Prepare to migrate risk

New CFOs must understand the contextual factors that can impact their performance and proactively plan to address them or account for them.

Preparing for your new challenge includes:

• Mitigating team change resistance
• Reducing team disruption
• Encouraging team alignment

 

Managing team change resistance

The greater the level of change required by the new CFO or finance leader, the higher the probability that finance team performance targets will be missed. However, not everything related to change is negative: If the incoming CFO joins a team that is comfortable with risk and open to change, the chances that the new leader will succeed increase. In fact, the higher the team’s risk tolerance or openness to change, the larger the positive impact on new leaders’ performance.

The right way to accomplish this is through an “transparent change” approach. This harnesses the power of the broader finance team to collaborate, create and implement change — ultimately driving employee excitement and buy-in. This means involving employees in the change strategy process so they can feel part of the change and understand what this means not just for them but for the business.

Minimising team change

CFOs must help their teams navigate change uncertainty, which negatively affects engagement and productivity. The best way to do this is by making their teams feel empowered by providing support and listening to feedback. Foster an environment of change and development so employees feel confident about sharing new ideas and strategies for better business planning.

Encouraging team alignment

The finance industry relies heavily on collaboration and coordination with others. To succeed, new leaders must consider the relationship between their teams and other stakeholders, and understand the trade-off between agility and alignment.This needs to be a priority for any new leader or CFO when starting their new position.

Agile teams are capable of quickly understanding new business contexts and transforming how finance works to provide maximum value. While CFOs can make a number of changes to improve their function’s agility, these are the most common and successful approaches:

• Control transactional, day-to-day activities and processes

• Break down silos by integrating finance teams

• Rethink talent strategy to continuously adapt to changing internal and external environments

• Boost analytics capabilities and responses to new requests

• Improve processes to more flexible

• Nurture and build relationships

 

Build trust

Develop trusted stakeholder relationships

Building relationships, trust, and credibility are key to a successful CFO transition. It is important to do this with your peers, C-suite members and the board.

Connecting during your new appointment includes:

• Relationships with stakeholders
• Building trust in your team
• Establishing your personal brand

 

Building stakeholder trust 

New executives’ success is more dependent on their colleagues as the work becomes increasingly complex and collaborative. Relationships with the CEO, board and other executives are essential to influence employees who do not report directly to the executive.

Relationship building is not an instinctive process for incoming CFOs. They need to be intentional. New CFOs and finance leaders should focus on creating an internal network within their team to gain a positive impact on their performance:

• Prioritise stakeholder relations
• Credibility is the foundation of all relationships
• Clarify expectations and boundaries

 

Building Team Trust

The team that new CFOs manage is a key component to their success. CFO’s Direct reports can provide them with valuable information on the inner workings and finances. They can also act as a sounding-board and help them to understand the strengths, weaknesses and opportunities in finance.

The team must be comfortable with providing feedback and information to the new CFOs. To build trust in a team, CFOs should follow these principles:

• Find out about employees motivations and challenges and their opinions about the team
• Advise of your expectations and the value they should bring
• Include the team when appropriate in key decisions, assessments and goal-setting
• Encourage a team-oriented environment

 

Establishing your own personal brand

Your personal brand is what people know you for, and what they think of you. What kind of CFO do you consider yourself to be? What type of CFO are you? The CFO who is disruptive? The growth-guru? Brands communicate your purpose, establish credibility and create hype – allowing you to connect with stakeholders within the new company.  

Think of some prompts about who you would like to be as a successful CFO; How would you describe your current reputation in terms of leadership, execution, vision, and innovation? 

Assess the current finance function

Establish clear initial priorities by reviewing performance data, benchmarks, and feedback surveys to understand and analyse the key issues. Avoid analysis paralysis. Gain insight, and refine over time.

We suggest the following insights and data analysis:

• Assess your finance performance

• Analyse your talent pool

• Assessing organisation structure

Assessing finance performance

A lack of understanding of finance’s effectiveness leaves finance leaders with unfocused investments, unsupported initiatives, and the wrong priorities. To avoid this, new CFOs should evaluate their organisation to identify opportunities to improve performance and efficiency in these four categories:

1. Performance: Understand how major facets of the finance function are performing.

2. Costs: Analyse personnel, technology, overheads and any other costs necessary to the operation of the finance function.

3. Process: Determine how advanced the finance function’s capabilities are relative to other organisations. With finite resources, CFOs have to prioritise the capabilities that matter most.

4. Alignment: Understand which activities matter most to internal stakeholders and stakeholders’ perception of the value of finance’s support for those activities.

Assessing your talent pool