The CFO strategic expert and commercial co pilot - A workplace study

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Market overview
Asked about the challenges their organisations currently We asked CFOs:
faced – and if they differed from the previous two years. ‘What are your key
Our Finance chiefs reflected the different stages their business challenges?
businesses have reached in the business recovery cycle.
They told us:
Some are still battling back from the Rob Hudson, UK CFO of global information ‘Preparing for growth;
recession, a time when it has been harder business Experian explained his current
dealing with regulation

The CFO
to get funding from banks, and customers challenge: “The last two years has been
have been focused on driving the keenest about focusing on our financial services and managing change.’
price bargains possible. But almost all the business while growing new vertical
businesses we interviewed commented segments. Now, as we diversify into SMEs,

Strategic expert and
that their current focus was how best to the Public Sector, telecoms and insurance
invest in the business to ensure it was – as well as new geographic markets - it’s
ready to meet the growth demands that about identifying and adopting the right

commercial co-pilot
the upswing will eventually bring. opportunities. There are plenty out there:
the trick is to find the best ones that offer
“The biggest challenge is the need to us the best chance for success. Then
invest in the business to get it ready for it’s all about aligning all the necessary
“It’s about identifying
growth,” commented Robin Sharpe, CFO resources to meet the opportunity and adopting the right
at Slipstream Ltd, a leading marketing
services business supporting global
A Badenoch & Clark workplace studyopportunities. There are plenty
Other challenges on the radar:
technology vendors. “It’s still a very May 2011
Compliance and regulation provided a
out there: the trick is to find
difficult market, and requires really careful recurring theme with an overwhelming the best ones that offer us the
consideration and fine tuning so that we feeling that the Board – led by Finance - best chance for success. Then
can balance cashflow with investment.” has to deal with an ever-more intrusive
regulatory environment. For industries
it’s all about aligning all the
For sales-led businesses such as such as financial services, rail, water and necessary resources to meet
insurance, coming back from a period the airline industry, there was growing the opportunity.”
of heavy customer defection has been pressure not just to satisfy shareholders
the challenge for the likes of RIAS FD, and all the organisation’s internal Full name / Organisation
Nick Lemans. “We’ve gone through the stakeholders, but external regulators too.
period of cutting costs and paring spend
back to the bone, but the focus of the “We operate as part of a bullish transport
business has now moved forward. We’re operator in First Group, but have to
now working with the business to build balance their stretching revenue and
an attractive brand strategy that will profit targets with the service level
make RIAS stand out in a very competitive agreements set by Transport Scotland,”
market, but is also cost effective and commented Scot Rail’s Billy Connelly.
sustainable.” “Sometimes it’s a particularly tricky
tightrope to tread.”
Financial Services has clearly been an
area that has suffered significantly in the The regulation picture potentially
downturn, but having steered through the becomes exponentially more problematic
choppiest waters, our CFOs are definitely when there’s an international dimension
looking forward. One midlands-based involved, as BUPA International’s Wayne
insurer is now focused full-time on Close observed: “Different regulations are
preparing the business for floatation, in play in almost every market in which we
while other CFOs have championed new operate. It’s my job to keep all the plates
business areas as a way of building future spinning: to ensure that a problem in
growth. one market can be overcome and doesn’t
become a wider issue.”

www.badenochandclark.com

The CFO: Strategic expert and commercial co-pilot / A Badenoch & Clark workplace study / May 2011 Page 2 0f 10

The CFO: Strategic expert
and commercial co-pilot
A Badenoch & Clark workplace study

