Technology and Cybersecurity

In today's digital age, having a grasp of technology and cybersecurity is non-negotiable. Digital transformation often requires new skills, including data analysis and digital literacy. It's your job to ensure that your finance function has the necessary skills for the digital age. This might mean taking courses or attending workshops to stay updated on the latest trends.

Risk Management

Risk management is another critical area for any CFO. This involves identifying potential risks to the company and developing strategies to mitigate them. Whether it's financial risk, operational risk, or even reputational risk, having a solid risk management plan is essential. Focus on these areas to ensure your efforts are efficient and effective.

70 percent of employee development is driven by experience. So, find ways to get yourself into the room where the conversations are happening to gain the perspective of how decisions are made and how trade-offs are made.

Always be on the lookout for opportunities to improve and enhance your abilities. Consider asking someone whose communication skills you admire to mentor you.

Taking Risks: Broadening Your Experience

Embracing New Challenges

To grow in our careers, we need to embrace risks and dive into new fields or areas. This means taking on projects that push us out of our comfort zones. When we immerse ourselves in situations demanding rapid learning and skill development, we become more adaptable and valuable.

Gaining Diverse Experiences

It's important to gain diverse experiences by working in different departments or roles. For example, if you've always been in finance, try spending some time in operations or customer service. This cross-training helps us understand the business from various angles and develop relationships with people outside our usual circles.

Learning from Failures

Failures are part of the journey. Instead of fearing them, we should see them as learning opportunities. Each setback teaches us something new and helps us grow. Remember, every successful CFO has faced and learned from failures along the way.

70 percent of employee development is driven by experience. So, find ways to get yourself into the room where the conversations are happening to gain the perspective of how decisions are made and how trade-offs are made.

Engaging with the Board: Making an Impact

Understanding Board Dynamics

Before the meeting, it's crucial to introduce yourself personally to each board member and other key executives. Establishing a rapport can greatly influence how your contributions are perceived and help build collaborative relationships. Understanding the issues and preparing insightful questions and comments will demonstrate your readiness and understanding.

Effective Communication with Board Members

When presenting, focus on the key issues and communicate concisely. Avoid unnecessary details or technical jargon. Actively engage during the meeting by listening attentively and responding thoughtfully to questions. Following the meeting, reach out to board members to address any further questions or to provide additional information, reinforcing your commitment to open communication and teamwork.

Presenting Financial Insights

Prepare thoroughly by reviewing the agenda, board materials, and other relevant documents. This preparation will help you present financial insights clearly and effectively. Regularly evaluate the progress towards your vision and be prepared to iterate on your strategies as needed. Continuous improvement based on ongoing feedback and changing conditions will help keep your vision relevant and supported.

Here’s how to ensure you make a strong impression and lay the foundation for effective collaboration.

Staying Updated: Keeping Abreast of Industry Trends

Continuous Learning

We need to stay informed about the latest accounting updates and standards within our industry. This helps us adapt quickly to changes, which is vital for maintaining compliance and operational readiness. Promoting ongoing training and education on the latest accounting practices and technologies fosters a culture of continuous improvement within our finance team.

Attending Industry Events

Attending industry events is a great way to keep up with trends and network with peers. These events offer valuable insights into new practices and technologies that can benefit our organization. Plus, they provide opportunities to discuss challenges and solutions with other professionals.

Reading Relevant Publications

Reading relevant publications keeps us updated on the latest developments in our field. Whether it's industry journals, blogs, or news articles, staying informed helps us make better strategic decisions. Continuous learning through these resources ensures we remain at the forefront of our profession.

Staying updated is not just about knowing the latest trends; it's about understanding how to apply them to drive success.

Conclusion

Building a successful CFO career isn't a walk in the park, but it's definitely doable with the right mindset and actions. Remember to keep learning, stay updated with the latest trends, and never shy away from taking risks. It's all about blending your technical skills with leadership qualities and a deep understanding of your company. By following the tips and insights shared in this article, you're well on your way to making your CFO dreams a reality. Keep pushing forward, and don't forget to enjoy the journey!