Financial performance is important, but a survey suggests it’s less important than a good working relationship with the most senior leaders.
If less than 10 percent of CFOs see meeting the company’s financial goals as their main reason for sticking around, companies may soon need to brace for a lot of turnover in the finance department.
According to the results of a survey of more than 300 financial leaders by recruiting firm Korn Ferry, only 44 percent believe there is any kind of succession plan for their role in place today. There was also pretty wide agreement around what spells the end of a stint as CFO:
When asked why a CFO would voluntarily leave his or her position, more than half (52 per cent) of respondents said the top reason is a poor working relationship with the CEO, and 41 per cent said not working well with the board and CEO is the top reason a company would ask a CFO to leave.
This is in contrast to the meager eight percent who said “not meeting the company’s financial goals” was a career-limiting move.
“Even we were surprised,” CFO Magazine commented on the study. Of course, relationships matter. But do they really matter that much?
Tying CEO Relationships To Financial Performance
Maybe the two issues aren’t so unrelated, though. If you’re trying to make the finance department’s work more transformative and influence business strategy, conflict at the top could be considered the ultimate roadblock. When you reach a point where those battles prove insurmountable, achieving the company’s financial goals probably isn’t going to happen anyway.
When CEOs and CFOs do get along, though — perhaps through a shared respect for decision-making based on reliable data — the results can be amazing. Yes, financial goals are reached, but so much more is accomplished.
For inspiration, you might want to check out the list of winners for The Asset Triple A Treasury, Supply Chain and Risk Management Rewards 2017. Registration is required for this site, so if you’re not a subscriber here is how they describe some of the winners’ achievements:
- “Led his team of over 500 on a journey of transformation, turning finance from transactional to advisory amid challenging conditions such as declining sales, margin pressures, and lower profitability.”
- “Spearheaded the inaugural issuance of green bonds from a global automobile manufacturer, thus launching a new asset class for Chinese companies.”
- “Operating in a difficult market in Iraq, he was able to secure financing to support its projects in the country and help improve its power infrastructure.”
You’re probably not going to be able to follow in these CFOs’ footsteps if closing the books every quarter takes up too much time, or if budgeting process breaks down. It’s also unlikely without strong support from the CEO. Overcome those two challenges, and you’ll not only keep your job but make people rethink how powerful a role it can be.