The pandemic has presented local government finance chiefs with an extreme challenge. Nathan Elvery surveys the qualities needed in the modern CFO.
As part of a new series of articles focusing on a deeper perspective of the role of the CFO in a time of crisis I thought I would start with the most important part of the equation, the CFO themselves, remembering that CFO’s are only human after all.
To deliver the key responsibilities of the CFO, the CFO must lead and direct a finance function that is resourced to be fit for purpose. For the purposes of this deeper perspective the need to focus on their leadership skills becomes critical in a time of crisis.
The CFO, as the organisation’s most senior executive role charged with leading and directing financial strategy and operations, occupies a pivotal role, both for external stakeholders and within the leadership team. Delivering this role requires a range of personal qualities, as well as support from both the finance function and the organisation as a whole.
Leadership comes in many shapes and sizes, and much has been written about the characteristics of good leadership and the skills good leaders need to possess. However, during a period of upheaval some of these characteristics become more important than others. That is not to say we should forget the others, but some require a little more focus and detailed attention.
Empathy
Your team will be facing numerous challenges at present, this is a critical time to understand their circumstances. Through this understanding you can, and should, demonstrate empathy. This allows you to be flexible and provide support to your team in the most challenging of times.
During a shock event, no job is more important than taking care of your team. Effective CFO’s are understanding of their team’s circumstances and distractions, but they find ways to engage and motivate, clearly and thoroughly communicating important new goals and information.
Ask “How are you?”, remembering there are three types of empathy, cognitive, emotional and compassionate. Now more than ever is a time for compassionate empathy and understanding. This will be remembered long troubles are over.
Communication
Communicate, communicate, communicate. A crisis can often result in a shift of culture to one which is more “command and control” but it need not be with good communication.
The situation is changing by the day, even by the hour. The best CFO’s process available information quickly, rapidly determine what matters most, and make decisions with conviction.
During periods of stress cognitive overload looms: Information is incomplete, interests and priorities may clash, and emotions and anxieties run high. Analysis paralysis can easily result. A simple, scalable framework for rapid decision-making is critical, so set routine and regular updates for your team and all your stakeholders.
The need to do this personally will be essential to your leadership team and to your staff. Hearing your words and seeing you will help to provide direction for your leadership whilst providing reassurance.
Communication is two-way so build time into these regular routines to listen. As the saying goes there is a reason why we have two ears and one mouth, this should set the balance of your communication engagement with your team and stakeholders.
Delegation
The best CFO’s take personal ownership, even though many challenges and factors lie outside their control. They align team focus, establish new metrics to monitor performance, and create a culture of accountability.
However, remember the need to involve others, seek alternative views and share the load becomes increasingly vital. Your team will want to help, so give yourself the space to think and organise the delegation of tasks to help bring order and structure to the solutions you need for success.
The more you delegate the more time you will create for yourself. The CFO must look to the future as well as being present in the immediate. Delegation can help to improve outcomes in both.
Courage
The challenges facing organisations in the current climate is enormous, the need for the courage of CFO’s to match this challenge is paramount.
Strong leaders get ahead of changing circumstances. They seek input and information from diverse sources, are not afraid to admit what they don’t know, and bring in outside expertise when needed.
These challenging times
Where we are placed under enormous individual pressure it can bring out the very best in people. It can also bring out the worst. Importantly, a CFO should take time to recharge their energies. You will be a better leader if you are personally in your best mental and physical space.
CFO’s will be better leaders and make better decisions after a good night’s sleep rather than at the end of a long “locked-down” day. The expression, “I’ll sleep on it” was not invented to avoid decisions but to enable the connection between our consciousness and subconsciousness to come at the decision afresh with an objective perspective. Objectivity is a key skill set for any CFO.
These are challenging times, skills and personal resilience will be tested. But remember, you are only human and you are not alone. There are many individuals and organisations available to provide advice and support to the CFO. My advice is make the most of them.
Having someone available can make all the difference, so CFOs should draw on the wider experience of others where ever possible. Asking for support and help is not a weakness but a sign of strength.
Nathan Elvery is past president of the Society of London Treasurer’s and past president of the Association of Local Authority Treasurer’s. He is managing director at Imagine Public Services.
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