By Gino Blefari
This week my travels first found me in Minneapolis for the Annual HomeServices of America, Inc. CEO Conference and tomorrow, I travel to sunny Miami. Finally, I’ll land in beautiful Anguilla for the 2019 Berkshire Elite Circle Conference.
Caribbean paradise aside, let’s return to Minneapolis—ranked, by the way, as one of the sixth Best Places to Live in America by the Travel Channel—and to this year’s CEO Conference. For the 2019 meeting, we invited not only the CEOs from our HomeServices of America companies but also the CFOs.
Historically, the CEO-CFO relationship wasn’t as tight-knit as it is today, and in a mostly analog world, this divide worked with few problems. Decades ago, the CFO was the person at the helm of the finance function of a company, a man or woman of spreadsheets and economic models who crunched numbers while the CEO exercised well-honed business savvy to steer a company in the direction of increased growth.
Today, however, this separation has been completely obliterated; the relationship between the CEO and CFO is now one marked by collaboration, strategic advisement and partnership. Chief Financial Officers are called upon by their Chief Executive Officers to help with the organization’s planning and oversight, sometimes stepping far beyond the boundaries of traditional financial projects because their expertise is a necessary, valuable component to accomplish a company’s Wildly Important Goals. Why is sending your CFO a proverbial meeting invite to all aspects of your business important? First, because he or she knows your business inside and out, from balance sheet to bottom line, and second, because your CFO can provide you something all leaders need when running a business: healthy dissent.
“Sharing dissenting opinions is often a sign of a strong, strategic relationship,” says Amy Hayes, an industrial psychologist and Russell Reynolds Leadership Expert. “By creating the space for healthy debate, the CEO is signaling directly and indirectly that the CFO is an ingrained, enterprise-level member of the leadership team.”
Writing for Deloitte, Charles Holley, retired CFO of Walmart, explains: “I believe CFOs are best positioned to be the CEO’s right hand, the person the CEO can trust to have informed opinions on company issues and candidly discuss the business.”
Holley also identifies three characteristics shared by high-performing and highly effective CFOs:
- A skillful influencer. Sometimes, a CFO plays the role of the sturdy voice of reason, nixing expensive projects to err on the side of financial conservation. Other times, the CFO plays the role of convincer, tasked with explaining to other members of the leadership team why an initiative should be adopted. Armed with the financial understanding of exactly what a project entails, he or she can be an important second line of defense when convincing leadership members to undertake a given initiative or change an existing process.
- A powerful communicator. CFOs are many times asked to explain complex financial models in a way that’s simple, straightforward and easy to understand. A CFO who is an adept storyteller can not only explain and inform but can also educate. Bestselling author Carmine Gallo once said stories are the currency by which ideas are exchanged and if you have a CFO who can tell good ones, the rapid movement of ideas will naturally flow.
- A relentless agent for change. Remember our post about how big companies must think small? (If not, read it here.) CFOS and CEOs must collaborate to transform the collective mindset of a change-averse organization in order to increase the company’s nimbleness, which in turn positively affects productivity, creativity and sustainable growth. A business can’t grow by doing the same things it did yesterday as it’ll do tomorrow and the day after that. CFOs understand what needs to change and can be fervent proponents for these transformations, while CEOs can articulate the why.
So, what’s the message? One way to grow as a leader—and a business—is to look internally and make positive changes for yourself, (Warren Buffett famously said, “By far the best investment you can make is in yourself.”) The other way to grow is to assess the strength of the leaders around you, and from this strength, build on your own. The next time you have an important, strategic decision to make, don’t go at it alone. Look to your CFO, a leader with specialized knowledge who can provide ideas and insight. Remember one of the words in our value proposition: trust. As leaders, trusting in our team—and specifically, in our CFO—isn’t just good practice; it’s the only way to succeed.