Finance no longer is just about recording and reporting performance. It's about partnering with the whole organization to mitigate risks, drive strategy, and add value. The problem: The future talent pool isn't evolving fast enough for the new demands of the role.
About 68% of U.S. CFOs said it was a challenge to find skilled candidates, according to a 2015 survey by staffing firm Robert Half, which polled 2,100 finance chiefs. Last year, 87% of U.K. CFOs said they faced challenges finding skilled talent.
So finance leaders must venture beyond the once-siloed scope of their department to become business partners critical to the success of the broader organization. That was the crux of a recent CGMA panel, "From Conformance to Performance: Developing the Finance Leaders of Tomorrow."
"The technical skill sets that we have as financial professionals are not adequate anymore," said Ash Noah, CPA, CGMA, AICPA vice president—External Relations for Management Accounting, who was one of the panelists. "So we need to go beyond that."
MASTER THE BASICS, THEN BUILD
Finance professionals must take a wider view of the business if they are to lead in the future. They need to move from being a scorekeeper to being a business partner, panelists said.
Panelists encouraged cross-training, pursuing roles outside of the finance function, and examining the company through an operational lens. If that education can't come through work experience, then academic and professional credentialing programs can help introduce young finance professionals to the concepts.
"Employees who enjoy embracing challenges, that's something that we look for," said Linda Zukauckas, CPA, CGMA, executive vice president and corporate comptroller at American Express. "We also look for employees who are focused on building partnerships, continuously improving. ... That technical aspect of it is a non-negotiable."
Industry knowledge and breadth of exposure across the organization is critical; it develops relationships and perspective—and ultimately better employees, said Robert Falzon, CPA, the CFO of Prudential Financial.
"Understand how the market looks at your company from a valuation standpoint, and that should help focus where you want to spend your time and where you want to learn and be better as an organization and as an individual," he said.
GET OUT OF YOUR COMFORT ZONE
Falzon's circuitous career path with Prudential—which included roles in investment banking, real estate investment management, and corporate finance before he rose to CFO in 2013—is proof that movement within an organization helps develop well-rounded professionals.
Prudential's finance employees—there are about 2,000 of them globally—are developed through a variety of rotating job assignments and training programs.
"Ultimately, you develop this group of professionals where they've got this broad base of experience in training, and as you're looking to plug holes or fill opportunities, you've got this great pool," Falzon said.
Be willing to take some career risks for the benefit of learning the broader business, he added. Don't focus on promotions; focus on learning experiences. Falzon himself moved from a corner-office job to a cubicle job within Prudential knowing that in the long run, the education would benefit him. "From a career progression standpoint, it was a big step back," he said. "But it was a whole new field for me.
"Sometimes you need to get in that elevator that goes down and then take it back up again."
Zukauckas added: "[When] you're looking for people that you want to plug in because you know you can count on them to deliver, they're more often than not the people who have the diverse skills who have taken some risks in their career, who have made lateral moves at the sacrifice of promotion to become a more well-rounded finance person."
HONE YOUR SOFT SKILLS
Soft skills—communication in particular—are critical if you want to advance.
"As you climb up that food chain, you rely less and less on your technical skills and more on your soft skills," Falzon said.
The ability to communicate strategy to the lowest staff member as well as the highest-ranking board member is critical. "Boil it down in a way that you're getting all the substance through in a way that is understandable," he said.
Elizabeth Pittelkow, CPA/CITP, CGMA, director of accounting and compliance at logistics software company ArrowStream, touted the value of public speaking training. Early in her career, she recognized public speaking as a weakness. But she was in a role that required her to make presentations to management about controls and financials. "It was something I was very nervous about," Pittelkow said.
So she joined a public speaking organization and has continued with it for the past 10 years. "It has given me more confidence," she said. "And it's something that set me apart from my colleagues."
MAKE THE CONNECTION BETWEEN DEVELOPMENT AND TALENT
Young finance professionals should take advantage of internal training within their organizations. And companies should devote resources to developing internal talent, panelists said. After all, development is an important retention tool for many employees. And the cost of replacing an employee can often exceed the cost of training and retaining existing employees.
"If you're not in tune to the dependency on the talent of your organization and the investment you need to make in them and the investment they need to make in themselves, I don't think long term you have a sustainable business model," Falzon said. "There needs to be that connection between the development and retention of talent and that way in which that translates into making you more sustainable in the marketplace."
And it doesn't always have to come at an enormous cost to the company. Mentoring and in-house courses may require planning time but not a lot of cash.
Pittelkow, the ArrowStream director, described an internal training program through which an employee picks a class to teach and then develops a lesson around his or her research. Pittelkow has taught courses on ethics and listening. "It keeps our cost down," she said. "... And it's great because you teach about what you're passionate for."
The full version of this article is available at cgma.org.
—By Jack Hagel, editorial director, CGMA Magazine
CGMA Magazine is published in conjunction with the Chartered Global Management Accountant designation, which was created through a partnership between the AICPA and CIMA. The magazine offers news and feature articles focused on elevating and emphasizing management accounting issues.