CFO Job Description | CFO Search Firm | Cowen Partners

      The Modern Chief Financial Officer

      There’s a Chief Financial Officer (CFO) crisis in the global economy. According to a 2015 study published by KPMG, 2/3 of surveyed CEOs believe that CFOs will increase in their significance over the next three years (which, incidentally, they have). Yet, 1/3 of those CEOs feel that their CFO is not up to the challenge. Now, this might not sound like news- CEOs putting pressure on CFOs is certainly not an unprecedented 21st century phenomenon- but it’s not just the CEOs of the world demanding more of Chief Financial Officers. It’s everyone.

      There was a time when the role of the CFO was grounded in risk aversion and crisis management. They were the ones maximizing company resources, monitoring cash flow, and tempering the large-scale visions of more creative executives to ensure longevity and stability. In 2020, however, the scope of a CFOs role is radically different. CFOs are now getting wrangled into more public-facing responsibilities, developing equal partnerships wit CEOs, and taking an active role in day-to-day operational management according to long-term strategic policy.

      Why? Because companies who don’t lean on their CFOs fall flat.

      The massive shift in responsibility stems from an unpredictable economic landscape. The terrain of our global marketplace is indeed changing at an accelerated rate, not in the least because of COVID-19 and its monumental financial disruption. Growth and longevity for businesses demand greater financial risk. The marketplace is much more volatile, and technology has globalized every industry out there, which deepens, expands, and complicates market niches and competition. The entrance of advanced technology, among other factors, has created a need for what KPMG has coined, “the Renaissance CFO.”

      Expectations & Experience of the Modern CFO

      What does this modern, 21st century CFO look like? They bring much more creativity, communication, and technological skillsets to the table. CFOs are no longer just accountants. They are a partner to the CEO, a vocal leader of an organization, and an action-based executive within the context of a company’s structure. What was once the highlight of a CFO’s resume – extensive financial management and accounting experience – is now a minimum requirement to take on a CFO role. In fact, a strong accounting and ERP system management background holds no guarantees.

      President and CFO Search Practice Managing Partner of Cowen Partners Executive Search, Shawn Cole, stated:

      “There is an evolution taking place. While CFOs with ERP experience have been in demand for a long time, ERP experience is now a prerequisite, not unlike an accounting or finance degree. Many of the CFOs we are placing are inheriting ERP selection and implementation initiatives at their new companies as part of their company’s data automation, analytics, and forecasting goals.”

      Technology has permeated every facet of commerce and generated increased opportunities for gains and losses. It determines everything from advertising and marketing to sales to internal operations, and it has the potential to make or break a company. Today’s unpredictable technology-driven market means that companies need to constantly cultivate stronger connections between departments that result in more strategic and organized operations. CFOs play an integral role in cohesive company management.

      Even more importantly, CEOs are looking for someone who understands how to leverage technology to improve data analysis, strategy development, risk management, and communication within departments. They want to see a CFO bring a wealth of both financial and non-financial expertise, innate creativity, and technological prowess to the table. They expect CFOs to use their abilities to implement meaningful, data-driven, and company-wide initiatives.

      CFOs & the Evolving Global Market

      Additionally, CEOs need CFOs that understand the global, changing market. They want CFOs that can use their understanding of emerging markets and new industry players to adapt and modify company strategy at a moment’s notice. Flexibility, creativity, and craftiness are three of the most in-demand soft skillsets to bring to a CFO role in 2020. Albeit a far cry from the isolated financial expertise of traditional CFOs, these abilities are crucial when it comes to crisis management and successful growth strategy. You can have decades of diverse financial management experience and get nowhere near a CFO office in today’s economic climate because it won’t mean anything without the ability to modify it in the face of new competitors.

      CFOs face the enormous task of acting as a bridge between daily operations, long-term strategy, and financial goals. The role of a CFO is no longer about signing off on expenses and monitoring budgetary concerns. Rather, the modern CFO has to look at their company’s cash flow, analyze it with effective and cutting-edge technologies, and work collaboratively with other executives to develop short-term and long-term plans that safeguard a company’s assets without compromising on a CEO’s vision. A CFO of 2020 needs to embody the detail-oriented and data-driven CFO of the past while embracing the volatility and international nature of today’s 21st-century markets.

      While the task of becoming a modern CFO may seem daunting, the role has never been more exciting, engaging, or unlimited in its potential to make a tangible impact on company growth and performance.

      The Four Chief Financial Officer Profiles

      Below are the four types of Chief Financial Officer (CFO) profiles, each with different competencies and areas of expertise. Understanding how each of these roles works within a company can help you determine which CFO profile is best for your business.

