Ep. 107: Clive Webb - The Skills for the CFO of the Future
Clive Webb, Senior Insights Manager at ACCA, Qualified Chartered Accountant with global experience, joins Count Me In to talk about how the role of the CFO has evolved and what skills are needed to adapt and thrive in the position. He is currently working for ACCA on a number of research projects including role of Accounting Technicians and use of robotics and artificial intelligence in accounting and finance. This episode focuses more on evolving skills and explains how aspiring CFOs can develop them. Download and listen now!
Contact Clive Webb: https://www.linkedin.com/in/clive-webb/
ACCA and IMA "The CFO of the Future": https://www.imanet.org/insights-and-trends/business-leadership-and-ethics/the-changing-role-of-the-cfo
FULL EPISODE TRANSCRIPT:
Mitch: (00:00)
Welcome to Count Me In IMA's podcast about all things affecting the accounting and finance world. I'm your host Mitch Roshong and I'm here to kick off episode 107 of our series. The role of the CFO has evolved and in turn the skills required of aspiring CFOs have changed too. In this episode, Clive Webb Senior Insights Manager at ACCA shares his perspective on what today's CFO is responsible for, what skills are needed, how the pandemic impacted the role and the best ways to prepare for becoming a CFO. Keep listening as we transition over to the conversation now.
Adam: (00:46)
So Clive, how was the role of the CFO changing.?
Clive: (00:49)
Well,Adam. I think that's actually quite an interesting question its is, right. I think for a lot of CFOs, the role it is broadening, perhaps you could even say dramatically broadening, and its focus and how it is perceived are changing quite substantially. And what I mean by that is that certainly from the research work that IMA and ACCA did together, we felt that the role of the CFO was either increasing or significantly increasing. And in our survey about 72% of the respondents felt that the role was broadening out, and I'll talk about that in a second. But actually quite crucially, and one of the things that was quite strong in the report, we also asked a small selection of CEO's their perception. And if you asked the same question to them, you've got about 82%. So one of the things that we repeatedly saw through the report was if you're going to demand and supply side difference between the CEOs, who really expected the CFO's to go even further than perhaps they thought that they were going, and I think that broadening of the role is characterized by a broader set of stakeholders, a broader set of capitals, a broader set of responsibilities that all fall within the CFO's domain.
Adam: (02:30)
That makes sense, so then what do you consider to be included in the role CFO?
Clive: (02:36)
So I think the heart of the role remains the traditional financial acumen and financial skill. And as one of the interviewees put it, if the CFO doesn't get that right, then that's the end of that CFO, you know. So that stewardship, guardianship, asset safeguarding, traditional finance, recording, acumen, all those sorts of things, risk management, internal control, they are at the heart of the role.and very much still at the heart of the role. However, the CFO, I think you can counter itin two ways. Now the first of which is thou the, the right hand, the conscience of the CEO. So where the CEO particularly is looking more towards, sales, towards business growth, towards strategic opportunities, the CFO, yes is looking towards those, but also is the voice of dare I say, sanity. The voice of check the constructive right hand in that process. So not only do you need a view of the financial capital, the liquidity, the organization, which we've seen through the pandemic, it is absolutely vitally important. But if we think broader, it is a role that now embraces strategy. It still has that risk and control side, but that risk and control side itself is changing. And technology and data are playing fundamental parts. A lot of CFOs increasingly talk about scenario modeling and growth optimization as the future, and to do that, you need good technology and that good technology has to be embedded in data and that data has to align to the business strategy. They are therefore leaders in the organization, and as we've seen supply chains become increasingly challenge due to the pandemic they need to be on top of that agenda and also the customer centric agenda as well. And any of these broaden out into broader sense of what your stakeholders may be, how you think about the different capitals if you use the Integrated Reporting Councils Framework of six capitals. A lot of our interviewees thought the CFO increasingly needs to take view and manage stakeholder relationships at senior level across all of those capitals. So your investors are different. You are the ultimate consultant in business sense, and you've got to have a mind of transactions, M&A, growth or divestiture, which, you know, the pandemic is going to place, an increasing focus on as well. So that's what I mean, it's a very much a broader role.
Adam: (05:52)
Yeah, it's definitely a lot broader and you've briefly mentioned the pandemic and we're still in this pandemic and for the foreseeable future and the vaccines and all those things put aside, how has the pandemic impacted the role of the CFO?
