Soft skills weigh heavily on CFOs’ minds
Source: CGMA Magazine
CFOs have plenty to worry about these days: Cyber-security is one nagging issue. The growth and complexity of regulation is another. That’s in addition to the regular pressures associated with making their organisations more efficient and profitable.
But the one issue that keeps popping up more than ever is talent, according to Nick Araco, the CEO of the CFO Alliance. Specifically, finance chiefs are trying to address aligning workers with organisational culture and goals and to keep those workers engaged.
“It’s all about their people,” said Araco, whose member organisation holds round-table discussions around the US, including this week in Denver, the site of the AICPA CFO Conference.
Araco spoke before the conference about the mindset of the CFO Alliance’s members. “Most of the dialogue we’re having is going back to talent, regardless of whether we’re talking about strategy, or capital structures, or regulatory environments, the people side pops into every conversation.”
Companies are understanding the connection between strong customer relationships and employees who are aligned and engaged, Araco said. CFOs feel comfortable with the economic environment but also ready for unexpected change. The alliance’s members say that having a strong team in place will help them compete or separate themselves from the pack, Araco said.
CFOs also are seeing the need to be more visible with staff. In a recent survey of 605 CFO Alliance members, 95% believed that culture had an effect on the company’s bottom line. However, 42% said that CEOs didn’t spend enough time focused on culture, “which means someone has to,” Araco said.
“This is not about the framework and culture of the [finance] department,” he said. “This is about the impact the CFO can have in accelerating the efforts among fellow C-suite members to up their game as it relates to creating engagement in their employee base. Or they’re taking it upon themselves. Many of them are being catalysts in this effort.”
Some examples of CFOs’ attempts to develop culture are simple, including sending a company-wide email inviting workers to meet the CFO for lunch and one CFO who demonstrated an open-door policy by removing the office door from its hinges.
Araco said the emphasis on building culture – the “softer” issues that many companies seem to have a hard time mastering – is an approach that few CFOs took five to ten years ago. “I don’t think it was being recognised as a key component of how a CFO could impact the performance of the company,” Araco said. “I think there may have been a bit of a roll of the eyes when you talked about these issues.”
Building employee engagement is more than just offering pay rises or perks, although that is one strategy for keeping workers. Seventy per cent of companies say they will increase spending on employee wages and benefits, according to the CFO Alliance’s survey. Still, CFOs aren’t sure that will be enough, as 66% were either concerned or greatly concerned about talent acquisition and retention.
Technology. Continued uneasiness exists about “the impact of technology, both in terms of opportunity and issues around information governance and risk.”
Succession. Especially among private, middle-market companies, many owners or majority shareholders are getting older, “so you have questions about not just succession of roles but succession of companies,” Araco said. Companies are keeping their ear to the pavement about possible deals. “The longer they see a sustained pattern of positive performance, the more likely it becomes that the knocks on the door will occur or the opportunity to go knock on a door will occur,” he said.
Regulation. Araco said frustration exists on the regulatory front. “The environment that everyone is operating in is going to become increasingly complex and more of a spotlight on making sure the framework and rigour that they have to operate under in financial reporting and analysis is done within the confines of existing and future structures. So there’s always this pressure as it relates to the regulatory environment.”
“Companies Aware of, but Not Acting On, Need to Alter Engagement Strategies”: Most companies are aware of the need to focus more on employee engagement, but few say they are doing enough to adapt to coming changes.
“Workers, Managers Differ on Effectiveness of Employee Recognition”: Many managers think their companies do a good job recognising employees for their efforts, but employees don’t see it the same way. A new report shows the divide between management and staff, and it offers tips for bolstering recognition practices.
—Neil Amato (firstname.lastname@example.org) is a CGMA Magazine senior editor.