by Matt Benaron

5 essential qualities of a modern finance leader

What are the qualities of the modern finance leader? And how has this role changed substantially over the past decade?

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The modern finance leader has changed substantially over the past decade – this is well known, and we rarely see organisations who perceive their finance function as simply a back-office team.

However, the changing demands of the finance team have resulted in new skillsets and personalities required to position finance as the hub of an organisation.

Finance leaders more than ever need to have a much broader multi-disciplinary business understanding to manage effectively incorporating a diverse team and operation from accounting, systems & data and a detailed knowledge of business operations.

Through effective leadership across the finance team, the foundations can be laid for a modern office of finance to lead the entire organisation.

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The changing role of the finance function

The outsider view of the finance function is often quite different from actual day-to-day practice.  People tend to view the office of finance as an isolated part of the business that simply revolves around crunching the numbers needed for compliance and reporting. 

Long gone are the days of the bookkeeping finance leader in the back-corner desk, plugging away at the general ledger. The role of the office finance has grown and evolved tremendously; alongside this, the role of the CFO has evolved significantly as well. 

New Expectations

The finance leader is expected to be a proactive and central contributor to the decision making of the overall company. Our experience at VantagePoint has shown us that the CFO is expected to act as the CEO’s right hand, providing key data to make the informed decisions necessary for overall business growth.

To do this, the finance leader must run a dynamic team that is efficient and effective in a multitude of systems and processes. These processes are no longer just retroactive but proactive and responsive to change. The office of finance must generate real-time financial data and utilise that data to forecast, budget, and plan accurately.

It goes without saying, managing the challenges and pressures of the modern finance function takes a modern finance leader with a broad skillset.

Below I have outlined the five qualities that VantagePoint looks for in a dynamic finance leader. These are the qualities CFOs and finance leaders alike need to possess to navigate the complexities and demands of a successful office of finance.

1. Overall Business Acumen

Accurate data is key to every business function. Arguably, the most valuable data regarding the overall health of the business is financial data. It is the finance leader’s responsibility to provide this data along with the insight needed for each individual business function to operate effectively.

To do this, an effective finance leader must understand the ins and outs of the day-to-day operations of each business function. He/she must have such an understanding that they can assess abstract data streams and evaluate how the information impacts each aspect of the business.  

The modern finance leader must act as an advisor for each function, providing strategy and key information for department benchmarking, forecasting, and overall performance management.

2. Translating Accounting & Finance

With an ever-changing landscape of management reporting, financial accounting and regulatory frameworks, typically all managed by the office of finance, it’s usually the finance leader’s responsibility to impact assess and manage the navigation of process change, new standards, regulations and the resulting impact.

There are some key areas in which decrypting these requirements to ensure clarity for the board is essential to establish an understanding of the impact, drive decision-making and achieve commitment for projects and change initiatives deployed in response to accounting and finance requirements. As a modern finance leader, they should be able to communicate effectively with all stakeholders to convert finance jargon into business-consumable language and present concepts and ideas effectively, catered to their audience.

3. Leadership Skills

Over the years, the pressures, and responsibilities of the office of finance have grown. Alongside this, the variance of roles offered within the function have grown as well. Data scientists, analysts, internal auditors, financial controllers are just a small section of “newer” roles that can be included within a complex modern office of finance. It takes a skilled leader to coordinate and orchestrate these various roles so they can harmonise and produce workflows of a wider value both effectively and efficiently.

CFOs must have the leadership skills necessary to develop a complex team that meets the various financial needs of the wider business and has the room to grow and respond to change. 

Each member of these multifaceted finance teams faces their own individual challenges and expectations. The finance leader must create a culture that fosters individual growth and ensures that pain points are addressed so the team can focus on strategic initiatives, instead of a sole focus on the day-to-day. The team needs to feel motivated and have the “bandwidth” to inspire sustained and consistent improvement and growth. When their team culture generates motivation, the finance function can act as an inspiration to the greater organisation and influence a business ethos of innovation and resilience. 

4. Analytical Skills

We can often be susceptible to tunnel-vision when it comes to our own work. We tend to have bias toward our projects, weighting the results and viewing our data with “blinkers” on. 

Modern CFOs must possess astute analytical skills. It is essential they utilise their experience to provide a broader view. This is especially the case when it comes to generating insight and recommendations based on the financial data. Each role provides a myriad of its own information and finance leaders must have the foresight not to get pigeonholed to any specific data set. They must pick out the overarching insights that he/she can use to generate actions and strategy.

5. Problem Solving

The greater economic and business landscape is evolving at a faster pace than ever before. Finance leaders must be practised problem solvers to successfully navigate the many changes that drastically impact the wider business. CFOs utilise their data in real-time to produce innovative solutions for complex problems that change daily.  

The problems of today will be overshadowed by the problems of tomorrow and modern CFOs must possess and build amongst their teams the resilience and agility to constantly adapt to the challenges and crises of the future. 

At VantagePoint, we have had the opportunity to develop and work with dynamic modern finance leaders. We have learned that the most important part of hiring these leaders is that they possess the qualities and leadership experience to act as a leader across the wider business and the tools to deal with the complexities of change. If the inherent leadership qualities are already present, the specific skillsets will come quickly. 

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