In a Forbes survey of 178 chief executives from high-performing companies earlier this year, nearly 75 percent of the executives predicted that the CFO’s role will grow in importance more than any other C-suite position.
At most major firms, CFOs are no longer just spreadsheet wizards responsible for the financial well-being of the company. Today’s CFOs need to be just as adept with people as they are with numbers.
These people skills are especially critical when a company is undergoing transformative growth. Consider our experience over the past five years with Adobe’s move to a cloud-based service company.
Adobe’s decision to shift from shrink-wrapped software to a SaaS-based company was certainly risky; we were anticipating a significant drop in revenue and earnings in the first few years. It has always been important to us to look beyond the short-term and explain to employees, customers, partners and Wall Street why the change is better for us in the long run.
Communicating frequently and regularly with employees has been critical in helping people understand, adapt and align with the new business model. It’s a strong part of our culture at Adobe. Following each quarterly earnings and to this day, our CEO Shantanu Narayen and I present and take questions on company milestones and results at quarterly all-employee meetings. Our leadership team participates regularly in employee site Q&A meetings across Adobe’s global footprint. We use other channels such as video, brown bags, small group meetings and our own tools, such as Adobe Voice, to reach employees and get their feedback.
Having employees on board with a company’s vision increases employee satisfaction and drives innovation. It’s no surprise that the stocks of companies that make it onto the list of Fortune’s “100 Best Companies to Work for in America” have consistently outperformed those of their peers by 2 to 3 percent each year over a 26-year period. Researchers have concluded that “it’s satisfaction that causes performance, not the other way round.”
In addition to employees, we’ve also had to ensure that our investors fully understand and are on board with our transition. We’ve learned that the best way to do this is by over-communicating with them. In addition to sharing quarterly results and participating in conferences and one-on-one meetings, we also provide three-year targets. We’ve held twice-a-year analyst events, sharing our strategic vision and growth opportunities. As a result, Wall Street has been able to follow where we stand in our transition plan and model it effectively.
Of course, leading transformative change takes much more than telling our story. It’s just as much about developing the next generation of leaders who can support growth and scale with the business.
Here’s something to think about. There is a perceptible link between a finance department’s success and a CFO’s ability to work well with people. A survey of 119 CFOs by the business research group APQC, for instance, found that “[f]inance organizations that are considered effective business partners tend to work for CFOs who have a strong commitment to professional training,” including areas like leadership training and presentation skills.
Aspiring CFOs should take note. Recognize that thriving in this position will take more than technical acumen. Build your emotional intelligence to guide your team and set them up for success. Grow your network and nurture diverse experiences to be better rounded. Participate in public speaking so you can learn how to communicate across broad audiences.
A CFO’s ability to inspire confidence, nourish professional relationships, and communicate persuasively is just as critical as their financial expertise. By developing these skills, CFOs can be stronger partners to the CEO and business leaders and also serve as stronger stewards of their company’s growth.