Foreword
The role of the CFO within business has never been more It would appear that CFOs continue to struggle with the balance of
challenging or more important. With ever-growing demands from skills needed in their teams and experience challenges in balancing
the board, the business and external stakeholders, it’s no longer the technical and behavioural capability of their teams; the mix it
enough for today’s CFO simply to be ‘good with numbers’. Today the seems is all important. This may well reflect the demands on teams
challenge is much more around strategy, commerciality and leading in the recent downturn to focus on managing the numbers tightly.
a finance team that’s a real driver of business success. But what But if CFOs genuinely believe they need a different skill base –
does that mean in practice? and we’ve no reason to doubt this – they do need to begin the
process of mapping out exactly what this should look like in their
We asked CFOs and FDs across the country for the inside track on organisational charts.
the challenges they face; the expectations they have to live up to
and their thoughts on their role, the function they lead and its place Part of the issue lies, we believe, in not having a clear set of
in their organisation’s drive for success. We asked them to define competencies for finance people and a structured way of identifying
the kind of skills they’re looking to grow and recruit – and indeed these in potential new recruits. If they are serious about the need
what skills CFOs need to put them on track to a stellar future. What to shift finance up a gear, CFOs need to bite the bullet and critically
they all demonstrated was the rapidly-changing role of Britain’s top assess the current capability of their people and, where necessary,
finance professionals. consider bringing in new blood with the required skill set.

We have reported for some time the increasing pressure on So, take a look inside to get a rare insight into the challenges of
finance teams to be more commercial and to display stronger today’s CFO.
communication and influencing skills. This message was reiterated
by the CFOs in our research. While technical expertise is often
an entry card to a career in finance, it’s increasingly obvious that
those who progress to senior management also need a wide range
of softer skills. These skills are those of a broader, more strategic
manager than the ‘number cruncher’ of old.

While many CFOs recognise the future skills needs of their teams and
some acknowledge that technical expertise may take second place
to communication and influencing skills in the future, it’s important
to note that, as finance recruiters, we’re not necessarily seeing this Lynne Hardman
translate into the typical job specification for an accountant. Managing director, Badenoch & Clark / May 2011



Market overview
Asked about the challenges their organisations currently We asked CFOs:
faced – and if they differed from the previous two years, What are your key
our finance chiefs reflected the different stages their business challenges?
businesses have reached in the business recovery cycle.
They told us:
Preparing for growth;
“The biggest challenge is the need to Coping with change remains a very ‘live’
invest in the business to get it ready issue for most of our CFOs who have seen dealing with regulation
for growth,” commented Robin Sharpe, their organisations go through significant and managing change.
CFO at Slipstream Ltd, a leading marketing transformation in the recent past – or are
services business supporting global in the midst of transformation now. Richard
technology vendors.” Gray, finance GM at BMI summed up what
can be a painful experience. “BMI was
For sales-led businesses such as insurance, acquired by Lufthansa in July 2009. Since
coming back from a period of heavy then, we’ve had to move from a cash and
customer defection has been the challenge P&L driven non-corporate, relationship-led,
for the likes of RIAS FD, Nick Lemans. owner-operated organisation to one that’s
“We’ve gone through the period
“We’ve gone through the period of cutting fit for purpose in a large process-driven
costs and paring spend back to the bone, corporate empire. It has been a massive of cutting costs and paring
but the focus of the business has now cultural change at all levels.” spend back to the bone, but
moved forward. We’re now working with
the focus of the business has
the business to build an attractive brand Finally, not all our CFOs have struggled
strategy that will make RIAS stand out in with the effects of the recession. Equiniti now moved forward. We’re
a very competitive market, but is also cost group is a specialist outsourcer for now working with the business
effective and sustainable.” pension administration, share regulation
to build an attractive brand
and related services. Its CFO, Alasdair
Compliance and regulation provided a Marnoch confided: “We rather like strategy that will make RIAS
recurring theme with an overwhelming recessions as many organisations choose stand out in a very competitive
feeling that the board – led by finance – to outsource their non-core services. We’re
market, but is also cost
has to deal with an ever-more intrusive seeing a number of opportunities come
regulatory environment. For industries out of the public sector as we know we can effective and sustainable.”
such as financial services, rail, water and deliver services much more efficiently.”
the airline industry, there was growing Nick Lemans / RIAS
pressure not just to satisfy shareholders
and all the organisation’s internal
stakeholders, but external regulators too.

“We operate as part of a bullish transport
operator in First Group, but have to
balance their stretching revenue and profit
targets with the service level agreements
set by Transport Scotland,” commented
Scot Rail’s Billy Connelly. “Sometimes it’s
a particularly tricky tightrope to tread.”



