We’re not talking about damages such as people stealing from the cookie jar or number leaking.
It’s actually shown by the research from business software provider Epicor, which surveyed financial leaders in 11 countries, that strict traditional CFOs could be holding your business back from progressing.
The downfall of Tesco will have been a major wake-up call for business across the country, and indeed the world, as the supermarket has spent the past year recovering from severe financial injuries.
Reporting a £6.4bn loss in April 2015, the worst in its 96-year history, the firm has fallen into the realm of the worst financial scandals of the past 15 years.
Of course, British leaders will want to avoid such disaster striking and they may have felt compelled to breathe down the necks of finance departments and CFOs for a spell.
So who is really leading the financial departments of the world’s businesses, and are they tech-savvy or do they just do what their gut tells them
It turns out the six distinct groups they can be defined by include:
1. Politicians 27 per cent
At 27 per cent, the politician is the most common type of CFO, according to the study. Described as possessing a cautious and methodical team-based approach, politicians consult widely with staff for big decisions and would rather delay instead of experience a mistake. Additionally, they’re more likely to believe collaboration is a challenge that needs to be addressed, ahead of CFOs overall.
Read more on the financial leaders:
- CFOs embracing leadership skills can head for the top
- Diluting grey hair to create the next generation of finance leaders
- The role of the FD and its power to influence the board
2. Revolutionaries 19 per cent
The revolutionary CFO is happy to embrace changes in corporate culture and structures when required, while they also welcome the introduction of tough goals. Given this, they’re also happy to adopt a less structured approach to their work and look beyond formal systems and processes. Interestingly, revolutionaries were found to be linked to the companies with the largest profit growth compared to all CFOs.
3. Carers 19 per cent
The carer would sooner push back on making choices instead of rushing ahead and failing. The biggest concern among this group is a lack of data accuracy, as they tend to worry that they don’t have enough solid information on the finances of product lines.
Continue reading on the next page to find out more on the remaining three CFO types and the implications for businesses.
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4. Conductors 16 per cent
Conductors will bend the rules and look beyond traditional systems, while they’re more likely to rely on their gut feel and instincts instead of basing choices on solid data before them. Perhaps that’s why the group has an average satisfaction level when it comes to IT systems, as they’re content to use summarised overviews instead of detailed data. They also like to challenge themselves and staff.
5. Traditionalists 9 per cent
The traditional CFO is considered strict and rigid. They would prefer to operate without influences from additional reputations and personalities, unlike other CFOs that like to embrace the feedback of others. Traditionalists are also the least likely to change the technology used for their systems as just 14 per cent believe their IT could be updated, compared to 32 per cent of overall CFOs. The study also found the group experiences the least profit growth when compared to the others.
6. Visionaries 9 per cent
In contrast to traditionalists, you have the visionaries. This group likes to use experience and intuition to get the job done, which is likely a result of them fearing they don’t have the resources or time to change and generate meaningful insights. Interestingly, they’re also more likely to think team-based decisions will be used more in the future and they’re also more eager to update their software and make investments.
The time to update business systems is before the organisation outgrows them and before they start to erode the operational and financial health of an organisation,” said Malcolm Fox, VP of product marketing for Epicor.
To this end, it’s not surprising Traditionalists who were the least likely of all the CFO personas to acknowledge any need for change when it comes to technology systems also tended to lead companies that were experiencing less profit growth than other CFOs in their peer group.
Dimitrios Tsivrikos from the psychology and language sciences division at University College London, added: The preference for traditional CFOs to work within existing systems and disregard the need for change stems from a lack of flexibility and a high need to achieve, and [often] leads to a top-down decision-making process.
This has implications for business change and innovation; new ideas that are suggested by employees are not likely to be taken on board and the businesss ability to change and adapt is reduced. CFOs need to take on new perspectives and be open to novel ways of doing things. This will allow them [and their businesses], to find optimal and creative solutions to problems, which will in turn foster innovation.
