Large enterprise CFOs are underinvested in key activities and lose one day per week to the wrong activities, according to Gartner, Inc.
Gartner experts at the Gartner CFO & Finance Executive Conference discussed the differentiators of today’s personally effective CFOs, amid high levels of uncertainty and every aspect of the traditional business model undergoing rapid change. Gartner conducted more than 100 CFO interviews and assessed CFO personal performance and effectiveness across 231 attributes to ascertain what the most effective CFOs do differently with their time, relationships and teams.
“CFOs are under pressure to elevate performance across a range of job responsibilities, but our research shows attempting to ‘do everything better’ is not the answer to driving better personal effectiveness,” said Johanna Robinson, managing vice president in the Gartner Finance practice. “The two critical levers to focus on are how CFOs manage their posture and relationships within the organization and what activities they prioritize through the intentional allocation of their time.”
Gartner’s research on CFO personal effectiveness found that just 22% of CFOs were personally effective. Personal effectiveness was scored based on how well a CFO’s organization aligned to “Efficient Growth” behaviors, characterized by how willing key stakeholders and the finance team were to take risks to support long-term growth, and the CFO’s performance against CEO expectations. Detailed survey data from large enterprise CFOs revealed significant time underinvestment in key activities such as customer engagement and corporate strategy, as well as a desire among these CFOs to reallocate a full day per week to different priorities.
Three keys to drive CFO personal effectiveness
Gartner’s research identified three key areas that were responsible for driving personal effectiveness among CFOs. The personally effective CFO:
- Acts as a strategic partner to the CEO and Board – Personally effective CFOs constructively challenge their CEOs to achieve better decision-making outcomes and are open to playing many different roles within the organization, frequently stepping into previously unknown business areas.
- Exhibits a strong customer orientation – CFOs who rate highly in personal effectiveness spend more time with customers than their peers and actively seek to allocate more time to this responsibility. A strong customer focus means that personally effective CFOs prioritize their relationships with heads of sales while proactively owning pricing strategy.
- Stays connected to business performance – Time spent within the finance department was not a significant driver of personal effectiveness. Instead, the most personally effective CFOs spent more time plugged into the performance of business units. This was demonstrated through having business unit CFOs as direct reports, strong relationships with all business unit general managers and a willingness to own business unit performance-related metrics.
Action plan for personal effectiveness
“While most CFOs have not yet achieved a high level of personal effectiveness, our data shows that they are at least aware of a misalignment between how their time is spent and their stated priorities,” said Ms. Robinson. “To achieve better outcomes, CFOs can replicate many common finance leadership practices in how they approach their own personal time management.”
Gartner’s research showed that personally effective CFOs followed four common practices that allowed them to focus more time and energy on the activities most impactful to their job performance. These practices included:
- Announcing personal priorities publicly – While CFOs naturally excel at team management, personal transparency is more challenging. By announcing personal priorities to their teams and the C-Suite, CFOs can leverage greater focus from their teams, while also more easily declining requests that don’t align with their priorities.
- Practicing “zero-based” scheduling – By scheduling personal priority activities first and accounting for the time of day when activities are scheduled, CFOs can protect mental energy for their top priorities.
- Concentrating attention more often – CFOs should ensure that activities that are highly prioritized, complex or uncertain are given protected calendar time of longer durations.
- Comparing planned and actual time allocation – Just as CFOs can learn lessons from a post-audit of a major investment or acquisition, reviewing how their time was actually spent against their plan can reveal root causes of time slippage that can be better addressed in the future through delegation.
About the Gartner CFO & Finance Executive Conference 2019
CFOs and senior finance executives wanting to learn more about the trends that will shape finance, company performance and personal leadership are attending the Gartner CFO & Finance Executive Conference 2019, being held June 10-11 in Washington, D.C., U.S. Follow news from the conference on Twitter at #GartnerFinance.
About Gartner for Finance Leaders
Gartner for Finance Leaders helps senior finance executives meet their top priorities. Gartner offers a unique breadth and depth of content to support clients’ individual success and deliver on key initiatives that cut across finance functions to drive business impact. Learn more at https://www.gartner.com/en/finance/finance-leaders.