The Art of the CFO Relationship

A few weeks ago, I wrote an article stating that in today’s business it’s the data, not the money, that gives the most complete picture of a business. Following the money used to work, but in today’s world cloud and online services are cheap and a lot can be done without significant spend and in fact all that’s needed is the Marketing Director’s credit card! Thus, a CIO’s relevance in the business has grown and continues to grow. We typically own, manage and control access to the data and thus understand the business picture it represents.

All this puts an ever-greater demand on an IT Leader’s need to engage and build a relationship with both the CEO and the CFO particularly as we’re still the “Johnny-come-lately” to the board. And historically, CIOs and CTOs have often reported into the CFO and IT has been managed as a cost rather than an enabler and driver of growth, which makes the transition all the harder for everyone.

So, as senior IT Leaders, we need to take a lead and recognise the positive impact our new-found insight into the business provides and use it as a tool for good. However, we also need to understand the potential negative impact such a rise in relevance can have; there may well be lots of CFOs getting bent out of shape by the changing face of the business particularly with reporting lines for CIOs increasingly moving to the CEO.

As CIOs, developing our relationship with the CFO needs to be a priority and we need to provide value to them both strategically and tactically. The obvious starting point is to demonstrate clear commercial capability and demonstrate understanding of budgets, the finances and speak the CFO’s language. CIOs who are qualified accountants are few and far between but owning the IT budget and working with the CFO in a responsible way must be part of our role and will quickly develop a high trust relationship. So many people just don’t understand the basics of finance, demonstrating finance maturity goes an awful long way when it comes to CFO relationships.

CFOs also really don’t like surprises; it’s just not in their DNA. So, working closely with them on things like the risk and issue log, compliance requirements, DR & BCP and engaging them early with project costs and associated benefits will all help your CFO recognise the value of having you as a peer. Considering them a back-route to the CEO is also a good plan and I’ve had many successes by engaging with the CFO and getting their views on what the CEO might think prior to going and chatting with the CEO.

On top of that, you can help your CFO and their department by making sure their systems are integrated sooner rather than later. They are intimately aware of their costs, and they often feel the need to show other departments that they too can keep their costs down. Helping them remove inefficient process, drive effective working and automation can all help the Finance team do more with less and help improve the relationship with the CFO. At the outset I talked about following the data and here you can help the CFO too by working towards single sources of truth for data, removing manual wrangling and providing them with the ability to understand their numbers quickly and easily; a daily dashboard on the state of the business goes down a treat, so I’ve found.

Above all, we need to recognise that until recently CFOs probably saw the IT Leader as someone who was their subordinate, more interested in the boxes and wires than the commercial side of the business. That’s rapidly changing and so we need to recognise that it can be difficult for senior leaders when others are becoming peers rather than subordinates to be managed and controlled. So, in addition to providing IT-orientated support to Finance, we also need to keep our antennae up and our emotional intelligence going at full tilt to ensure we avoid unforeseen pitfalls. Our CFOs should realise that whatever they’ve lost in terms of control is more than made up for by the advantages of having us as their peer.

Fortunately for us COVID has shown everyone the criticality of IT to business success. Our understanding and knowledge of systems, processes and data throw us into the new triumvirate of power at the top. Any company not adopting this kind of strategy will be self-limiting. Time to step up, everyone!

One final note: Only the best CIOs with the right mix of commercial, strategic, leadership and EQ experience will make their way to the top table and consistently demonstrate their worth. It’s a lonely job and a lot’s changing around us right now. Having access to a cohort of similarly skilled and capable people to share the load and help make good decisions has to be a good thing. If you find the job lonely and could do with some mutual support, get in touch; we developed our Mentor Groups for CIOs and CTOs for just this reason.

If you’re lacking senior IT Leadership in your organisation and require help streamlining your business processes than a Freeman Clarke Principal can help, for more information visit our website.

If you’re a CIO or CTO looking to join a rich network of like-minded IT Leaders who collaborate and knowledge share you might be interested in our Mentor Groups.