Clive: (06:06)
I'll go back to a couple of comments, I think from some of our interviewees, and one of them who actually was a CEO, but a former CFO of a finance institution said, yeah, the role of the CFO has been tested by the pandemic, and it's the reliance on the CFO. That's going to become more important to give those perspectives, to give that ability to see further, and it's becoming an agile role is another one put it that there's no place for perfectionism, but there is a place for being able to be agile and to drive the business forward with a sense of confidence and, and therefore understanding the various leavers that are pulled. So in those two contexts, I think what we're seeing and back to my point about the right hand of the CEO is the CFO increases become a very important role in helping organizations understand what the art of the possible is, what the various scenarios that may play out will lead to, and therefore how basically the organization can survive. And I think the pandemic has reinforced the role of the CFO in very much making that happen.
Adam: (07:33)
In the report, there's a six hypotheses and do these six hypotheses, illustrate the changes happening now for many CFOs?
Clive: (07:43)
Yeah. But that's right. I think it's probably worth me just explaining quickly for the benefit of those listening, that what those hypotheses were, and some of them I've touched on already. The first is that the CFO role broadens out purely from the financial investor and stakeholder management into a broader sense. So keeping that safeguards in reporting, but broadening out what that stakeholder focus actually is. And that the CFO therefore has to have a leading responsibility for business strategy, formulation and validation and its execution, and to do that in the third hypothesis, it becomes around, shifting from a cost centric view to a grow centric view, and I know at the moment that may seem a challenge, but in reality, I think more organizations increasingly focusing on the three P's and that growth becomes a more clear agenda, and to do that, there's a wider view of performance, and this is where those sits capitals come back in. And it therefore is a role that is looking forward, and that underpins, I think that scenario modeling that I've talked about, and it becomes a role that is about forward insight, and I think the pandemic has very much reinforced that. In ourI last hypothesis and perhaps the most interesting one, became about career progression and whether the CFO was a step towards the CEO role. And the reason I say that's interesting is on a global level, when you looked to the results and we asked several respondents to give us insight into this. The majority of the early ones were yes, sort of being achieved or went on the road to being achieved. You come to career progression, you start see a fairly sharp geographic difference. And in the Asian economies, very much the CFOs is the CEO in waiting, and there is a clear set path. In the UK and in Ireland, and some in the US, the CFO role is very distinct from the CEO and some of our round table participants sort of said, well, actually, the CEO is, is too sales focus is too dynamic, and I'm a more conservative individual. So you see a difference opening up between career ambitions between sort of developed and other economies, if I can put it that way.
Adam: (10:22)
So we've talked a bit about, you know, how the role is changing and how the pandemic has impacted the roles. So let's shift a little bit, can we talk about what, what skills does a CFO need and an inspiring CFO need to develop?
Clive: (10:37)
I get back to the sort of nine areas I outlined a few minutes ago, but I think fundamentally from those understanding data on understanding technology are absolutely fundamental. And that probably is as fundamental now to successful organizations as that financial acumen and financial stewardship piece is. So if you align that to the strategy that becoming increasingly a more operational focus role, and I think that particularly in smaller entities, that is absolutely fundamental, because the CFO is the, the super connector, if you like, and being the super connector is, a role that requires leadership across the organization, but a role that requires leadership across the communities as well. So it's the ability to tell story, to give the message, to understand the message to see the future. So there's a very strong interpersonal skillset. There is a a very strong, perhaps what I might term quiz or consulting skillset, and then you have the financial, the technology and the risk scale sense. And I think those are the fundamental bits.
Adam: (11:55)
You have, the fundamental ones are there, other skills that are needed beyond the traditional skills to, as the, you know, the future of the CFO continues to develop as in the constantly changing environment.
Clive: (12:07)
I think probably we will say this continuous evolution, transformation and change, and they need to be ultimate change leaders in organizations and as increasing, I think, and this is probably also from what we gather a result in parts of the pandemic, back office functions becoming more centralized, more coalesced with finance very much at the core of that. It is leadership across that, but it is also how this ever constant change cycle, digital transformation, agility, whatever phrases you want to call it by, that sense of constant change and leadership in the time of constant change and reassuring the teams and bring their teams with them as part of that change is an absolutely fundamental skill set and now needs to be developed.
Adam: (13:03)
So what's the best way to develop these skills?