Today’s CFO
“For today’s CFO, technical skills are just an entry point. We asked:
It’s about shaping the business.” So said Allan Dowie, What are the
CFO at Clyde Union Pumps and his view was reflected by pre-requisites for
most of the CFOs we spoke to. today’s CFO?

Our survey told us:
The terms they continually referred to were of the business. But we need to be A key business player,
‘strategic’, ‘forward-facing’, ‘commercial’, adaptable too – able to manage cost
‘flexible’, ‘inspiring’ and ‘influential’. reduction one year but then able to with commercial
drive business growth the next.” acumen; a strategic
So what makes a great CFO today? Each of view of the business;
our interviewees looked to their peers to “My job’s taking me further and further
build an amalgam of the skillset required from the nitty gritty of the numbers,” ability to manage
in today’s business environment. stated RIAS’ Nick Lemans. “I’d see myself people, risk and
now as an interchangeable player in the change – and to earn
Network Rail’s John Schofield said: top team leading the business. That means
“The top finance roles are becoming much being able to communicate with the board the respect of the
more strategic – the technical elements of in the language of the business, painting board. Financial
the role are now simply intuitive. The real a picture and telling a story in a way that’s skills are a given.
obsession is people and change. We’re not going to push their buttons.”
in a back office or ivory tower any more,
and are far more strongly aligned with Ozgur Kilic, CFO for Novartis Vaccines and
HR in delivering an enlightened, business Diagnostics concurs: “I hardly ever talk
driven approach. Finance is now a driver finance with my boss. My conversations
of the business.” reflect my role, which is to get involved
in business decisions, strategy and
For Guy Adams, the finance director at influencing the direction of the business.”
“We’re not in a back office
NSL Ltd, the commercial arm of National
Air Traffic Services, engagement and or ivory tower any more, and
adaptability are core elements of the are far more strongly aligned
finance DNA. “We need to be able to
with HR in delivering an
engage with the business on the
business’s terms in developing strategy. enlightened, business driven
That means being credible and convincing approach. Finance is now a
communicators with a deep understanding
driver of the business.”
John Schofield / Network Rail



The CFO as functional head
There’s an art to being a great functional head, and our We asked:
respondents were clear on just how vital it is to create the What’s important in
right culture for success in the finance function. your managing style
when it comes to
leading the finance
One CFO painted a picture of a past Clyde Union Pumps’ Allan Dowie added:
incumbent who seemed intent on “It’s essential for the CFO to be a function?
keeping the function in the dark ages. role model to the finance team of the
“He insisted that no-one but him talked behaviours we want from them. I know
to any other function in the business,” I have to get my team to engage and Our survey told us:
the CFO recalled. “He also gave everyone act with the business – not to be aloof People management
in the team very specific responsibilities or falling back into finance-speak. The
and didn’t allow anyone to work on any business wants challenge and I want is key: build the right
piece of work that he didn’t consider was the finance team to get the business to team and give them all
‘theirs’. It was divide and rule. No-one recognise that they should spend money the support they need
could challenge him; the team operated in as if it was their own.”
silos with massive gaps and unnecessary to do a great job. Don’t
duplication and morale was through the get bogged down in
floor. It has taken me the best part of two the detail. Be confident
years to even begin to turn that round.”
in delegating to your
people.

“The business wants
challenge and I want the
finance team to get the
business to recognise that
they should spend money as
if it was their own.”
Allan Dowie / Clyde Union Pumps



The evolution of the finance team
No longer can finance afford to be a back-office oasis intent We asked:
only on reporting what’s already happened. The niche the What role does the
function fits into today is forward-looking playing a key role finance team play in
in decisions and controlling the future of the company. the business today?

