Please enjoy this encore episode from Season 8 - Episode 64 - The CFO Mindset.
The Role of Chief Financial Officer requires a different mindset, a different world view, and a perspective that helps you see the organization differently. The CFO must be forward thinking and must never quit.
The following outline is used during the episode:
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Hi, this is Steven McLean are the finance leader podcast. This is bonus episode number 36 Season 10. The finance leader podcast will debut on April 12. With a full 10 episode season ready to grow finance and accounting leaders. I believe that no matter your role, you can be a leader in your organization. So I share the tools for you to be one. Additionally, I believe that you can use leadership to be a positive influence in everything you do. Also in the podcast, I encourage you to advance your career by having a realistic written plan, a growth mindset and by taking action to own your career. This week, I am sharing a replay from season eight, which is episode 64. The CFO mindset many of you have achieving CFO is your long term goal, and even the next step becoming CEO. This episode kicked off my CFO series from last fall. If you have not listened to those episodes, please go back and listen to season eight. You won't be disappointed if this podcast has helped you. Please leave a review so we can spread the word and also please share the podcast with any co workers and friends who may be able to benefit. Thank you. Please enjoy this encore episode, Episode 64. The CFO mindset, thank you. Mindset is everything. It determines how we view ourselves, and how we view ourselves in the world. How we see ourselves determines how we face adversity, and how we achieve our goals. The role of chief financial officer requires a different mindset, a different worldview, and a different perspective that helps you see the organization differently. The CFO must be forward thinking and must never quit. Always looking where to go the business, execute the strategy and get people excited about the brand. All while treating people with respect and dignity. Please enjoy the episode. Welcome to the finance leader podcast where leadership is bigger than the numbers. I am your host Stephen McLain. This is the podcast for developing leaders in finance and accounting. This is episode number 64. And I'll be talking about the CFO mindset. Plus, I'll briefly discuss the qualities of a C suite level executive. And I will highlight the following topics number one, the qualities of a successful C suite executive. Number two, you must pivot your skillset, mindset and perspective. Number three, embrace change and embrace adversity. Number four, you must set the right example every day to establish a high standard. And number five, you must own your career and your goal accomplishment process. author Robert Collier said, Success is the sum of small efforts repeated day in and day out. This is the debut of season eight and will be all about the role of chief financial officer we are going to explore this role over seven episodes, covering mindset how senior executives work with each other, the CFO skill set, how CFOs add value, strategic business and financial planning, technology considerations and I'll wrap up the season with the CFO pathway plus the hiring and selection process. Now with CFO being your long term goal, there's planning you need to do now. So you have the necessary skills, mindset and experience because companies are highly selective for this role. It's a long process to be hired as a CFO normally, they will examine how you think they'll examine your mindset, how well you work with others, your experience, your credentials, your understanding of business concepts, beyond finance, and accounting, and many other topics. And you need to be ready. You need to prepare now and have a plan where you are and where you need to grow. Imagine now you're a CFO, and you have to deal with a variety of situations that challenge your time and energy, for example, like hedge fund managers, or bank analysts calling you if your company is publicly traded, trying to convince you into revealing information before the public knows also, what do you do when a major supplier of yours can't ship a key component of your cash cow product? And that threatens the company's ability to meet growth expectations. Another example what is your process for finding additional lines of revenue and trying to recommend which is best for the company to develop? And this is happening while a new competitor has entered the market where your cash cow product has dominated for many years. What are your actions? What guys Do you give your team? And what do you recommend to the other senior executives, you partner with just a few examples of adversity and challenges you will be facing. I want to help you achieve CFO and I want you to be ready for it ready to overcome challenges and adversity, that will definitely come your way, ready to grow your team so they can perform at a high level, to also help you be forward thinking and consult problems. We will continue to build our foundation throughout the season, I will be bringing in concepts a few times. Throughout all the episodes it's important to get this right, because this is where you are going to CFO and even CEO. Now here's a quick intro to what a CFO is usually responsible for just as a quick review, I know that you know what a CFO does. But just as a review, let's just go over a few things. The CFO is responsible for accurate financial reporting, compliance and proper record keeping, helping to optimize operational decisions for better financial performance, analyzing risk in association with financial decisions, and safeguarding resources, and also holding leaders accountable for performance targets along with many more other responsibilities. The CFO must be forward looking especially how the company will be positioned against competitors, three to five years from now. The CFO typically leads a variety of teams that include the following number one treasury and they cover the cash management and looking at cash flow every day. This area is critical. If your cash flow