      1. The Financial Guru CFO

      The financial guru CFO has years of experience with different roles related to financial functions within a company. This typically includes duties such as financial planning and analysis, auditing and compliance, treasury, financial reporting, and controlling. The financial guru is often an internal hire, frequently a Controller or Chief Accounting Officer prior, and comes with a comprehensive understanding of the company as a whole. You can expect the financial guru to have an advanced accounting degree, CPA, and to excel at standardizing procedures.

      This particular profile is generally suited for businesses with inefficient financial departments or early-stage businesses that are scaling up and need to strengthen their financial functions.    

      2. The Jack-of-All-Trades CFO

      The jack-of-all-trades CFO typically has a broad range of experience and has often worked outside the company with exposure to multiple businesses. Other areas where these CFOs have worked include marketing, general management, and operations. Management and communication skills are often prioritized in this profile over more technical skills. The jack-of-all-trades CFO can be found both internally and externally and is hired at a company where personal influence is highly valued and required for results. 

      3. The Achievement Leader CFO

      Achievement leader CFOs are known for transforming businesses to create results. They modify financial functions and other processes within an organization to promote cost management and the use of metrics. Achievement leaders also focus on standardizing data and systems to enhance efficiency and performance within an organization. 

      The CFO with this profile is generally an outside hire with previous CFO or accounting experience. This type of CFO is beneficial for companies looking for exacting analytics and striving for aggressive growth. 

      4. The Change Agent CFO

      The change agent CFO is best suited for industries that experience a lot of disruptions. This type of CFO is an outside hire and has a background working in mergers and acquisitions (M&A) and has an extensive external network of resources as well as exceptional strategic insight. Businesses undergoing mergers and acquisitions as well as PE companies looking to revamp portfolio businesses are a good fit for this CFO profile.

      In many of these cases, the companies experience a considerable reshaping of the business as well as adjustments in resource allocation so a CFO who has experience with this type of disturbance can make the transition run more smoothly. 

      How to Make the CFO Role Fit Your Company: 3 Questions to Ask

      These profiles are not perfect. One may not cover exactly what you need in a CFO, but it is a place to start when shaping the role for your company. Use these profiles to determine the characteristics and general skill set of a CFO that will help your company grow the most. When searching for a new CFO, it is also a good idea to evaluate your current corporate strategy.

      Below are a few questions you should ask yourself as you start looking for your next CFO.

      1. What Is Your Corporate Strategy & Goals?

      Your CFO profile should reflect the structure and performance of your company. Knowledge of the industry is highly valuable when selecting your CFO, as is choosing someone whose characteristics fit the company’s strategic plan. CFO candidates will have financial expertise and management skills, but you need to determine where else your company’s CFO can be useful.

      For instance, if your company is pursuing an M&A strategy, then a CFO candidate experienced with mergers and acquisitions as well as proven strategic insight would be the best fit.

      2. What Are the Strengths & Weaknesses of Your Management Team?

      Hiring a new CFO is an opportunity to fill some of the skill gaps on your management team. Assess the strengths and weaknesses of the CEO and other leading board members to determine what expertise would benefit the team. A leadership team with a diverse skillset allows team members to lean on each other and build on one another’s strengths. Select a CFO who will shore up any weaknesses in your team. 

      3. How Capable Is Your Finance Group?

      It is important to determine how capable your financial functions currently are. If your company is currently struggling to efficiently manage basic financial functions such as accurate data and systems compliance, then you need to focus on a CFO with a financial guru-type profile. If your basic financial processes are not going well, then your first order of business needs to be strengthening this area above all else.

      It is a good idea to look at potential internal candidates to promote to CFO who have significant financial experience as well as a proven record of results. Of course, if your financial functions are running smoothly, then you can consider candidates with other qualifications such as more management experience and strategic insight. 

      Finding the right CFO for your company requires a lot of consideration concerning the right characteristics as well as the needs of the business. As you determine the right CFO profile for your company, remember how the CFO position has evolved over the years and adapt your profile to best fit your needs. 

      Top CFO Search Firm | Cowen Partners Executive Search

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      Cowen Partners is a national CFO search firm, driven to create value for our clients, and we have a long-standing record of placing exceptionally qualified Chief Financial Officers across all industries.

      As the nation’s leading CFO search firm, Cowen Partners is driven to create value for our clients. Read more of our industry-leading retained search resources to see why Cowen Partners is a top CFO search firm, including tax and accounting leadership, in New York City, Chicago, Seattle, Atlanta, Dallas, Los Angeles, and beyond:

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