CVO: How CFOs can add value through communication
CVO: How CFOs can add value through communication
Communication skills are a crucial element in the ability to add value to an organisation. As people who typically identify as ‘good with numbers’, many finance professionals feel challenged by the skills required to deliver strategic, effective communication. However, as the role of the CFO evolves into that of Chief Value Officer (CVO), these skills are vital. As agents of change in their organisation, CVOs must develop their ability to communicate with a range of stakeholders confidently and clearly.
Continuing our CVO content series - which explores the key findings of BDO and ACCA’s ‘Chief Value Officer – The Important Evolution of the CFO’ report - we recently hosted a webinar with communication experts Sue Rosen and Andrew Butler to discuss:
- Why CFOs need to be great communicators
- The opportunities in communication for CFOs
- Why communication skills should be included in finance education
- The importance of succinct communication and key messages
- Why good communication and a healthy relationship between the CEO and CFO, or CVO, is crucial.
The webinar recording is available to view on our YouTube channel.
Why do CFOs need to be great communicators?
If we’re honest, finance professionals aren’t typically known to be great communicators. However, relationship-building and communication are crucial skills for finance leaders – and the two go hand-in-hand. Our panellists identified the key reasons why these skills are so important for the CFO/CVO.
CFOs and CVOs are agents of change
With unique oversight across the business, CFOs are increasingly critical to the change process in their organisations. As businesses face change more frequently and at a faster pace, leaders' ability to clearly articulate a vision, inspire, empower, influence, and build trust is vital to successfully navigating change—and all require outstanding communication skills.
Communication skills are key to career development
Good communication is considered an essential leadership skill. Gone are the days when technical skills and hard work were enough to achieve promotion. While these are still important, potential leaders must also be visible in their organisation and have meaningful, trusted connections with stakeholders, built through strong communication.
Good communication builds trust
The CFO is often tasked with communicating complex financial data – and the story behind the figures - to an audience who don’t necessarily hold the same level of financial literacy as they do. It’s surprising how often other business leaders either aren’t aware of this shortfall in their financial knowledge or are unwilling to admit it. This scenario requires deft handling and savvy communication. Done well, these opportunities build trust among stakeholders: Trust in the CFO's expertise and their ability to deliver the necessary information at the right time and in the right way.
What are the communication-related opportunities for CFOs to deliver value?
Outstanding communication skills offer numerous opportunities for CFOs to evolve their role into that of CVO, elevating their presence and adding value to their organisations.
Building executive presence
You move ahead only when you can clearly and confidently express and articulate what you bring to the table. By improving what Sue Rosen calls “executive presence,” CFOs can better inspire others, even under pressure. This requires self-reflection and a growth mindset, but the time and effort put into this are worthwhile investments.
Becoming a super-connector
In speaking to CFOs for our report with ACCA, many noted that an organisation’s human capital—its people—is key to creating commercial advantage. CFOs are uniquely placed to act as ‘super-connectors’—maximising value by bringing ideas and people together, connecting at different levels, and understanding what matters to various stakeholders. Listening is critical to the role of the super-connector in understanding and considering multiple perspectives.
Increase strategic influence
True CVOs aren’t simply translators of complex financial data but influencers within their organisation. They focus on the strategic over the tactical and are at the leading edge of change. They are compelling, persuasive, and succinct communicators who are respected leaders and have challenged the traditional perception of the CFO.
Risk management
A key opportunity for CVOs to create value is proactively managing risk – not just immediate or urgent crises. Running potential scenarios and identifying risks can help clarify potential objections, key messages and responses ahead of time. The more practice a leader has at operating under pressure, the more likely they will step up and add value in a crisis. GenAI can be an effective means of running practice scenarios and anticipating objections – see our previous webinar on adding value through AI for further discussion on this point.
How can we educate the next generation of CFOs?
Finance professionals are used to being respected and rewarded for having the ‘right answer’, which is far easier to achieve when dealing with figures and data than in change management and communications. For this reason, the required skills and role of CVO can be confronting.
Rather than focusing purely on technical competence, which is extremely important, our panellists discussed why there is space in finance education to include communication-based skills, including change management and relationship-building.
With an emphasis on learning to communicate effectively in secondary school, it’s important that the development of these skills continues throughout tertiary education—particularly in those disciplines where they may not be traditionally considered essential skills.
The next generation of CFOs must be highly adaptable and flexible – belief in one ‘right answer’ will only hold them back. They shouldn’t be afraid to say, ‘I don’t have the answer – I’ll come back to you.’ Nor should they be afraid to ask questions. Any attempt to approach a problem or issue from another perspective must be welcomed. Having these skills demonstrated by senior leadership in their workplaces will be invaluable to their development.
The importance of being succinct and using key messages
Finance professionals tend to communicate more detail and technical information than necessary. That’s not to say that data isn’t essential – but it’s more important to understand what is meaningful to your audience.
To do so, CFOs must have a firm grasp of the business strategy, the critical levers across the organisation, and the metrics that matter most to various stakeholders. The best way of achieving this is to gather information from leaders across the business. What are the two or three most meaningful metrics that will influence behaviour and drive positive change?
Remember that most audiences are drowning in information. This is particularly true at the C-suite and board levels, where information overload can lead to unfocused, ineffective discussions. By concentrating on two or three key indicators at any given time, CFOs can focus attention and conversation on changes and behaviours that create value.
How can CFOs bring value to their relationship with the CEO?
The relationship between a CFO – or CVO – and the CEO is arguably the most crucial in an organisation. Lack of a healthy relationship or good communication can result in broader dysfunction. The two roles should be aligned in their view of the bigger picture, but this doesn’t mean absolute agreement – they also need to challenge one another.
Robust, effective conversations require confidence and respect from both sides. Fragile egos have no place, nor does an inability to compromise. CFOs must take responsibility for their side of the equation – for how they show up to their relationship with the CEO, how they build confidence, and the level of preparation they put in prior to meetings. The best approach involves having clarity on your expectations and a willingness to listen to other perspectives.
At its best, the CFO/CEO relationship is a true partnership with the capacity for healthy disagreement, a willingness to learn from one another, and a clear vision for the organisation's future.
By communicating effectively, CFOs can maximise opportunities to deliver value in their organisation. While the skills may not come naturally, leaning into feelings of discomfort will often yield the best results and help them move from a tactical role to a more strategic one—that of CVO.
To find out more about the evolution of the CFO, read the report and explore the rest of our CVO content series. Discover how our Business Services team can help you build resilience and adapt to today’s ever-changing business landscape – contact us today.
Chief Value Officer: The Important Evolution of the CFO copyright © 2023 by the Association of Chartered Certified Accountants (ACCA). All rights reserved. Used with permission of ACCA. Contact insights@accaglobal.com for permission to reproduce, store or transmit, or to make other similar uses of this document.