Leading Through Strategy CFO Series
Michael Porter, a strategy thought leader, describes strategy as being about choices and what an organization decides it will do and what it won’t.
Porter’s use of the words “choices” and “decides” could not better highlight the nature of the CFO’s role in strategy. Since every element of the strategic life cycle from formulation to readiness, execution, monitoring and adapting requires meaningful involvement by CFOs so the organization is guided thoughtfully in making its strategic choices and decisions.
In addition to the significance of the role, the strategic planning process provides a rich personal development opportunity for CFOs. Opportunities include broadening ones understanding of the business, building relationships, such as, with the Board and even positioning for the CEO suite.
But, the critical ‘bets” required when developing a strategy leaves little room for error and much potential career risk. And, in working with CFOs, I have observed the intensity of the strategy process can fully consume a CFOs attention and energy. And, on-going business issues can be a distraction. Both can prevent CFOs from being fully prepared to neither fulfill their role nor take full advantage of the personal growth opportunities the strategic planning process presents.
In observing successful CFOs, I have noticed they don’t just jump into the inherent intensity of the strategic planning vortex. Successful CFOs step back, reflect and shape a personal strategy to guide their involvement in the strategy process.
Many apply a simple framework of three question sets that proactively explore: How ready am I given the nature of the strategy we might develop? How do I protect my time so I can participate as needed? And, what areas of the strategy process provide new personal growth opportunities for me?
The following provides a framework CFOs can consider applying to shape a personal strategy to ready them for involvement in the strategic process.
Conduct personal self-assessment and readiness
- Do I have an informed understanding of what strategy is (and isn’t!) and the specific approach to strategy formulation my organization will apply?
- What industry trends, customer shifts, or competitive threats do I need to understand better?
- What critical options or directions might our strategy consider I am not familiar with, such as: M&A, new market expansion or changes to our operating model?
- Based on the above, in what areas might finance be called upon to support strategy development? For example: product portfolio analysis, capital allocation approaches, raising capital, or a new revenue / pricing models?
- Given the above, what needed experience does my finance team or I lack? How might I begin to fill these gaps?
Ready the finance team so I can be fully engaged in the strategy process
- Who on my finance team is ready to step up to be my back-up leader? How can I use this as a development opportunity for this person while leveraging myself?
- What operational areas of finance have been challenging to the point I am being pulling in to address them? What actions can be taken to ready the team to minimize my involvement?
- Which members of my finance team require more of my attention? How can I carve out defined time blocks to address their needs proactively? What support might I get for them?
- How do I establish a communication protocol and cadence to keep me abreast of my finance team, for me to keep them informed and ensure critical issues are elevated to me?
Identify areas in the strategy process that offer me new growth experiences
- What key stakeholders can I engage with to expand my relationships, such as, Board members, other peer executives and external consultants?
- What strategy discussions can I participate in that are outside my core competencies but will expand my depth of business understanding such as:
- New product and service innovation and development
- Our go-to-market model, marketing approaches and pricing
- New partnering arrangements, and
- Product manufacturing, supply change and distribution model.
Applying these questions CFOs can begin to develop a personal action plan to prepare and position themselves for meaningful involvement in the organization’s strategic planning process and realize personal growth. Equally important, by undertaking a readiness effort the CFO will have a head start in guiding the organization in its strategic choices and decisions
John Gimpert is National Programming Chair & Chicago Regional Director for the CFO Leadership Council. If you’d like to provide your thoughts and any insights you would like to share so that your others may learn from, contact John at [email protected].
About This Series
This thought piece is the first in a series providing CFOs considerations for enhancing involvement in and the value they contribute to their organization’s strategy process. CFOs just becoming involved in strategy for the first time should find the series useful in guiding their initial efforts. More experienced CFOs can apply the series as a sounding board to test the completeness of their involvement and further enhance the value they provide to the process.
What’s coming next?
- Lift off – Know the role you need to play and competencies to succeed?
- Strategy – It’s more than an annual event
- Becoming strategic doesn’t happen sitting in your office
- Are you leading others to be Strategically Intelligent?
- When moving from strategy to execution you need to lead with a strategic mindset
- Pivot or full speed ahead? Leading (and surviving!) critical shifts in strategy
- Playing to Win by Lafley and Martin
- Understanding Michael Porter – the Essential Guide to Competition and Strategy by Joan Magretta
- What is Strategy? by Michael E. Porter, Harvard Business Review
Related CFOLC Articles
- The Art of Leadership: Dale Carnegie CEO Addresses our Austin Group
- Capitalizing on The Expanding CFO Role
- So You Think You Can Lead?
The CFO Leadership Council will host 200+ live educational programs across North America in 2018. (View calendar here) The topics will provide insights, best practices, and practical advice to help develop your leadership skill set. Find a chapter near you and join the conversation!