is tight every month number to the accounting team led by the comptroller ensuring all transactions are correctly applied to the proper accounts following generally accepted accounting principles, and all legal requirements along with publishing monthly or quarterly financial statements. The financial planning and analysis team who are analyzing key performance metrics, performing projections, developing the budget and calculating returns on investment plus many other types of analysis around performance, often helping other departments understand their deliverables in financial terms. And often the Information Technology and Information Services team falls under the CFO, which in my opinion is a legacy idea. This is really for another episode, and we'll discuss later, but every company in the 21st century must consider themselves to be a tech company. No matter what industry they are in, the Information Systems officer must have its own seat at the table. Again, we will talk about this at another time. And I'm sure it's going to be a controversial topic. We will cover specifically in a future episode, the skill set you will need to develop for CFO but right now we need to realize that you still have much work to do on developing your potential for CFO. And what determines that is a different combination of technical and soft skills, and how you deal with adversity a crisis and also change can you lead in a crisis? Can you lead in a changing environment like a changing economy, at changing your customers needs and tastes? Or a new competitor cuts into your market? The CFO must be future looking more than ever? How can you add value and ensure the organization is on the right track? What combination of hard and soft skills will you need? It's different than what you're doing today. As you manage a team, you must transition from your current skills, mindset and perspective, you will need to change how you view the world and what skills you will need. What Got You Here Won't be the deciding factor in your rise to CFO the very skills that defines your promotion to Team Manager will not be what an executive hiring committee will be looking for. When it is time to go to that level. The quicker you understand that concept. The more time you have to transition, your perspective, your mindset, and also your skills. Now let's talk about a few key points about the CFO, mindset and qualities of a C suite executive. So we set the tone over the CFO series a number one, the qualities of a successful C suite executive the successful executive knows they are responsible and accountable for everything the organization does or fails to do. It begins and ends with you, you must become the master of the implied task because no one will be telling you what needs to be done. Because it will be the senior executives steering the ship. It will be on your shoulders to determine the right priorities and how to best use the resources of the organization. C suite executives must also lead their respective teams and partner together with the other executives and be committed to and deliver the strategy. You must continually have a strategic view of the organization. Now I want to share a basic executive focus model and I want to talk about this in terms of vision in fluence and communication now number one vision where do we want to go? And must be simple concept? What will this company do and where will it be positioned in the future, how you communicate your vision will be how you attract talent to your company who can share your passion for where you want this company to go. Number two influence. Now this is about positive influence. You want to build a team who is passionate about the brand. And you also want to connect with all the stakeholders focus on building an environment where people want to work with you and they want to contribute and be part of the team. So you must work to deliver positive outcomes and inspire people to deliver their best. And that comes from treating people with dignity and respect. There was a time when senior leaders get away with abusing their team and asking unreasonable demands and those responsible for keeping senior leaders accountable would often look the other way. As long as the organization was performing well, meaning it was accomplishing its mission and making money. This is not acceptable any longer. We want senior leaders who can build a great work environment, while accomplishing the mission. Also it can happen you can actually expect from your team for them to perform at a high standard. Without coercion and abuse. This will be the new standard and the new expectation going forward. Treat everyone with respect and dignity even those you have to let go. Because they are not a good fit. People are watching how you treat people. When you let them go, coercion and abuse will no longer be accepted, micro aggressive behavior will no longer be tolerated. Now communication, do everything you can to remove obstacles to sharing information and establishing the right priorities, communicating those right priorities with the right use of resources that your organization has. Clear communication wins the day, every day. Open communication facilitates trust. And we talked about vision, influence and communication as a basic model for senior leadership. And we're going to be talking about this more as we progress through the season and talking about CFO and also senior leadership. Now number two, you must pivot your skillset mindset and perspective. What you did as a manager will not be what you do as a CFO. It requires a different skill set. I will address CFO skill specifically in a future episode, you must shift to a strategic skill set especially in communication, problem solving, being analytical and in planning. We will talk more about skills in Episode 66 And two weeks, you must shift and develop these skills. Those of you who see yourselves as Microsoft Excel experts will have to realize that Excel skills will not help you rise above the manager level. Excel is a tactical skill, you must have a growth mindset, seeing the organization as a whole focusing on the future ready to face adversity as a CFO, you will face adversity challenges