By Andy Burrows
There are three areas of skills you need to develop if you want to be a good Chief Financial Officer or Finance business partner – business acumen, technical skills and behavioural skills.
And my intention is to unpack these three areas a little bit, so that you can get to grips with planning your development journey more effectively.
In another article I shared my belief that Finance business partner is the new best route to a CFO role. That is to say, core CFO skills are Finance business partnering skills. And well-developed Finance business partnering skills are what you need to be a CFO.
(To be clear, I’m not intending to imply that Finance business partners can progress to CFO level without some training and experience in accounting, reporting and control – sorry if I’ve ever given that impression.)
That’s why I’m talking about the two together, and why I believe that if your ambition is to be a CFO, you ought to be thinking about the same areas of skill that Finance business partners need.
And since with any skill you can’t develop it without practice, what better practice for a CFO role than a Finance business partner role, once you’ve had your foundational experience in accounting, reporting, planning and analysis?
So, let me tell you about the three skills areas you have to concentrate on.
But before I do, let me acknowledge a key influence here. I’m taking Finance business partnering skills categories from a very good book by Alan Warner, called Finance Business Partnering – the search for value.
Warner’s work is based on case studies working with large businesses such as Shell, Unilever, BAT, Rolls Royce and Aviva.
He has summarised the common themes amongst the leaders in implementing Finance business partnering. And in terms of skills required, these fall into three categories:
I think this is a really helpful way of looking at it. And since CFOs are the top-level Finance business partners, I’m going to generalise and say that these categories work for CFOs too.
So, I’m going to do my best to outline what’s under these three headings.
Firstly, as you progress through Finance business partnering and on to a Chief Financial Officer role you’ll need to develop higher technical skills.
But which technical skills?
Well, I don’t mean you have to be the “Technical Accountant”. You don’t have to stay up to date with all the latest pronouncements from the IASB.
Sure, you do need to be able to grasp the way that accounting standards apply to your business, especially where things are changing. But so long as you have someone who is good at that kind of thing, you don’t have to be the one keeping track of it and going on the update courses.
So, don’t use up your external course budget going on IFRS update courses!
Really, I’m talking about what we used to call management accounting. It’s the stuff of FP&A.
And the skills I’m talking about are the ones involved in business performance management. They are all about the tools that help to manage performance.
So, here’s a (non-exhaustive) list of ideas to get you going:
Feel free to add others in the comments below. I would seriously love to hear your ideas.
Secondly, Finance business partners and CFOs need to develop business acumen.
Now, business acumen is one of those concepts that sounds a bit vague. So, let’s make it a little more real. Because how can you develop something when you don’t know what it is!?
I did a little bit of research into what is meant by business acumen. And there is no generally accepted definition of it. Every place you look explains it differently. So, here’s the way I’ve synergised what I’ve learnt.
I like what Alan Warner says:
“We see the core requirement as understanding what running a successful business is all about, how each function and management team need to make an appropriate contribution to long-term value creation. It is about encouraging fact based decisions, understanding the importance of strategic advantage and how it can best be applied in different contexts. It is also about understanding the competition and knowing how to beat them, about knowing your customers and how best to meet their needs. And finally it is about joining in the identification of business opportunities while showing understanding of the pressures and constraints of colleagues.” (loc 405, Alan Warner, Finance Business Partnering - the search for value, Kindle Edition.)
The unfortunate thing in my view – and I may be misunderstanding – is that, whilst most people acknowledge the need for business acumen, and have a general feel for what it is, in terms of development it’s lumped into a category of “knowing the business” and left to grow through experience and “being curious”.
Now, if you’ve followed me long enough, you’ll know that “be curious” is one of my favourite expressions when it comes to the requirements of being a Finance business partner. So, I’m not downplaying that at all.
I think it’s unfortunate because I think we don’t think we serve very well those who aspire to Finance business partner and CFO roles if we’re not more specific.
It must be possible to break down business acumen into skills that can be both learned and practiced.
