I remember thinking that once I became a finance director, I would feel confident as a skilled finance leader. Not only that, but the job description would translate into a weekly, monthly and quarterly task list.

From experience, neither assumption is true, especially at startups and scaleups. These two assumptions are also more inaccurate as CEOs/founders, board members and the leadership team lean on the chief financial officer (CFO) for a more strategic partnership, rather than financial stewardship.

As the world becomes more complex, risk averse, changeable, and compliance focused, there are continued expectations for the CFO to help drive business strategy, innovation and growth.

Successful CFOs focus on not just the baseline and technical expertise, but also need to adopt a multifaceted mindset.

Thinking beyond the ledger

One of the key steps to ensure that the finance department and leader is working towards the strategic vision is to ensure that the financial goals are aligned to the long-term business objectives.

There are four stages to achieving this.

First, it’s the understanding of the company’s vision and mission. Often this is well understood within the business and is communicated on a regular basis. On occasion however, this isn’t always the case. A CFO should ensure that there is clarity here and it is understood around the business.

Secondly, it’s the understanding of, or the creation of, the three to five strategic goals. Taking the vision and mission into account, what does the business want to achieve in the next 12-36 months?

Ideally, the entire leadership team should be part of this process, as they are the ones to drive the business forward towards these strategic goals, and the CFO is no exception. On occasion, the CFO is driving these conversations, ensuring buy-in and communicating to the wider business.

Next up are the operational goals. Each leader and department needs to understand what they need to achieve in order to hit the strategic goals. What are the stepping stones to get to where the business wants to get to?

The CFO will often oversee these discussions and ensure coherence. There is no point, for example, for the commercial team to rely on a tech implementation to happen within a given timeframe if the tech team doesn't have these goals as part of their operational plans.

The CFO will also need to understand what the resource requirements are with each plan. What is the headcount requirement? Are there any software implementation requirements? What about CAPEX?

The fourth and final stage is turning the operational plans into a financial plan and ensuring that these operational goals make financial sense. If they don’t make financial sense, then the business will need to review the operational plans to see how they can be changed to meet the financial requirements.

Leading with empathy and insight

Emotional intelligence is a key skill needed by all leaders, including the CFO as a huge part of the CFO’s role is developing and maintaining strong relationships as well as communication with the wider business. This cannot be developed without empathy and self-awareness.

Ideally, the CFO is working closely with the business leaders, key stakeholders, investors, board members, auditors, bankers, the list goes on. To be able to keep these relationships strong and impactful, the CFO will need to be mindful of their emotional intelligence.

A big part of a leader’s role is to influence decision making, encourage cooperation, and commitment to the businesses trajectory. It’s very difficult to encourage this kind of behaviour from many different stakeholders if no emotional intelligence has been considered. This is key for all leaders, not just a CFO.

Not only does there need to be an understanding, a CFO also needs to be a good communicator to non-financial stakeholders. Taking the numbers and presenting them as a story and driving decision making conversations is key.

Maintaining a good culture within a business is also important for success, particularly in a startup or scaleup where teams are quite small. The culture comes from the top, the leadership team. Therefore, the CFO needs to be mindful of the culture their actions and communication skills are encouraging.

Navigating change in a dynamic environment

Over the last five years, there have been global health crisis, Brexit, multiple wars, US tariffs - and that is just the tip of the iceberg.

Throw in artificial intelligence (AI), market changes and environment, social, governance (ESG) and it is clear how necessary both leadership teams and the CFO need to be agile and flexible to deal with these kinds of continuous changes.

It’s getting harder and harder to forecast the future and therefore a CFO needs to be open to flexibility, continuous learning and open to innovation.

Scenario planning, mitigation and flexibility allows for a CFO to work with all the different market and macroeconomic conditions that are thrown at a business. To ignore these possibilities or to remain reactive will leave the business behind the competition.

Building trust and upholding standards

As part of our accounting training, ethical standards are a big part of the curriculum. It should also be a big part of the CFO role as well.

As part of the leadership team, whether the topic is commercial or operational, taking a view on integrity and ethical judgment should not be overlooked. Taking a step back and viewing the topic from a high level, can often provide this visibility.

As many leaders are involved in the details within their department, the CFO has the benefit of a high level view and can challenge the business both from a commercial perspective but more critically from an ethical point of view.

Ethical decision making not only encourages trust around the business and with external stakeholders, but it also supports sustainable business practices.

To succeed a CFO needs to adhere to a strategic vision, emotional intelligence, adaptability, communication skills, and ethical integrity.

About the author

Alysha Randall CPA is founder & CEO of Fast Growth Consulting, and author of Financial Leadership Fundamentals