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CFO success can be boiled down to four practices, according to Gartner research: Making their personal priorities known, scheduling those priorities before other activities, ensuring there’s enough time to execute on those priorities, and retrospectively reviewing how that time was spent.
However, there’s a fifth practice that should be on this list, and that’s taking the time to gain bottom-up insights. That’s because it’s not just a numbers game anymore; being a successful financial professional in the 21st century, especially one of C-suite stature, requires a greater focus on what’s driving them.
As for what that means, obviously it’s having a strong understanding of the company and its unique interests. Equally so, it means having a strong understanding of the industry, as well as a strong understanding of the perspectives of the individuals in it and affected by it.
This latter part isn’t difficult to do – all it takes is some curiosity and some conversation. When I was a lower-level accountant, for example, I would frequently take a few moments to ask my coworkers – like a foreman – what they do each day and how they do it – like pouring concrete.
Such small conversations can actually go a long way in broadening someone’s perspective and equipping them with the supplemental knowledge they probably weren’t exposed to in their studies or everyday work. Bottom-up insights can help CFOs understand how time and money is being spent, and how that time and money might be reduced. It gives them a chance to know what investments might be most helpful in not only increasing employee productivity, but increasing employee satisfaction and reducing turnover. And when it’s coupled with insights into public opinion about a particular project, it also gives CFOs the big-picture awareness they need to enter into conversations with stakeholders confidently.
This has proved especially true in my current work with Texas Central, which will soon break ground on the country’s first high-speed rail between Houston and Dallas – amazingly, the United States is the only developed economy without one. As a private company that doesn’t depend on taxpayer dollars, it’s my job to secure funding for this project, which often takes me overseas to Japan, the home country of this high-speed rail technology. There, I meet with potential investors, walking them through why this project is in undeniably one of the best markets, and why it’s a worthwhile investment given the long-term cash flow opportunity.
Drawing on both past and present insights in these conversations, I’ve been able to perform one of the most essential functions of my position: growing company capital. But what I’ve also been able to do – and that other financial professionals who follow suit can do, too – is position myself as a strategic partner.
As a strategic partner, I not only weigh in when asked, I make my own requests to the CEO. I’ve even given CEOs I’ve worked with “homework,” asking that they step out of their comfort zone and see things through my lens, or someone else’s. This helps them understand the reasons behind certain recommendations, and ensures they really think through their ultimate decision. It might make monetary sense to reduce wages, benefits, or cut positions altogether to save money, but leaders have to think about the side effects that might arise from doing so. Disgruntled employees and frustrated members of the community have the power to seriously damage a company’s brand and jeopardize its bottom line.
Insights increase knowledge, and knowledge, we know, is power. Former CFO of Walmart, Charles Holley, would agree, having once said, “Typically, nobody understands the entire company quite as well as the CFO,” and as such, “CFOs are best positioned to be the CEO’s right hand.”
So, if Holley’s comment and my experience prove anything to be true, it’s this: It pays to know what’s really happening in your industry, your community, and your organization, even if it means starting from the bottom and working your way up.
Lori Willox is the CFO at Texas Central.