Clive: (13:07)
That, that itself is an interesting question, and I go back to the, sort of the survey results and only about 25% of the CFO's and other respondents thought enough attention was being paid to developing these skills, but I think a lot of our round table participants characterized it in two ways, obviously that there is the core financial qualification, and that is absolutely fundamental and vital. I think, as this role becomes increasingly growth centric and scenario centric that financial acumen is fundamental. So the qualification is a bedrock, and one of our round table participants then added to that statement that actually on what an MBA taught them to do was remember what they've forgotten about their accounts see qualification, and they should learn how to reapply it, if you like, which I thought was interesting comment. I think a lot of it is actually about on the job learning. And a lot of our CFOs talked about the need to make sure that they develop the next generation and mentored and coached. And quite a few of them talked about, you know, as their own careers progressed, the need to leave behind one or two viable options in an organization who will be prepared to succeed them. So I think continuous learning, mentoring the role of peer to peer networks, being involved in CFOs communities, they're all very, very important grounds to learn the skills. Yes, the bits of technology you can learn micro qualifications in some areas absolutely important, but it is being coached and developed in that skillset. And rather interesting where we ask people where they thought the next CFO was going to start coming from the most important experience that they need to have in their CV, If you like, is that a real finance business partner and that traditional path, perhaps a being from, you know, a senior manager or a director in one of the big four firms, and then swapping over to be a CFO, that path seems to have slightly closed down. And there's more emphasis on in-house experience, but broader experience such as a finance business partner role and such as working in the business in other areas is important. the other contents I would add to that is another theme from the report, which talked about the concept of a world view and the sense that yes, you need to know your industry, but more importantly, you need to know the world in which your industry exists. So therefore industry specialization is not necessarily fundamental to develop in skills. What is fundamentally is to have a view of where the organization is set in the greater economic ecosystem, if you like.
Adam: (16:26)
Well, Clive I thank you so much for sharing your insights with us today on the podcast.
Clive: (16:31)
It's my pleasure. Thank you, Adam, for giving me the opportunity and yeah, there's a lot more in the report, so please go and read it.
Adam: (16:39)
Yeah. And to our listeners, just check out the show notes we'll have the link to her directly to the report that Clive is mentioning.
Closing: (16:48)
This has been Count Me In IMA's podcast, providing you with the latest perspectives of thought leaders from the accounting and finance profession. If you like, what you heard, and you'd like to be counted in for more relevant accounting and finance education, visit IMA's website at www.imanet.org.
ACCA and IMA "The CFO of the Future": https://www.imanet.org/insights-and-trends/business-leadership-and-ethics/the-changing-role-of-the-cfo
FULL EPISODE TRANSCRIPT:
Mitch: (00:00)
Welcome to Count Me In IMA's podcast about all things affecting the accounting and finance world. I'm your host Mitch Roshong and I'm here to kick off episode 107 of our series. The role of the CFO has evolved and in turn the skills required of aspiring CFOs have changed too. In this episode, Clive Webb Senior Insights Manager at ACCA shares his perspective on what today's CFO is responsible for, what skills are needed, how the pandemic impacted the role and the best ways to prepare for becoming a CFO. Keep listening as we transition over to the conversation now.
Adam: (00:46)
So Clive, how was the role of the CFO changing.?
Clive: (00:49)
Well,Adam. I think that's actually quite an interesting question its is, right. I think for a lot of CFOs, the role it is broadening, perhaps you could even say dramatically broadening, and its focus and how it is perceived are changing quite substantially. And what I mean by that is that certainly from the research work that IMA and ACCA did together, we felt that the role of the CFO was either increasing or significantly increasing. And in our survey about 72% of the respondents felt that the role was broadening out, and I'll talk about that in a second. But actually quite crucially, and one of the things that was quite strong in the report, we also asked a small selection of CEO's their perception. And if you asked the same question to them, you've got about 82%. So one of the things that we repeatedly saw through the report was if you're going to demand and supply side difference between the CEOs, who really expected the CFO's to go even further than perhaps they thought that they were going, and I think that broadening of the role is characterized by a broader set of stakeholders, a broader set of capitals, a broader set of responsibilities that all fall within the CFO's domain.
Adam: (02:30)
That makes sense, so then what do you consider to be included in the role CFO?
