Ankur Agrawal, a New York partner specializing in Strategy and Corporate Finance, and Christian Grube, a Munich partner leading in the same field, delve into how CFOs can elevate their performance midway through their tenures. They highlight the significance of strong CFO-CEO relationships and the necessity of collaboration with future leaders. The discussion also covers the evolving role of finance through technology and AI, and offers insights on strategic self-assessment for career growth, emphasizing the importance of trust and effective communication in achieving organizational success.
Mid-tenure CFOs must critically evaluate their company’s strategic direction, embracing external perspectives to drive necessary changes and ensure alignment with goals.
Successful CFOs should focus on developing future leaders by investing in mentorship and aligning talent management with the organization's current strategic vision.
Deep dives
The Importance of Mid-Tenure Reflection
Mid-tenure serves as a critical reflection point for CFOs, allowing them to assess their strategic aspirations and the company's trajectory. After two to three years in the role, it becomes an opportune moment to evaluate whether the firm is on course to meet its goals and identify areas for change. CFOs can offer valuable insights on how to recalibrate the company’s direction by adopting an external perspective, considering investor views, and analyzing competitive actions. This phase also allows CFOs to challenge existing strategies, ultimately taking on a proactive role in collaboration with the CEO.
Reinventing the Finance Function
Successful mid-tenure CFOs focus on reinventing the finance function, emphasizing the need to redefine not just their teams but the entire operational structure of finance. They often clarify the roles within their function while exploring the addition of responsibilities such as IT or procurement that may reside under their purview. Benchmarking against peers becomes essential as CFOs seek insights into how others navigate emerging issues like digital transformation and sustainability. Evaluating both input and output KPIs helps ensure their finance function is well-equipped to meet future challenges and set realistic goals.
Developing Future Leaders
A pivotal priority for mid-tenure CFOs is the commitment to developing future leaders within their organization, aligning talent management with their strategic vision. CFOs are reminded that just because someone succeeded in the past doesn’t guarantee future success; instead, they should prioritize individuals who align with their current objectives. This process often includes making tough decisions about team restructuring and opening doors for high-potential employees to gain cross-functional experience. By actively investing time in mentorship and fostering a culture of growth, CFOs can significantly enhance their team's capabilities and prepare future successors.
Expanding Leadership Beyond Finance
Mid-tenure CFOs are encouraged to expand their influence beyond traditional finance roles, taking on leadership in broader organizational initiatives. This may involve leading enterprise-wide transformations or integrations during acquisitions, showcasing their versatility and leadership abilities. Engaging in non-profit boards or community organizations can also enrich their skill set and perspective on governance, which is vital for future CEO aspirations. By stepping beyond their comfort zones, CFOs not only enhance their professional growth but also contribute to their company on a wider scale, ultimately preparing for leadership opportunities in diverse areas.
This week, we return to the CFO journey and discuss how CFOs can drive outperformance in the middle years of their tenure. We’re joined by Ankur Agrawal, a partner in our New York office, a leader in our Strategy and Corporate Finance and Healthcare practices, and the leader of our CFO and finance service line in the Americas. Christian Grube is a partner in our Munich office, leader in our Strategy and Corporate Finance practice, and the leader of our CFO and finance service line in Europe. Arun Nayar’s career in finance spans more than 40 years. He was the former Executive Vice President and Chief Financial Officer of Tyco International, the former CFO of global operations at PepsiCo, and he currently sits on the boards of GFL Environmental, Amcor, and Rite Aid.