“It’s imperative for finance to be in Providing that kind of support requires Our survey told us:
charge of events, not have events a different kind of finance person from Much more commercial;
controlling us,” stated Slipstream’s the ‘norms’ of a few years ago. Network
Robin Sharpe. “At all levels, we must Rail’s John Schofield sums up the type of a business partner
scrutinise spending, challenge plans person more prevalent in today’s finance challenging business
and ideas and suggest solutions.” teams. “The key challenge for finance thinking on business
is to build the right chemistry between
Certainly finance now seems to be more the appropriate finance person and their terms. Outgoing,
willing to integrate with the business as business peer,” he commented. “The communicative and
supportive contributors to the decision business wants its finance people to understanding.
making process rather than merely being understand the business and be able
reporters after the event. “My team’s to speak and think in business terms.
key challenge is to support the needs of That translates into three key attributes:
the commercial team and ensure that as to deeply understand the business
a business we have sufficient resources area they’re involved in and the overall
available for the business to meet its business context; to be a skilled and
strategic targets,” explained Julia Wilson active communicator, and to challenge
from S&A Foods. ideas and norms.”
“My team’s key challenge is
to support the needs of the
commercial team and ensure
that as a business we have
sufficient resources available
for the business to meet its
strategic targets.”
Julia Wilson / S&A Foods



Today’s finance skillset
To some degree, skills were lacking in the teams of just We asked:
about every CFO we interviewed. Many CFOs noted that What kind of skillset
they had inherited fairly traditional finance teams and is required in finance
were in the midst of cultural change. today, especially for
managers aspiring to be
At Novartis, Ozgur Kilic noted there was “I look for people with a ‘bit of spark’,” CFOs? Are any of these
cultural change necessary both for the noted RIAS’ Nick Lemans. “Some are skills in short supply?
function and the business as a whole. ACCA/CIMA/ACA qualified, but that’s not
“We need to make sure that finance actually the requisite for many jobs in
isn’t at the back of the queue when it finance. What’s needed most is the ability
comes to the business making strategic to understand and actively support the Our survey told us:
decisions. But to change the perception needs of the business. Accounting skills
of the business, we have to upgrade our
are a given. The
team’s business partnering skills and Meanwhile, Network Rail’s John Schofield
general awareness of the business. Being was unequivocal: “We need to change the build is excellence in
able to speak the language of the people traditional finance mindset: to understand communication and
they’re interfacing with helps our team that we have to break the umbilical that
influencing, adaptability,
change the business perception that we’re states that anyone in a senior finance role
the team that likes to say ‘no’, to being has to be a qualified accountant. willingness to engage
seen as a team that can come up with within the business and
alternative solutions to business issues.” What was very apparent from the
an equal willingness to
responses we received though was the
“We need individuals who are both well need to get the mix right to ensure the influence and challenge
rounded and grounded,” added Umbro’s finance team can operate effectively. for the good of the
CFO, Gary Brown. “What’s also important
business.
is the ability to multi-task in what can be At Bupa International, Wayne Close
a very fast paced working environment.” has worked to build a team that has
the right personality in the business.
So what skills do CFOs currently find “I’ve deliberately built a diverse team,
lacking in their teams? Most were generally recruiting people not just capable of
full of praise, but when pushed, a CFO from doing the job they’ve been employed to
the supply chain industry stated: “It’s the do, but also able to step up and grow in
soft skills; the interpersonal stuff. Finance the finance team. There is a mix of people
“What’s also important is
people like to interact with finance people. from diverse finance backgrounds – and
They get a bit frayed when they have to go all the expected qualifications – who can the ability to multi-task in
out into the business.” expand commercially. what can be a very fast paced
working environment.”
Many businesses are looking for finance
managers who have experience from Gary Brown / Umbro
other functions that they can bring to
the mix, which steered our discussion
into the kind of people our CFOs recruit
to strengthen their team and prepare for
future succession.