So, here’s my attempt to do just that:
All of these areas need to be understood generically first, and then applied specifically within your business.
So, basically, you first understand how businesses make money, then how my business makes money.
One other reflection I have on this area is that business acumen looks different depending where you are in the business.
So, there is a general understanding of business. But then there is where I fit into the business. Understanding and appreciating how the business works, the other thing to really grasp is what my role is in that context.
So, for Finance what business acumen looks like, ultimately, is knowing and understanding the role of Finance in business performance management. It’s how to fit into the value chain as a Finance person and performance manager (which is what a CFO is).
(For more on this topic, have a look at my short guide, How Finance Can Drive Business Performance.)
And if you have any other ideas about business acumen for Finance people, please do share them in the comments at the bottom of the page.
The third area to consider when thinking about CFO skills and Finance business partner skills is what many people call ‘soft skills’, often described as ‘behavioural’ skills.
These skills broadly relate to the way that we do things, or the way we relate to other people in our daily lives.
One of the conversations I regularly observe starts with asking why there isn’t more interest in developing these skills amongst Finance professionals.
I agree with the sentiment in that question.
In my 25-year career in accountancy and finance, I can honestly say that what I’ve learnt in this area has been more helpful, more revolutionary, more career- and life-propelling, than any technical area. These are skills that not only help you at work, but will help you in every area of life, in marriage and relationships and friendships.
And the flip side is that these skills are the ones that really give you what you need in the CFO role. Talita Ferreira, former CFO and mentor of numerous CFOs and senior Finance professionals, commented recently, “The issue ... is that when [they] get to a senior level and they don't have these skills, they get told they don't have enough gravitas/impact or they are not good at building cross-functional relationship and influence.”
My own contribution in the debate over why Finance professionals don’t realise the power of these skills is that there are two reasons, both of which I want to address briefly here.
Firstly, senior Finance managers and CFOs don’t believe they have anything to learn. They are often so ingrained as accountants, so left-brained, so analytical, that they see everything in terms of technical ‘how to’ knowledge. So, no one tells the Finance business partners to go and develop those skills.
That is changing. A whole bunch of great people are stressing the importance of these skills nowadays. Just listen to the Strength in the Numbers Show with Andrew Codd some time, and hear experienced Finance people time after time talking about this kind of thing.
It isn’t helped by the second reason, which is that calling them ‘soft’ skills makes it sound like they’re wishy washy, nice-to-have, optional things that people can’t really teach you.
But, as with business acumen, that’s not really true. I have this fundamental belief that if something can be done, it can also be done well. If it can be done well, it can be done better. And if it can be done better, then there must be ways of learning to do it better.
So, let’s just list some of the main skills we’re talking about:
We haven’t the space to go into detail about any of these, but doing all of them well will make an enormous difference to your ability as a Chief Financial Officer and as a Finance business partner.
And if you have any others to add to the list, or any comments on the above, please do comment below.
So, I hope that you’ve now got a much clearer idea what skills you can develop to build your career as a Finance business partner or CFO. Hopefully, this has got you thinking.
Well, keep thinking! And have a look at the other material listed below, especially the How Finance Can Drive Business Performance white paper and the CFO Career Action Plan Workbook.
And... if you have the ambition or goal to be a CFO or Finance Director one day, here’s an opportunity to get yourself ‘CFO-ready’.
CFO Readiness Builder is a six-month development journey, involving online training, coaching, homework and group work, with the support to go with it. The aim is to actually get you CFO-ready, and not just teach you about it.
Andy Burrows is a popular writer and speaker on a wide range of topics in Business Finance and Accounting. He provides online training and coaching, so that business-focused Finance professionals can grow in impact and business leadership.
He was named as one of the top voices on LinkedIn in 2019 in Finance, Accounting and FP&A.
Qualified as a chartered accountant, Andy has worked in many senior Finance roles over the last 20 years, including Finance Director at one stage, across many different sectors in a variety of companies.
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