Improve Your Change Leader Effectiveness
The pain of change comes from within. You need to face your own ego and self-imposed limitations.August 5, 2010
by Ron Rael, CPA
In our role as the head of the accounting function, we often are so focused on our to-do lists, tasks and deadlines that we fail to take the time to look at the Big Picture. This first step is designed to give you a global view of where the role of the CFO and by extension, the Controller is heading. You will quickly discover that the role we play must change or we will be left behind. The reasons for this are many and mostly because we are now in the global economy where speed, flexibility and innovation are the coin of the realm.
Whether we like it or not, the profession that we work for is changing rapidly and significantly. What will this mean for you? This will depend on how you view your role and what the organization needs you to do. Despite that, there are some clear indications that the role of the Controller will change, because the CFO’s role is changing as well.
We are focusing on the CFO for three reasons:
The essence of the significant changes predicted is that the role of the CFO in the year 2010 would be shaped by their position on a global corporate stage. Here are some experts’ thoughts on the CFO evolution.
Listen to the Experts
John Connors is the CFO of Microsoft. “People will have access to information in a way that they never had in the past,” he said in a recent interview, “which means the premium on communicating financial information will be enormous.”
Jan Hommen is the global CFO of the electronic giant Philips. “The speed at which you will have to do things will be mind-boggling,” he warns us.
Norman Lyle, group finance director of Jardine Matheson in Hong Kong, summed up the way CFOs will change. “The CFO,” he said, “needs to guard the information. The CFO is now often seen as the automatic deputy CEO and is the person who deals with the outside world. The CFO will need the courage and conviction to stand up to their business colleagues.”
John Schmoll, CFO of Coles Myer, Australia’s largest retail group, thought the CFOs by the year 2010 “will have to be experts at interpreting the information and communicating it to the organization.”
The Pain in Internal Accounting Today
These are four significant realities that are impacting the internal accounting function today and most significantly affecting the responsibilities and duties of the Controller:
The Solution to These Pains and the Change
Controllers need to redefine their role and become the Key Financial Strategist. This title describes what the Controller needs to be:
I strongly urge you to go back and redefine your formal job description and put this title in it. This will remind you how you can best serve as the financial-minded change agent and conscience in the organization that you work for.
The Rapidly Changing World of the Accounting Leader
The CFO and Controller position demands, as it always has, a high degree of technical competence in financial control and reporting. But the current environment, with its intense focus on corporate governance and transparency of information, also calls for a financial leader who is an exceptional communicator. Of all the skills required in this position, none is more valuable than the ability to build confidence and trust.
No longer merely a staff function narrowly focused on the mechanics of finance, the CFO/Controller position now encompasses many different corporate activities and this calls for an equally wide range of competencies. Above all, the CFO is one of the CEO’s strategic partners — not just focusing on the numbers, but also providing valuable counsel on running the business.
The CFO’s job used to be transaction-intensive. Now it is knowledge-intensive. Typical CFOs once spent most of their time on recording and reporting. Now the CFO is expected to contribute to a strategic assessment of the company and to develop corporate strategies — and often take a lead in strategic efforts.
The CFO and Controller’s sphere of responsibilities has grown so large that it touches nearly every facet of corporate activity. Creating, enabling and controlling corporate infrastructures have thrust the CFO to the corporate frontline. Whether these role expansions are in strategic risk management or driving the technological advancements to achieve productivity gains, the CFO/Controller is at the forefront of each pendulum swing in business.
It is essential for the CFO to have a close working partnership with the CEO and the rest of the senior leadership team, as well as with the board. Coupling a sound foundation of financial mechanics with practical expertise, these executives want finance to play a key role in the strategic process, linking business, financial, human resources and information systems strategies into a comprehensive whole.
Team building is one of the most valuable skills that operating experience can teach financial executives.
CFOs also have a responsibility to attract and develop a line of leadership succession within their group. Shaping a culture of excellence, integrity and accountability, articulating a vision and focusing the team’s energy — these are all vital components of a CFO and Controller’s skillset, as vital as technical proficiency.
Organizations have grown so complex and the business environment so competitive, that corporate management has become, of necessity, a matter of networks. Organizations are recognizing that collaboration is not just a good idea; it is the only way to tackle the challenges confronting business.
In times of crisis, the seamlessness of the leadership team is critical. The CFO’s capability to quickly grasp and communicate the short and long-term financial ramifications of decisions is paramount. As a CFO, you are always looking at the interplay between the company and the financial markets and seeking opportunities to add long-term value.
CFOs can help government produce genuine reform rather than rules that stifle innovation or otherwise burden business.
The job of the CFO and Controller is not for the easily discouraged or fatigued. It is a high capacity position that calls on a wide-range of skills and competencies.
The CFO of any corporation holds one of the toughest jobs in business and it is getting tougher. At the same time, though, the CFO is continually moving closer to the strategic center of the corporation. The CFO is a key collaborator in the transformation.
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Ron Rael, CPA, is a leadership coach and an award-winning speaker and facilitator who uses advanced learning techniques to deliver measurable, bottom-line results. His highly customized High Road training systems shape existing and emerging leaders. As a coach to individuals, Rael strikes a balance between encouragement and accountability, assisting the emerging leader to write and implement a personal action plan for growth and improvement. He has personally trained thousands of leaders and business professionals throughout the United States and Canada.