Effective CFOs Don’t Try to ‘Do Everything Better’

CFOs at large enterprises are underinvested in key activities and spend about one day per week on the wrong activities, according to Gartner.

To ascertain what the most effective CFOs do differently with their time, relationships, and teams, Gartner conducted more than 100 interviews with finance chiefs and assessed personal performance and effectiveness across 231 attributes.

“CFOs are under pressure to elevate performance across a range of job responsibilities, but our research shows that attempting to ‘do everything better’ is not the answer to driving better personal effectiveness,” said Johanna Robinson, managing vice president in Gartner’s finance practice.

The two most critical levers, she noted, are how CFOs manage their posture and relationships within the organization; and which activities they prioritize through the intentional allocation of their time.

The research found that just 22% of CFOs were personally effective. Personal effectiveness scores were based on how well a CFO’s organization aligned to what Gartner calls “efficient growth” behaviors.

Such behaviors are characterized by how willing key stakeholders and the finance team are to take risks to support long-term growth, and the CFO’s performance against CEO expectations.

Survey data revealed a significant under-investment of time in such key activities as customer engagement and corporate strategy, as well as a desire to reallocate a full day per week to different priorities.

Three Keys to Drive CFO Personal Effectiveness

Gartner’s research identified three key areas that are responsible for driving personal effectiveness among CFOs. The personally effective CFO:

1. Acts as a strategic partner to the CEO and board: Personally effective CFOs constructively challenge their CEOs to achieve better decision-making outcomes. Also, finance chiefs are open to playing many different roles within the organization, frequently stepping into previously unknown business areas.
2. Exhibits a strong customer orientation: CFOs who rate highly in personal effectiveness spend more time with customers than their peers and actively seek to allocate more time to this responsibility. A strong customer focus means that personally effective CFOs prioritize their relationships with heads of sales while proactively owning pricing strategy.
3. Stays connected to business performance: Time spent within the finance department was not a significant driver of personal effectiveness. Instead, the most personally effective CFOs spent more time plugged into the performance of business units. This was demonstrated through having business-unit CFOs as direct reports, strong relationships with all business-unit general managers, and a willingness to own business unit performance-related metrics.

Action Plan for Personal Effectiveness

“While most CFOs have not yet achieved a high level of personal effectiveness, our data shows that they are at least aware of a misalignment between how their time is spent and their stated priorities,” said Robinson. “To achieve better outcomes, CFOs can replicate many common finance leadership practices in how they approach their own personal time management.”

Gartner’s research showed that personally effective CFOs followed four common practices that allowed them to focus more time and energy on the activities most impactful to their job performance. Those practices included:

• Announcing personal priorities publicly — While CFOs naturally excel at team management, personal transparency is more challenging. By announcing personal priorities to their teams and the C-suite, CFOs can leverage greater focus from their teams, while also more easily declining requests that don’t align with their priorities.
• Practicing “zero-based” scheduling — By scheduling personal priority activities first and accounting for the time of day when activities are scheduled, CFOs can preserve mental energy for their top priorities.
• Concentrating attention more often — CFOs should ensure that activities that are highly prioritized, complex, or uncertain are given protected calendar time of longer durations.
• Comparing planned and actual time allocation — Just as CFOs can learn lessons from a post-audit of a major investment or acquisition, reviewing how their time was actually spent against their plan can reveal root causes of time slippage that can be better addressed in the future through delegation.

Survey results were discussed at the recent Gartner CFO & Finance Executive Conference in Washington, D.C.