5 skills that make an FD an outstanding FD – new research from The Directorbank Group
27 September 2010 By Northern Lights
We have spent the summer helping The Directorbank Group to carry out research into What makes an Outstanding FD? This has been done in association with Grant Thornton.
When you mention the word ‘finance director’, many will have that old image of an accountant in the Monty Python sketch trying to tame a lion. Forget that!
What makes today’s FD stand out might surprise some. As John Pearce, Executive Director of The Directorbank Group, says: “Today’s outstanding FD emerges as a much more rounded, commercial business leader than his or her counterpart of ten or twenty years ago. He is forward looking, not backward, and making brave decisions. He is a great communicator who can win the trust of colleagues across the business and is a partner to the chief executive and very often is a CEO in waiting.
So, the five things to look out for if you want to ensure your business has got the skills it needs in its FD, are
- Great communicator – able to translate the numbers for those around them, explain things clearly and concisely, focus on the most important issues. One Matthew Streets of Foster + Partners – the international architects – gives a great quote that everyone in his business thinks in pictures. So he explains the figures in graphs and pie charts!
- Strong relationship skills – able to build relationships with the banks, investors, their team, widely within the business, the board and, above all, an excellent relationship with the CEO
- Strong commercial skills – gets to understand the customers and understands the wealth creation of the business, what really makes the money
- Forward thinking – now is the time to stop cost cutting (assuming this is done) and look for investment opportunities and the future
- Courage – the need to be brave, particularly in the current economy (but of course still exercising caution!)
This research was carried out with nearly 350 directors – chairmen, chief executives and executive directors – who were asked to nominate outstanding finance directors they had worked with. Twenty five of these outstanding FDs were interviewed over this summer 2010 and offered advice for their peers in the current economy.
Three quarters of the outstanding FDs said now is the time to be brave and look for investment opportunities. Of course, they said there is still a need for caution, but finance directors should be looking to exploit competitor weaknesses and identify the growth opportunities that exist in every market and economy.
The research also covers how to recognise an ineffective FD, what to do if you think your FD is not up to scratch (in essence, don’t hang around and you probably need to sack them) and fantastic quotes from the 25 outstanding FDs who were interviewed. Don’t miss this!
Copies of the report can be downloaded free from http://www.directorbankgroup.com/or by calling 0113 297 8000 – and full press release.
Are you surprised by these findings? What’s your image of an FD?!
2 Comments
In my experience, there are a number of attributes that all outstanding FD’s possess.
Firstly, they tend to be forward looking and thinking and provide invaluable advice and suggestions on how to improve a business – rather than blindingly reporting on last month’s financials.
Secondly, they have good communication skills and strength of character which gives them the confidence to “tell it as it is” and not attempt to sanitise information. This enables them to demystify figures and present them in an easily understandable format – rather than just in accordance with pure financial reporting principles. Furthermore, they are able to “hold their ground” when necessary but pragmatic enough to maintain good relations with the CEO, shareholders and funders at all times
Thirdly, rather than being risk adverse and sitting on the sidelines, they are an integral part of the management team and an essential party to taking calculated risks.
Hi Stephen, really interesting comments here that I would agree with.
Over the summer, I carried out interviews for the Directorbank research with around half of the nominated ‘outstanding FDs’ and your comments absolutely concur with what came through. In fact, our outstanding FDs were so forward looking that they were saying that now is the time to be brave. Competitors will potentially be weak and businesses have to grasp opportunities now, rather than stay stuck in a cost-cutting mentality – and above all they should invest for the future.
On telling it the way it is one outstanding FD said ” One of the key roles of an FD is to shine a light in corners where others don’t want it shone, and to tell the facts as they are, not how others would like to see them.”
Thanks a lot for the feedback
John