Good morning.
Being a first-time CFO has never been easy exactly—but it has arguably never been harder than now.
“Anecdotally, I would say finance chiefs are under more pressure in their first year due to both the evolution of the role of the CFO and resulting expectations of the role,” says Alyse Bodine, global managing partner of the financial officers practice at the executive search and consulting firm Heidrick & Struggles.
The firm's financial officers practice team recently released a "First-time CFO guide." It’s based on conversations with more than 60 sitting and former finance chiefs around the world. The team saw the need for such a guide, says Bodine, a coauthor. Oftentimes they field questions from first-time CFOs regarding what they should anticipate or prepare for, she says.
Here’s a summary of the nine steps first-time CFOs, across regions, should focus on, based on the report:
—Build strong stakeholder relationships with effective communication.
—Work with the board. “You have to add value; they need to see that you bring something to the table,” a former CFO, now CEO, told the firm.
—Build a relationship with the CEO.
—Embrace the business strategy role.
—Execute full-functional leadership: It’s important to have a strategic overview of the entire company, but also keep a hand on the finance function, according to the firm.
—Build high-performance teams.
—Have an influence on technology implementation: “There are many CFOs who [would rather] focus on their area of expertise, but there’s no choice now,” a finance chief told the firm.
—Take responsibility for ESG.
—Create your personal leadership style.
Within the guide, there are three regional focuses: the U.S., Asia-Pacific and the Middle East, and Europe and Africa. A Heidrick & Struggles analysis found that 72% of current Fortune 100 CFOs were appointed to their current roles as first-time CFOs, according to the firm. Taking a look at the guide for CFOs in the U.S., the top three priorities based on CFO interviews are:
—Understanding the business in depth: “You’re not expected to be the expert in all facets of the business, but you should be a partner who’s willing to lean in and learn and knows when to ask for more information,” a CFO told the firm.
—Understanding the impact and potential of technology: “I’ve gone to the extent of finding a consultant who helps me stay up to speed with the evolving needs of companies in this regard so that when I’m working with my chief information officer, I’m not unarmed by my lack of a tech background,” a CFO said.
—Nurturing strong relationships with the CEO, board, and executive team: A few qualities are key to building these relationships, such as clarity, honesty, and transparency, according to the firm.
Bodine says the project was an opportunity to tap into the firm’s network and ask proven CFOs for their thoughts and advice. And the guide is also a way for CFOs to “pay it forward,” she says.
Sheryl Estrada
sheryl.estrada@fortune.com
