Over the past two years, the most successful businesses were those who were able to effectively navigate the waters of change. Change as to the demands of key stakeholders, including customers, suppliers, investors and employees. Terms such as disruption, capital, infrastructure, transactions, transitions, decisions and relationships capture the essence of what most businesses now confront on a daily basis.

The ability of a business’s finance team to provide critical insights and information to leadership that helps drive results will impact the ability of businesses to sustain their success going forward. Now, more than ever, businesses need a leader of their finance team. A leader whose role is properly aligned with the strategic objectives of the business. Enter the chief financial officer (CFO).

The role of a CFO is not the same for all businesses

The relative size and complexity of a business, along with the leadership structure in place and the strategic objectives of the business serve to shape the role of the CFO. For example, the needs of one business may demand the CFO to be a “catalyst of change,” with the ability to institute organizational change as to reengineered processes, digital transformation, aligning and nurturing talent, etc. Another business might need the CFO to be a “steward,” effectively managing organizational risk, protecting and preserving the assets of the business and providing financial reporting to key stakeholders. Alternatively, a CFO may need to be a “strategist,” a leader in determining business direction, financing structure, acquisitions, evaluating new market opportunities, etc.

Zeroing in on the right person

Finding the right person for any key role in a business is vital to the success of the business. Finding the right CFO is equally important. To maximize the likelihood of success, many businesses follow a two-step process:

1. Clearly defining the role.
2. Objectively evaluating candidates.

Defining the role

The more specific a CFO job description can be relative to responsibilities, expectations, and behavioral requirements, the greater the likelihood of identifying an ideal candidate. To achieve this, soliciting the input of various stakeholders would be beneficial. Key stakeholders may include the board of directors, business owners, key executives, department leaders and team members who will interact with this person.

Evaluating candidates

Identifying the ideal candidate to serve as your new CFO means going beyond the traditional resume and work history. Ideally you should strive to gather a broader range of information, including, an understanding of their knowledge, skills, education, behavioral profile, cognitive ability and values. Furthermore, and perhaps most important, is determining a candidate’s cultural fit within your organization. You can collect this additional information during the interview process and through a series of assessments that many organizations offer. While once a very manual process, advances in technology and the use of artificial intelligence have resulted in the ability to incorporate these tools in a very efficient and cost-effective manner.

Avoiding the risk of losing the right person – survey says …

In November 2021, The Predictive Index surveyed 326 executives about the Great Resignation. The survey goes into great depth as to why employees, including executives leave an organization and why they stay. Some key findings of the survey include:

• The No. 1 reason executives stay with an organization is “job fit.”
• The No. 1 reason executives leave an organization is “inflexibility.”
• Companies with the “right people in the right roles” have 42% lower turnover.

In summary

The role of the finance team has been instrumental in enabling businesses to effectively confront the challenges of the past two years. Their role going forward will be equally if not more important, highlighting the need for a CFO to lead the way. The ability of business leaders to develop a strategy to hire an individual best suited to serve in that role and to deploy an equally important strategy to retain that individual for the long-term will have a significant impact on the future success of the business.

To read the article on the Business First of Buffalo website, click here.  

The Client Accounting & Advisory Solution (CAAS) of Dopkins & Company, LLP is centered on helping our clients transform the accounting and finance function of their businesses to more effectively confront challenges and seize opportunities that drive business results and create value. To learn more, visit Dopkins at www.dopkins.com/CAAS.

Dopkins & Company, LLP also offers comprehensive accounting, auditing and tax services, forensic accounting, as well as information technology, wealth management consulting, internal audit support, and collateral examinations to privately held and public companies, not-for-profit organizations and individuals.