and also change, you will have to lead change, even change you may not believe in mindset is everything, you must be ready every day to inspire and to lead positive outcomes. No matter what you are dealing with personally, or in the business environment, your perspective must also change. You have to think and act in a strategic environment, you must also preserve decision space. And we will talk more about this later decision space is not allowing yourself to make a quicker decision, then you need to make a decision at the right time and don't be forced to do binary decisions. Decisions are more than just two choices. You must teach your team to look at the problem. In more than just two alternatives. You may find that hybrid decisions are more likely to be adopted, and we'll talk more about this later. Number three, you must embrace change and embrace adversity. Anyone can be a leader when things are going well. But how often does that happen? Embrace that role of crisis and change leader be ready to solve complex problems at any time. This must be adopted into your mindset. Number four, you must set the right example every day to establish a high standard people will be looking for you and one example you communicate. Do you know the difference between a work perk and having a sense of entitlement. As people get promoted, they often get confused as to what applies to them. A work perk. A specific perk of the job is a defined benefit of the role you're performing. It might be a designated parking space, or a private dining area or access to sporting event tickets and those are fine. Those are part of the role that you earned when you got into that role. And that's okay. And entitlement mentality means you believe that policies that all employees must be in compliance with don't apply to you. Do you show up to work? Are you using illegal substances? Are you taking more than your defined benefits? Are you asking your assistant to perform personal tasks? beyond the scope of their normal duties? Do you believe that policies don't apply to you? That's an entitlement mentality, and people will notice and you will lose their respect. And finally, number five, you must own your career and your goal accomplishment process. Your career pathway is what you do with it, what choices you make, and what amount of risk that you take. Do you have a growth or fixed mindset? Do you regularly update your goals? And are they written down? You will find that those who rose to the C suite had written down goals and had a detailed plan that was updated often they did their research on hiring trends, and what does it take to get promoted, you must own your career and not wait on other people to give you something, go get it, get on opportunities that will propel you forward. Now, your personal character follows you everywhere. setting the example and being a leader that people want to follow are key to being a successful executive. It's not just about getting your way. It's about being someone of strong character who treats people with dignity and respect. It is possible to command respect and get things done without being a monster. I don't know why it's so difficult for some people. It's often bias and narcissism and how one feels entitled. And it may be because they had a poor example, to follow as they were working through the ranks. Now for action. Today, I want to ask you a few questions. How do you view your actual progression from individual contributor to Team Manager to director and VP on to CFO? Do you realize that you must grow and pivot your mindset, your skill set and your perspective at each level? How you manage your team today will not necessarily help you get hired as a CFO, he must demonstrate the ability to think strategically and to partner with the other senior executives to solve complex problems. Partnership is key. That's what they will be looking for. Can you work well with others to deliver the strategy? This is why I'm asking you to reflect on your personal growth philosophy. Those with a realistic growth mindset focus on pivoting at every level, what is your mindset? And how do you envision yourself making the transition from the tactical perspective to the strategic at each level on your way to CFO now today I talked about the CFO, mindset and qualities of a C suite executive and highlighted the following points. Number one, the qualities of the successful C suite executive number two, you must pivot your skill set mindset and perspective. Number three, embrace change and embrace adversity. Number four, you must set the right example every day to establish a high standard, and five you must own your career and your goal accomplishment process. Your mindset determines how you view yourself and how you address accomplishing your goals. The CFL mindset requires you to see the world differently. You must see the organization as a whole instead of by its parts. You must focus on the future. You must perform your duties through a strategic lens and you must be able to overcome challenges and adversity. You will face challenges for sure, but your mindset will determine how you react to it. And I will continually challenge you to treat your team members with dignity and respect. The era of using coercion, being selfish and being entitled is over. Next week I will be talking about the C suite dynamic and how senior executives work together in a strategic environment. Please join my Facebook group called the finance leader podcast community. This is a place where we can help each other to grow and be prepared for the next step in our careers as finance and accounting professionals. So please join. The link is in the show notes for this episode on the app you're listening to. I hope you enjoyed the finance leader podcast. I am dedicated to helping you grow your leadership skills to change your mindset and to clarify your goals so you achieve the role of chief financial officer. You can find this episode wherever you listen to podcasts. Until next time, you can check out more resources at finance leader academy.com You can sign up for my weekly updates and see you don't miss an episode. And now go lead your team. And I'll see you next time. Thank you