17 October 2022 | Financial Planning & Analysis

Financial Leadership: 5 Skills Every CFO Should Master

Most CFOs have a pretty good hold on the whole finance thing. I mean, it’s why they got the top financial gig in their company.

However, being a great Chief Financial Officer is about more than being the best at crunching numbers.

As a CFO, you’re part of the senior leadership team, meaning you’re not just the numbers person, but an influential leader in your organization.

So, it kind of goes without saying that you also need to be a great leader.

In this article, we’re first going to explore how the role of financial leadership has evolved over the last few years and what that means for current or aspiring CFOs.

Then, we’ll discuss five aspects of financial leadership you need to nail.

The Primary Role of Financial Leadership

The principal role of a financial leader is not to spend all day preparing spreadsheets, graphs, and financial reports.

That’s what the rest of your finance team is there for.

Your job as a financial leader is to focus on strategy. Yes, you’ll still need to be deeply embedded in the numbers, but your goal is to view this information through a strategic lens.

That is, you’re constantly asking:

In short, CFOs should set an example for their entire team by creating strategies and processes aimed at growth.

To be clear, this isn’t necessarily the traditional role of the CFO, but rather what makes a great CFO in today’s environment.

Transformation of The CFO Role

Traditionally, CFOs have kind of been in the background.

Other senior leadership positions like CEO and CMO had a much more front-and-center position in the organization; everyone knew who they were and what they did for the businesses.

While this is still true of those two roles, the CFO position is continuously evolving and requires these financial leaders to take a more proactive approach to financial management.

This primarily involves communicating strategic direction to grow the company.

More specific aspects include:

Modern CFOs also take a much more involved position in managing the financial roles beneath them, ensuring that everyone on their team is working toward growth.

This involves actively looking for opportunities to optimize the budget, analyzing financial scenarios, and spotting opportunities to increase revenue.

5 Keys to Be a Great Financial Leader

So, you’re a CFO right now (or perhaps you’re gearing up to become one), and you want to know how you can embody the spirit of modern financial leadership as best you can.

If you can master these five aspects of financial leadership, you’ll nail it.

1. Build and Push The Strategic Financial Vision

Notice the two key identifiers in that sentence, “build” and “push.”

Building the financial vision for your company is the first step, moving you beyond the “business as usual” stuff and focusing on the long-term viability and growth of the organization.

This should go deeper than top-line numbers (“Our goal is to pull $3.5m in revenue this year”). Your strategic financial vision should include details like:

The second half of this game is the “push” component. That is, communicating that strategic vision to the company in a meaningful way (a bit more on that point soon).

Exactly how you deliver this message will depend on your organizational structure and company size.

An all-hands meeting might be appropriate for more intimate startups, but it will probably just be a pain in the butt for organizations with 500+ employees.

Some form of presentation (either written or video) can be distributed by email, but you should bear in mind that engagement might not be as high as you’d like.

Supplement this messaging with communication from department heads (that is, you speak to the Marketing VP, and they deliver your strategic vision to their team in a manner that makes sense for them).

Speaking of working with department heads…

2. Collaborate With Other Team Members and Departments

Strategic financial visions are ineffective if they don’t actually reflect how life works in each business department.

Say, for instance, your goal is to increase revenue by 30% for the next quarter. You’ve identified that your outbound sales team is a key revenue driver, and you’ll need to grow the team by 50% to meet that goal, hiring five new outbound sales reps.

This seems fine in a vacuum, until you deliver the plan to your VP of Sales, who informs you that the hiring market is tough right now. It will take at least two months to hire and onboard those reps, and your estimates don’t account for ramp time.

Don’t make the mistake of developing a “foolproof” financial strategy and then delivering it to the organization as a finalized, set-in-stone plan for success.

Instead, collaborate with department heads during the development of your strategic vision. Ask:

3. Make Finance Digestible For The Entire Company

The ability to make financial statements, visions, and performance digestible to the entire company is a crucial skill for modern CFOs.

Often, the work that finance teams do gets overlooked simply because finance leaders don’t do a great job articulating the work their team does, and contextualizing it in a way that the entire company can understand.

However, when they can explain what they’re working on, why it’s important, and any wins they have, it boosts the finance team’s morale and helps other departments understand how their work intertwines.

As a first step, remove or translate financial jargon from your company communications.

Terms like equity, amortization and EBITDA are largely lost on your non-finance employees. You know, the ones that make up the majority of your team.

Then, explain to teams how their day-to-day actions impact financial progress.

4. Connect The Dots Between Financial Goals and Day-To-Day Operations

A big part of financial leadership today is getting buy-in from everyone in your organization.

Unfortunately, it’s often unclear how the day-to-day operations of certain roles influence progress toward financial objections.

For salespeople, for instance, it’s fairly obvious. The better they are at their job, the more revenue your sales team closes, and the better your business does financially.

But other important roles in operations, administration, and customer service are less directly linked to financial goals.

Effective CFOs can connect the dots for people in those roles.

They can explain, for instance, how the accounts payable tasks assigned to an administrative assistant relate to financial goals:

If vendors are paid correctly and on time, we can reduce supplier costs through early payment discounts, and our financial projections will become more accurate.

5. Be Prepared To Deal With Change

It’s great to design a comprehensive financial strategy and communicate it well across all departments.

But what happens when that blueprint doesn’t go according to plan? Which, of course, happens more often than we’d like it to, right?

Highly effective financial leaders have a strong ability to deal with and adjust to changes, even when they are extreme and unanticipated.

Part of this comes down to preparedness. How well are you able to account for potential deviations from the plan? One tactic that great CFOs use is scenario planning.

You build your financial model based on expectations, budgets, and goals, but you also design alternative models to account for any deviations. This typically looks like three plans:

  1. Baseline plan
  2. Upside plan
  3. Downside plan

Building this in advance helps you stay agile. If revenue falls below budget by 10% due to an unexpected market adjustment, you’ve already got a plan in place for how to deal with it; it’s simply a matter of engaging plan B.

Of course, you can mitigate only so much of this risk, and the truth is that unexpected changes often occur.

Financial leaders who are adaptable, agile, and skilled at problem-solving and on-your-feet thinking will excel here.


Effective financial leadership is about going beyond the numbers and focusing on being a great leader.

For CFOs, this includes:

That’s a lot to juggle.

Why not take the manual number-crunching aspect off your hands and use a powerful and comprehensive financial modeling and reporting platform?

Yes, we’re talking about Finmark.

Book a demo with one of our helpful team today, and let us show you how we can help you become the best finance leader you can be.

Josh Krissansen
Josh Krissansen

This content is presented “as is,” and is not intended to provide tax, legal or financial advice. Please consult your advisor with any questions.

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