If you read the bestseller book, Good to Great by leadership expert Jim Collins, then you will recall his findings on “Level 5 Leadership” to achieve greatness. To reach Level 5, leaders need to be highly capable individuals, a contributing team member, a competent manager, and an effective leader.
For today’s CFO, Level 5 Leadership is a requirement to help companies shape strategy, drive innovation, and sustain growth. The days in which number crunching was the be-all and end-all approach are gone. CFOs play more of a strategic mark within large companies, and they must increasingly rely on communication tools to help make sound decisions that improve business performance.
There are several modern challenges CFOs must overcome to achieve leadership greatness. A recent article in the Journal of Accountancy explains some of these challenges, which were pulled from an EY study of more than 750 finance leaders.
One main challenge is for finance leaders to be savvier in the digital space. Being up to speed on the latest technological advancements is a must for CFOs who want to help their firms drive innovation and remain competitive.
Blockchain is a technology that operates as a distributed electronic ledger, and is the foundation for cryptocurrencies like Bitcoin. It is becoming particularly important as it can help transform corporate reporting. Robotic process automation is another technology finance leaders are looking into as it can help automate and reduce the cost of back-office processes.
“Twenty years ago, PivotTables were cutting-edge. Mobility is today’s challenge—taking disparate systems and putting them in the cloud and making them secure and accessible in real time, so you can make decisions today instead of tomorrow.” – Chris Rogers, CPA, CGMA, the CFO of Infragistics, a U.S. software developer with operations in Europe and Asia
There are also countless other technologies departments outside of finance are presented with that can help improve business performance. Digitally savvy finance leaders can collaborate with cross-functional teams spread across the globe using video conferencing to look at what technologies will provide the best ROI and coordinate investments accordingly.
Data analytics is another main challenge for CFOs. Over the past ten years, half of the finance leaders surveyed have increasingly spent more time on advanced analytics.
And it’s not just pulling data that affects only CFOs. CFOs are also responsible for reporting this data to the CEO and other senior leaders on a frequent basis.
Risk management and improving relationship management skills with stakeholders were the final main challenges identified for CFOs to overcome. Great CFOs think beyond prevention and identify strategic risks. They are also capable of bringing up risks in strategic and business planning discussions, and they take the time and resources to recruit talent with the right hard and soft skills.
“A great CFO is a great communicator and is as comfortable talking to boards and investors as [he or she is talking to] a roomful of software engineers. They are flexible and listen to ideas, commercially astute, and up to date with technologies.” – Pip Spibey, ACMA, CGMA, the CFO at Travelport Locomote.
John Laing Group plc, a British developer and operator of privately financed public sector infrastructure projects has done remarkably well in managing risk and improving collaboration among stakeholders. With employees geographically dispersed, teams frequently collaborate face-to-face securely in real-time through video conferencing while managing the development risk, project financing, asset management and operations with its partners and project supply chain.
Approximately half of the company’s 1,000 employees collaborate through a desktop-based or room-based video solution, and the use of these video conferencing solutions has helped staff greatly improve their internal and external communications.
To go from good to great, CFOs must become Level 5 Leaders. To achieve this level of leadership greatness, CFOs need to overcome the main challenges of digital know-how, data analytics, risk management, and relationship management skills. Using video conferencing platforms can help CFOs overcome these challenges to drive business forward when collaborating internally or externally with teams across the globe.