The Evolving Role of the CFO Part 3: Is Your Next-Level CFO Already Working for You?
To this point in our series about the evolving role of the CFO, we’ve discussed why and how the CFO’s role has changed, as well as recommendations for hiring a next-level CFO. What this exploration revealed is not only how necessary it is for growth-focused companies to have a next-level CFO, but also how difficult and costly it is to fill this role.
However, there is an alternative way to secure a highly strategic and forward-thinking individual to the lead your company’s financial function and guide its growth without engaging in a long and resource-intensive search. Specifically, using coaching and mentoring to transform an existing employee into your new next-level CFO.
Here is the case for coaching and mentoring, including how to ensure your effort is a success:
The COST Case for Coaching & Mentoring
We all know that scarcity and demand create a seller’s market. But in the case of the evolving CFO, there are other drivers that greatly increase the cost of hiring from the outside. Most obvious is the fact that the CFO is a C-level position and filling any C-level role requires a much more extensive search.
Also, the chances of finding the right individual in your company’s geographic backyard are slim, and thus a nationwide search may be required. Looking further out means your company will also spend more in order to persuade your top choice to move their life and, in all probability their family, to your company’s location. Logistical costs rise and, at the CFO level, the standard moving stipend won’t be enough.
Additionally, next-level CFOs are simply rare so no matter how wonderful and well-located your company is, courting and convincing your candidate will take more than a “too good to refuse” salary. It will take creative and enticing hiring arrangements and packages.
Clearly, coaching and mentoring an existing employee into the role of next-level CFO has significantly reduced price tag associated with it, making this approach quite attractive from a financial standpoint.
The TALENT RETENTION Case for Coaching and Mentoring
In the current business environment, recruiting top-notch talent is a high priority for companies and it’s more challenging than ever to retain great talent once they’re on board.
Although raises and bonuses are nothing to sneeze at, today’s employees value much more than their paycheck. They seek meaningful work and opportunities to grow – at least, those employees who are worth retaining.
Coaching and mentoring a valued financial employee who is outgrowing their position or is craving new opportunities is an excellent way to ensure this talented individual will stay with your company. Especially since their chances of making a move from their current position straight into the CFO role at another company may be unlikely given the stiff competition for those positions. They are simply untested and therefore won’t be attractive to an outside company seeking a next-level CFO. But you can make them ready for that exact role at your company.
The KNOWLEDGE Case for Coaching & Mentoring
While a next-level CFO from the outside with relevant industry experience will be able to hit the ground running thanks to their existing experience, they face a different kind of challenge and learning curve – learning your company specifically and building key relationships.
As we shared in Part 1 of this series, the evolving CFO helps to guide every facet of the business and this requires working closely with others in the C-suite, all department heads, their own financial team, as well as with board members, customers and other stakeholders. Credibility and trust must be built for a next-level CFO to be effective in these relationships, but the reality is that growing the confidence of others doesn’t happen over night.
Providing outside coaching and mentoring to an existing employee who is already known, liked and trusted throughout your company can shortcut the amount of time it takes for them to have a positive impact in their new role. After all, an existing employee who has already proven themselves to others will be more readily offered the support they need to fast-forward their progress.
Beyond having built strong relationships with individuals key to your company’s success, knowledge plays yet another role in the case for coaching and mentoring. Specifically, the vast amount of knowledge an internal employee already has about your company, its history, culture and its strengths, weaknesses and challenges is an invaluable asset. This knowledge will enable them to make smarter decisions faster. That is, as long as the employee being groomed to take on the role of your next-level CFO doesn’t let old “baggage” blur their vision.
This, of course, begs the question: What are the qualities and attributes to seek out when looking internally for your next-level CFO?
The Attributes to Look for in Your Internal Next-Level CFO Candidate
Willingness to Learn New Things: Not every employee is good at leaving their comfort zone to learn and practice new skills and behaviors needed to make them successful as your next-level CFO. After all, failure is part of learning and a person who is content to excel only at what they already excel at is not the right fit for coaching and mentoring.
Initiative to Grab the Gold Ring: In addition to simply the willingness to learn new skills when the opportunity arises, you need the employee you choose to coach and mentor to be your next-level CFO to be a person you’ve seen constantly seek out new opportunities on their own – as opposed to someone who waits for a new opportunities to fall into their lap.
Already a Success: The internal employee you are coaching and mentoring to be your next-level CFO is going to have a significant amount to learn in order to perform exceptionally in their new role. That means the person you select should already be a superstar in their current position and be a strong thinker and good communicator. You want to invest in getting them ready for new responsibilities, not spend time and money shoring up their experience and skills gaps related to their current job.
Desire to Do More: This is different than a willingness to learn new things. Rather it’s a desire to take on work above and beyond what’s already on their plate. Simply put, they must be willing to come in early, stay late, work weekends and just plain work more because while they’re being coached and mentored they still need to perform their existing job. Think about an employee who decides to work toward their Masters or a PhD while still fulfilling their work responsibilities at your company. This person does whatever it takes to find the extra time they need to complete their schoolwork and their job. The internal employee you choose to groom for the role of your next-level CFO will be playing double duty for some time, and they need to have an authentic desire to take on more work and be able to see the light (and the reward) at the end of the tunnel.
High Emotional Intelligence: Coaching and mentoring designed to take an employee into new territory means that employee will be receiving critical feedback regularly. But that doesn’t mean you need to find an employee with a thick skin. In fact, a thick skin is the opposite of what you’re looking for. Your internal next-level CFO candidate must be open to and actively invite feedback and critique. They also must want to improve themselves, be insightful and have the self-awareness and resiliency that come with high emotional intelligence.
Diligent About Delegating: A next-level CFO must be a master delegator and know how to effectively leverage the talents and time of others. Many employees and leaders think they must take everything on themselves – not only to demonstrate their value, but also because some of them believe they’re the only one who can “do it right.” This attitude and behavior means the individual has no room to take on new projects and, thus, learn and grow even more. An employee who doesn’t understand the value of delegating, and/or is not good at it, simply won’t make it in the C-suite.
The ULTIMATE Case for Coaching and Mentoring
Securing a next-level CFO from outside your company, with all the time and financial investment it involves, means you MUST get it right. You must find the ideal fit for the role because hiring the wrong person is not only financially devastating but can also put your company’s reputation at risk.
Selecting the right internal employee for the role – someone who is very talented in their current position and who wants to move up but would benefit from coaching mentoring – means you can test them out before you invest too much in the process.
You’ll see the signs that point to whether it’s working or not early on and, if you base your decision on the attributes listed above, those signs will almost certainly all say GO!
Did you miss any part of our Evolving Role of the CFO series? Find them here:
PART 1 – The Evolving Role of the CFO: Making the Shift from Reporting on the Journey to Leading the Way.
PART 2 – The Evolving Role of the CFO: How to Find Your Next-Level CFO.