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The World of the CFO – Part 1

February 29, 2012

beyond insuranceIn your quest to become a Trusted Business Advisor, it is essential that you comprehend the World of the CFO. 

The role of the CFO has become more complex than ever.  They are doing more with less and juggling as never before in a climate of fierce competition, rising costs and increased customer demands.  CFO’s expanded roles include managing people, systems and technology infrastructure in an era of intense regulatory scrutiny.

CFO stands for Chief Financial Officer – the person in a business who directs the organization’s finances. 

Historically, the CFO’s roles and responsibilities were narrowly defined.  Their focus was limited to financial planning and record keeping as well as financial reporting to higher management.  Success was seen in terms of balance sheet protection.

The Modern CFO

The modern-age CFO is radically different than his or her predecessors.  They are required to be business generalists with an in depth knowledge of their enterprise.  They are custodians of organizational knowledge.

Today’s CFO faces pressure to cut costs, grow revenue, institute controls, and are even put at personal risk for the company’s mistakes.  One reason the CFO’s job is so fraught with challenge is because it’s really four jobs in one! 

  1. The first is that of steward, preserving the assets of the organization by minimizing risk and getting the books right.
  2. The second is operator, conducting finance operations efficiently and effectively.
  3. Third is strategist, influencing the company’s overall direction.
  4. And fourth is the catalyst, installing a financial mindset for execution and risk-taking throughout the business.

A key objective of the CFO is to improve the ability of their beyond insuranceorganization’s decision makers – especially the CEO.  The CFO accomplishes this by delivering reliable information to the company’s management team, and helping these people analyze the data to facilitate the decision making process.  Today’s CFO excels at strategic planning, performance management, infrastructure design, deal making, team development, and external communication. 

Relationship with the CEO

The CEO relies greatly on the CFO.  A strong relationship and mix of skill sets allow the CEO and CFO to share the workload of managing the business.  As a standard, the CEO expects the following skills and characteristics of the CFO:

  • Strong financial and leadership skills
  • Experience with technology and information systems
  • Ability to identify and capitalize on revenue growth opportunities
  • Understanding of business and market challenges
  • Ability to align day-to-day operations with long term strategic goals
  • Mindset to reduce costs without compromising productivity
  • Ability to effectively interact with all departments within the organization
  • Passion for what they do and the desire to go above and beyond their job description

Now that you’ve discovered the characteristics of a modern-age CFO, do you feel better prepared to approach one?

In our next post, we’ll share some common situations a CFO typically needs to address, and describe the ways in which they need the help of insurance and risk management professionals.

Scott Addis

For more ideas on how to break the commodity trap connect with Beyond Insurance on:

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The author, Scott Addis is the President and CEO of The Addis Group and Addis Intellectual Capital, LLC (AIC). AIC is a coaching and consulting company whose purpose is to transform the process that insurance agents, brokers and carriers use when working with clients. Scott is recognized as an industry leader having been awarded the Inc. Magazine’s “Entrepreneur of the Year” Award as well as “25 Most Innovative Agents in America”. Scott can be reached at saddis@beyondinsurance.com or 610-945-1019.

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