Wow…what a busy month. I’ve finally found a moment to stop and reflect. Some finance projects I have been involved with lately reminded me of an article I read some time ago about how many Finance Directors see themselves as “CEO’s in waiting” (turns out that it was The Director magazine…only took me 20 minutes to rummage through my archived copies – but I was determined to give my source credit!).
If you think this is crazy (that FD’s think they can cut it as a CEO) then take a look at the make-up of the FTSE100 companies – reports indicate that a staggering 38% of CEO’s come from a finance background.
Now I know you are thinking “yeah but I’m not a FTSE 100 company”…well, very true but the principle is the same.
When you analyse the high percentage of finance trained CEO’s it makes more sense than you initially think. The image of the bean counter is long gone. Today’s FD is more like a seed-planter. There is so much data to absorb, investigate and act on. And so the finance role becomes a more strategic role. Companies need to run their organisation with the timing, precision and collaboration of a symphony orchestra. And whilst the business owner is out doing what they do best – drumming up business and creating opportunities – the FD is the one who takes on the role of conductor for the orchestra. Making sure that everything works according to plan.
But why the FD? Why not one of the other Directors or Managers?
My theory is that this phenomenon is because it is the “money man” that is the most trusted manager in the organisation. After all, you don’t give someone the keys to the safe unless you trust them. And once trust exists, information flows. The CEO sees the FD as a confidant and leans on them for their opinions, thoughts and as a sounding board. You are sharing your innermost secrets and knowledge of the business with the FD. No other directors or managers get this overview of the organisation or such “one on one” interaction with the CEO. Add to this a solid understanding of the financial position of the business and it is no surprise that the FD knows what is good about the organisation and what needs improving. And because they are not emotional about numbers they know what to do in a crisis (a little like a nurse or Doctor if faced with an accident – they don’t get freaked out by the situation, they just crack on and get the job done).
But the real power of the FD is when they break free from their spreadsheets and open up communication with operations and all the other departments. This enables positive change and transformation to take place; across the entire organisation. Therefore, to be successful and to influence positive outcomes, the FD needs to be a great communicator.
So if the FD is not an heir to the throne – let’s face it, no one can really do your job as CEO – at the very least they are a backup to the CEO and they need to echo the CEO’s vision and instil confidence in the troops and stakeholders. It is an ambassadorial position that brings enormous power and enormous responsibility.
Having an FD by your side can truly enable your business to flourish. As we can see, if used wisely, they do more than just add up numbers!