How will senior finance roles change?
In terms of facing the future, we asked a sub-group of
respondents to answer: ‘How will the top finance roles “The CFO role is going to
change most moving forward?’ evolve further to focus on
growth and delivering change
Our respondents saw commerciality, Experian’s Rob Hudson painted the
to adapt to the market.”
strategic input and increased impact both picture of tomorrow’s CFO. “Business
William Medlicott / ITV
at board level and across the business as direction and finance direction will be
the CFO drivers moving forward. interchangeable. The CFO will have
strategic foresight bolstered with great
“We’re in a changing marketplace,” relationship and influencing skills. The
William Medlicott of ITV commented. role will be to make change happen
“The CFO role is going to evolve further to through the art of the possible.”
focus on growth and delivering change to
adapt to the market.” Umbro’s Gary Brown Clyde Union Pumps’ Allan Dowie saw
“This job has to be at the level
echoed this saying: “We have to become the role going even further. “I see the
more strategic and execution-orientated. CFO moving more into the COO box with where we’re not concerned
This job has to be at the level where we’re more emphasis on further managing about the minute details,
not concerned about the minute details, external relationships. In future, I think
because we can delegate these
because we can delegate these to trusted we’ll be thinking less about finance, and
managers.” focusing more on taking business-critical to trusted managers.”
decisions.”
An insurance CFO told us: “The role will Gary Brown / Umbro
be ever more about change leading to
business transformation. Control remains
a challenge – but it’s our bread and
butter. We have to manage risk, it can’t
be avoided. But the challenge is to find
and maintain the right balance of risk
versus opportunity. And, ever more, the
CFO will play a leading role in managing
the external stakeholders we work
with and for – and who will enable our
transformation to happen.”



The up-coming challenges for CFOs
The challenge for all is to extend the capabilities of their
financial systems beyond core activities into new areas “Finance has to be an active
integral to driving productivity gains higher. and involved player in this
demonstrating our position as
For Allan Caven, a group FD from the For all, the demand is to take the
‘value champions’.”
East Midlands, it’s about cementing ‘commercial co-pilot role’ more than a
Gary Brown / Umbro
finance’s hard-earned respect in the trusted adviser and integral to driving the
business. “Businesses are now looking business forward. Southern Water’s CFO
for real direction from finance. As a result, Mike Jones summed up the complexities
commercial and communication skills are of the challenge. “The scale of the role
key. We must now live up to our billing as is ever-widening. It’s about business
an integral part of the business – we’re development, security, stakeholder
no longer just a necessary evil.” Adecco’s management and keeping on top of the
Neil Martin added: “CFOs must make regulations. There are two distinct sides
the most of a very fortunate position of of business and I often wonder how I can “The scale of the role is
being able to look at the entire business fight the alligators and drain the swamp at ever-widening. It’s about
lifecycle from concept to cash. The magic the same time!”
is in then being able to turn more of the
business development,
organisation’s income to a positive on the security, stakeholder
bottom line.” management and keeping on
For a number of CFOs who have been
top of the regulation.”
through major change, the way forward
Mike Jones / Southern Water
is putting their new strategies into
practice. That’s the case for Gary Brown
at Umbro: “The last year has been about
strategy development, now the focus is
on execution, taking the brand into new
markets and regaining brand control.
Finance has to be an active and involved
player in this demonstrating our position
as ‘value champions’.”



Details and methodology Related articles
This report was researched and written for Penny Penman, Michael Quinn, Richard Career planning essentials for employers
Badenoch & Clark by Mark Shanahan of Hatchett, Mark Norrish, Kay Senior, A Badenoch & Clark guide
Leapfrog Corporate Communications Ltd. Danielle Coleman, Jenny Burton, Helen Developing your career plan
Goold, Maureen Ford and Tom Cliffe. A Badenoch & Clark guide
Over 40 Interviews were conducted
Employer branding essentials
between November 2010 and January 2011 We are all immensely grateful for the A Badenoch & Clark guide
by Mark Shanahan and Badenoch & Clark’s time and candour of all the contributors
Dave Fleming, Ian Machell, Ben Searls, to the report. Your personal brand: making yourself
attractive to employers
A Badenoch & Clark guide

Copies can also be requested
from Margaret Emmens at
About Badenoch & Clark margaret.emmens@badenochandclark.com

Whether you’re looking for a fresh career organisations, understanding their
challenge or you’re an employer looking precise needs and getting a good feel Other Badenoch & Clark resources
to recruit talented professionals, you’ll for their culture. And our focus on
appreciate working with a recruitment building industry knowledge means Insight
Regular analysis of current trends in your market.
consultancy that really understands your we can advise on broader recruitment Visit www.insight.badenochandclark.com
needs. trends in your industry.
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Contact us
For more information on our workplace study please contact:
Heidi Waddington, Operations Director Accounting & Finance on
01179 251 600 or at heidi.waddington@badenochandclark.com
Margaret Emmens, Marketing Manager on 020 7300 9235 or at
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