Q

How CFOs can become trusted business partners

The CFO role is becoming more service-oriented. Rob Livingstone provides tips on how CFOs can develop positive and influential relationships.

How can CFOs build effective relationships with operations managers?

CFOs stand at the intersection of many functions across the enterprise and therefore, they have a unique vantage point. With this perspective, CFOs are often able to recognize opportunities for enterprise-wide improvements that line managers and executives with functionally specific roles might not.

Rob LivingstoneRob Livingstone

In addition, besides the core accountabilities regarding financial management, CFOs have shared accountabilities in areas such as enterprise risk, compliance, procurement, cost control, legal and governance, and are faced with the constant challenge of effectively managing the multiple versions of reality held by the influential managers of these portfolios. For example, a sales manager may have a bias to in trade-off risk with the drive to meet sales targets, whereas the CFO would have a much broader perspective on risk.

CFOs with accountability for enterprise IT are finding themselves in the increasingly unenviable position of having to broker the often fractured relationship between IT and the business at large. This is fuelled in part by influences such as the consumerization of IT.

Considering that each organization's structure, culture, compliance load and risk appetite differs, there is no silver bullet or one-size-fits-all approach for finance executives to build effective working relationships with managers across the organization. However, developing and demonstrating the following skills and attributes can be transformative in cultivating partnerships:

  1. Empathize: Leadership is situational. If your leadership style broadcasts the message "my way or the highway," you make it more difficult for yourself to see the issue from someone else's perspective. You might also discourage others from offering valuable insights and perspectives on the issue at hand.
  2. Reassess your ability to influence: The voices of engineers, scientists, accountants and other professionals who are grounded in numeracy, logic and evidence-based decision making can be overrun by the ill-founded opinions of others with greater influence.
  3. Drop the binary thinking: Depending on the situation, prescribing a particular solution or approach may not be the best way to deal with others. Recognize that being right is not always the right thing to do, and harness the power of asking open questions. You may know the answer, but they might not. By considering and answering your insightful and open questions, others are more likely to come around to the same realization as you.
  4. Initiate cross-functional collaboration wherever possible: Organizations shouldn't be at war with themselves. Companies where everyone has a set of objectives that are aligned with the overall goals of the organization are better able to cope with volatility and more likely to be successful. A toxic, adversarial culture breeds defensiveness, latent hostility and, most damagingly, a disinterest in the long-term success of the organization. Getting people to work collaboratively is Management 101, but it is often overlooked in time-starved, pressured environments where the need to meet the next short-term target trumps all else.
  5. Review managerial incentive schemes: Business unit management incentive schemes can be counterproductive if poorly structured. What financial incentives do business executives have for the (long-term) success of the enterprise?
  6. Manage your reputation: What do you want others to say about you when you've left the room? Make a conscious effort to manage your reputation in the eyes of those with whom you come into contact. It's an important part of your influence over others who do not fall within your chain of command.

CFOs who can reach their full potential within the organization by developing trusted, powerful and influential relationships with others over whom they have no direct authority will play an important part in ensuring the future success of  both their organization and their careers.

Rob Livingstone is a former chief information officer with more than three decades of experience in the corporate world. In addition to running his IT advisory practice, he is an author and commentator, providing authoritative, independent insights on a range of IT topics including emerging technologies, governance and IT security. Rob is the author of the book "Navigating Through the Cloud," and is also a Fellow at the University of Technology, Sydney, Australia, where he teaches leadership, strategy and innovation in the school's flagship MBITM program. Visit Rob at www.rob-livingstone.com or e-mail him at rob@rob-livingstone.com.

This was first published in April 2014

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