At a recent Institute of Management Accountants conference, Rich Beyer, chairman and CEO of Freescale Semiconductor, gave a presentation titled, “Financial Executives as True Business Partners.” The topic is not new to CFOs. But what made the presentation beyond the norm was its focus on the relationship between operational and financial-team members and how the latter should provide counsel and direction to the former.

Beyer described how, as he progressed through the ranks to his current positions, finance staffs contributed significantly to his success. It was a perspective not often shared with finance professionals and one that offered insight as to how CFOs can work more effectively with their CEOs.

In fact, the message has great applicability throughout the CFO organization. Beyer stated that finance folks often give too much credibility to their operational counterparts, assuming they know more about accounting and finance than they actually do. He suggested we challenge them in a respectful manner, make sure they understand the relevant financial aspects of their positions, and offer suggestions beyond the numbers.

Hip Huggers
In addition to educating nonfinancial individuals on business metrics, financial reports, and their linkage to strategy, Beyer actually suggested that financial leaders advise their CEOs about personal weaknesses, blind spots, and insensitivities. Because the CEO and CFO are “joined at the hip,” the finance chief can add value by being candid with insights in those areas. Even if the counsel is not readily accepted, the CFO should persevere, Beyer insisted.

Those comments caused me to pause and reflect on the relationships I had with CEOs and other nonfinancial colleagues during my career. I experienced the good, the bad, and the ugly when attempting to offer counsel to and, in fact, mentor some people. Mentoring peers, not to mention those above you, can be daunting, but finance leaders should not shy from it. Just keep in mind that to avoid embarrassment and allow for open discussion, sharing such insights is usually best done one-on-one.

You may know the story of The Emperor’s New Clothes, in which an emperor is sold clothes that are actually invisible, only to be exposed in public by a small, vocal child during a parade. As CFOs, we cannot allow that to happen to our CEOs. The consequences of not providing timely insight can be terminal for an organization and all involved.

I can reflect to numerous times when I provided insight that a CEO didn’t have readily available. The good CEOs considered the input and made their decisions taking into account the knowledge I provided. They didn’t always make the decision I would have made, but I respected them for that. They also respected me for providing the information, appreciating that I thought enough of them to share difficult news, especially nonfinancial information. Good leaders, financial or otherwise, welcome such insights.

The Ugly Truth
I’ve also had some uglier experiences. One time I sought to review some forecast information with the CEO before forwarding it to our parent company’s headquarters. I had always done that as a matter of course. But on this occasion the information was not in line with the CEO’s expectations, which were being driven by business-unit managers. They didn’t want to tell him the bad news, and he didn’t want to accept it from me.

What was I to do? I didn’t want to send the forecast numbers in without saying he had seen them. So I waited until he went into the men’s room, and I went in and held the numbers in front of him while he was preoccupied at the urinal. Of course, he was flabbergasted. I simply said, “There. You have now seen the numbers. I will now send them in. If you want to know what the numbers mean, come to my office after you wash your hands.” That is a true story.

Not that I am necessarily recommending such an approach, but it sometimes does take some risk and ingenuity to get the job done. At a later date, as he was leaving the company, he said to me, “I still don’t like your numbers, but your numbers are true. My managers never wanted to tell me the truth. You are a good man.”

The Bottom Line
Finance and accounting are not just numbers games, and financial leadership goes beyond business partnering. CFOs who are good business partners can become good financial leaders as well by offering sound advice and speaking the “naked truth” to their CEO. Others in the finance department can do the same with their nonfinancial counterparts. And if we learn early enough in our careers to go beyond the numbers and encourage that behavior throughout the financial organization, we can become even better business partners.

Maybe you are uncertain how your CEO would view this approach. Why not forward a copy of this article and ask what he or she thinks? It might just be the opening you need. Meanwhile, if you have questions or comments, please note them in the comment section below, along with any experiences you would like to share.

Contributor Bud Kulesza, CMA, CFM, is dean emeritus of the IMA Leadership Academy and former chairman of the IMA. He is also the former chairman of ITT Industries Canada and CFO of ITT Automotive, a multibillion-dollar company. For more about Bud, visit www.Budkulesza.com.