For more than a decade, executive recruiters and other experts on the CFO role have insisted that CFOs must be more strategic-thinking. Moreover, the business-minded finance chief must in turn lead the finance team to align with the rest of the organization. Yet it seems many CFOs continue to struggle with the perception — or reality, in some cases — that their departments are disturbingly disconnected from company strategy and performance.
Scott Engler, senior research director at the Washington-based Corporate Executive Board, for example, notes in his Talent Matters blog, based on a recent CEB survey of CFOs, that “only one in 10 finance chiefs think their finance teams have a positive influence on corporate performance, company strategy, or preventing risk events.”
As often as we hear it stressed that a finance organization make itself much more than a collection of accountants, it is rare that we encounter an analysis of how finance departments manage to do it. This week in Talent Matters, Engler does just that, shedding light on how some approaches to finance-talent strategy are a recipe for an underachieving finance team.
Actually, it’s in lacking a real approach, to start with, that CFOs often go wrong. Engler notes that as finance takes on more, often creating an ad-hoc approach to respond to business requests: “after a few years CFOs often look at their finance team and see a function built in piecemeal form and ill-suited to support current and future corporate strategy.”
Lack of focus is the culprit even at the most basic level: team assessment. Engler cites another CFO survey in which only one-third of the respondents reported that they assess the overall talent requirements for finance. The result can be that the finance department’s capabilities “don’t align with what the business needs,” he notes. Even with the right technical skills, directionless finance departments “often lack the advisory ability that will help translate their expertise into line managers making better business decisions.”
The lesson is that finance leaders must consider strategy and talent management in concert. Indeed, doing so offers the bonus of helping retain key contributors — those who are needed to make true strategic thinking and acting a reality.
And that’s a bonus greatly to be desired.