The 'Gentle Evolution' in Finance

Boris Groysberg, associate professor at Harvard Business School, collaborated with search firm Heidrick & Struggles to produce the March cover story for Harvard Business Review, "The New Path To the C-Suite." Recently, Groysberg and Jeremy Hanson, who manages the North American Financial Officers Practice for Heidrick& Struggles, spoke with CFOworld.com about the evolution of the CFO career.

What was the most surprising finding in your research?

Boris Groysberg: First, we have evidence that soft skills are so much more important than ever. The other surprise is the interdependence of all the different [C-level] jobs. One example is how important it is for the CFO to understand what's going on in, say, the HR organization. So you basically are looking for managers who have a significant breadth of knowledge.

I think the time when you don't have to be knowledgeable about what your [C-level] colleagues are doing is over. For example, you don't have to know as much about technology as the chief information officer, but you do have to know enough about technology in order to be a true business partner. Strategic and leadership integration is very important. Nowadays you have a lot more executives making collaborative decisions. To be collaborative, you have to have a broader base of knowledge of what your colleagues are working on, what their priorities are.

Jeremy Hanson: Over time you want to get experience in the business; for example, as a business unit CFO/division vice president of finance -- roles that are connected to the operations of the business. This is important experience - sitting on a business-unit management team, helping to make decisions about where we're going to take the business, and how we're going to get from here to there. Not only do you pick up strong business skills in those roles, but you develop relationships across the business. Those are the real skills that prepare you to be a CFO in the future. A CFO not only influences those in the finance organization but also have to communicate effectively with his or her peers, the board of directors, and outside constituents such as Wall Street analysts and investors.

So should CFOs have more in common with other C-level executives than with finance staff?

Groysberg: You can think of people in those jobs as having a certain level human-capital skills and over time technical skills are less important and leadership skills are becoming more important. We find that that's not exactly the case. You still have to maintain technical knowledge of all the things that are going on in your function or you will be irrelevant as CFO. You won't be able to make good decisions in a fast-changing environment. But additionally, you have to acquire talent-management skills. So if you think of the skill set as a pie, it's not that leadership skills are a bigger piece of the pie, but that the pie is bigger; people in C-level jobs do a lot more.

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