Clive: (02:36)
So I think the heart of the role remains the traditional financial acumen and financial skill. And as one of the interviewees put it, if the CFO doesn't get that right, then that's the end of that CFO, you know. So that stewardship, guardianship, asset safeguarding, traditional finance, recording, acumen, all those sorts of things, risk management, internal control, they are at the heart of the role.and very much still at the heart of the role. However, the CFO, I think you can counter itin two ways. Now the first of which is thou the, the right hand, the conscience of the CEO. So where the CEO particularly is looking more towards, sales, towards business growth, towards strategic opportunities, the CFO, yes is looking towards those, but also is the voice of dare I say, sanity. The voice of check the constructive right hand in that process. So not only do you need a view of the financial capital, the liquidity, the organization, which we've seen through the pandemic, it is absolutely vitally important. But if we think broader, it is a role that now embraces strategy. It still has that risk and control side, but that risk and control side itself is changing. And technology and data are playing fundamental parts. A lot of CFOs increasingly talk about scenario modeling and growth optimization as the future, and to do that, you need good technology and that good technology has to be embedded in data and that data has to align to the business strategy. They are therefore leaders in the organization, and as we've seen supply chains become increasingly challenge due to the pandemic they need to be on top of that agenda and also the customer centric agenda as well. And any of these broaden out into broader sense of what your stakeholders may be, how you think about the different capitals if you use the Integrated Reporting Councils Framework of six capitals. A lot of our interviewees thought the CFO increasingly needs to take view and manage stakeholder relationships at senior level across all of those capitals. So your investors are different. You are the ultimate consultant in business sense, and you've got to have a mind of transactions, M&A, growth or divestiture, which, you know, the pandemic is going to place, an increasing focus on as well. So that's what I mean, it's a very much a broader role.
Adam: (05:52)
Yeah, it's definitely a lot broader and you've briefly mentioned the pandemic and we're still in this pandemic and for the foreseeable future and the vaccines and all those things put aside, how has the pandemic impacted the role of the CFO?
Clive: (06:06)
I'll go back to a couple of comments, I think from some of our interviewees, and one of them who actually was a CEO, but a former CFO of a finance institution said, yeah, the role of the CFO has been tested by the pandemic, and it's the reliance on the CFO. That's going to become more important to give those perspectives, to give that ability to see further, and it's becoming an agile role is another one put it that there's no place for perfectionism, but there is a place for being able to be agile and to drive the business forward with a sense of confidence and, and therefore understanding the various leavers that are pulled. So in those two contexts, I think what we're seeing and back to my point about the right hand of the CEO is the CFO increases become a very important role in helping organizations understand what the art of the possible is, what the various scenarios that may play out will lead to, and therefore how basically the organization can survive. And I think the pandemic has reinforced the role of the CFO in very much making that happen.
Adam: (07:33)
In the report, there's a six hypotheses and do these six hypotheses, illustrate the changes happening now for many CFOs?
Clive: (07:43)
Yeah. But that's right. I think it's probably worth me just explaining quickly for the benefit of those listening, that what those hypotheses were, and some of them I've touched on already. The first is that the CFO role broadens out purely from the financial investor and stakeholder management into a broader sense. So keeping that safeguards in reporting, but broadening out what that stakeholder focus actually is. And that the CFO therefore has to have a leading responsibility for business strategy, formulation and validation and its execution, and to do that in the third hypothesis, it becomes around, shifting from a cost centric view to a grow centric view, and I know at the moment that may seem a challenge, but in reality, I think more organizations increasingly focusing on the three P's and that growth becomes a more clear agenda, and to do that, there's a wider view of performance, and this is where those sits capitals come back in. And it therefore is a role that is looking forward, and that underpins, I think that scenario modeling that I've talked about, and it becomes a role that is about forward insight, and I think the pandemic has very much reinforced that. In ourI last hypothesis and perhaps the most interesting one, became about career progression and whether the CFO was a step towards the CEO role. And the reason I say that's interesting is on a global level, when you looked to the results and we asked several respondents to give us insight into this. The majority of the early ones were yes, sort of being achieved or went on the road to being achieved. You come to career progression, you start see a fairly sharp geographic difference. And in the Asian economies, very much the CFOs is the CEO in waiting, and there is a clear set path. In the UK and in Ireland, and some in the US, the CFO role is very distinct from the CEO and some of our round table participants sort of said, well, actually, the CEO is, is too sales focus is too dynamic, and I'm a more conservative individual. So you see a difference opening up between career ambitions between sort of developed and other economies, if I can put it that way.
Adam: (10:22)
So we've talked a bit about, you know, how the role is changing and how the pandemic has impacted the roles. So let's shift a little bit, can we talk about what, what skills does a CFO need and an inspiring CFO need to develop?
Clive: (10:37)
I get back to the sort of nine areas I outlined a few minutes ago, but I think fundamentally from those understanding data on understanding technology are absolutely fundamental. And that probably is as fundamental now to successful organizations as that financial acumen and financial stewardship piece is. So if you align that to the strategy that becoming increasingly a more operational focus role, and I think that particularly in smaller entities, that is absolutely fundamental, because the CFO is the, the super connector, if you like, and being the super connector is, a role that requires leadership across the organization, but a role that requires leadership across the communities as well. So it's the ability to tell story, to give the message, to understand the message to see the future. So there's a very strong interpersonal skillset. There is a a very strong, perhaps what I might term quiz or consulting skillset, and then you have the financial, the technology and the risk scale sense. And I think those are the fundamental bits.
Adam: (11:55)
You have, the fundamental ones are there, other skills that are needed beyond the traditional skills to, as the, you know, the future of the CFO continues to develop as in the constantly changing environment.
Clive: (12:07)
I think probably we will say this continuous evolution, transformation and change, and they need to be ultimate change leaders in organizations and as increasing, I think, and this is probably also from what we gather a result in parts of the pandemic, back office functions becoming more centralized, more coalesced with finance very much at the core of that. It is leadership across that, but it is also how this ever constant change cycle, digital transformation, agility, whatever phrases you want to call it by, that sense of constant change and leadership in the time of constant change and reassuring the teams and bring their teams with them as part of that change is an absolutely fundamental skill set and now needs to be developed.
Adam: (13:03)
So what's the best way to develop these skills?
Clive: (13:07)
That, that itself is an interesting question, and I go back to the, sort of the survey results and only about 25% of the CFO's and other respondents thought enough attention was being paid to developing these skills, but I think a lot of our round table participants characterized it in two ways, obviously that there is the core financial qualification, and that is absolutely fundamental and vital. I think, as this role becomes increasingly growth centric and scenario centric that financial acumen is fundamental. So the qualification is a bedrock, and one of our round table participants then added to that statement that actually on what an MBA taught them to do was remember what they've forgotten about their accounts see qualification, and they should learn how to reapply it, if you like, which I thought was interesting comment. I think a lot of it is actually about on the job learning. And a lot of our CFOs talked about the need to make sure that they develop the next generation and mentored and coached. And quite a few of them talked about, you know, as their own careers progressed, the need to leave behind one or two viable options in an organization who will be prepared to succeed them. So I think continuous learning, mentoring the role of peer to peer networks, being involved in CFOs communities, they're all very, very important grounds to learn the skills. Yes, the bits of technology you can learn micro qualifications in some areas absolutely important, but it is being coached and developed in that skillset. And rather interesting where we ask people where they thought the next CFO was going to start coming from the most important experience that they need to have in their CV, If you like, is that a real finance business partner and that traditional path, perhaps a being from, you know, a senior manager or a director in one of the big four firms, and then swapping over to be a CFO, that path seems to have slightly closed down. And there's more emphasis on in-house experience, but broader experience such as a finance business partner role and such as working in the business in other areas is important. the other contents I would add to that is another theme from the report, which talked about the concept of a world view and the sense that yes, you need to know your industry, but more importantly, you need to know the world in which your industry exists. So therefore industry specialization is not necessarily fundamental to develop in skills. What is fundamentally is to have a view of where the organization is set in the greater economic ecosystem, if you like.
Adam: (16:26)
Well, Clive I thank you so much for sharing your insights with us today on the podcast.
Clive: (16:31)
It's my pleasure. Thank you, Adam, for giving me the opportunity and yeah, there's a lot more in the report, so please go and read it.
Adam: (16:39)
Yeah. And to our listeners, just check out the show notes we'll have the link to her directly to the report that Clive is mentioning.
Closing: (16:48)
This has been Count Me In IMA's podcast, providing you with the latest perspectives of thought leaders from the accounting and finance profession. If you like, what you heard, and you'd like to be counted in for more relevant accounting and finance education, visit IMA's website at www.imanet.org.
