A strict CFO could be bad for business

|October 15, 2015 0
Image courtesy of Stuart Miles at FreeDigitalPhotos.net

BANGALORE, INDIA: How and why Chief Financial Officers(CFO) advocate technology investments to support business operations can vary according to their own personal leadership style, unveils a new global study by Epicor Software Corporation.

Based on survey respondents’ answers to a series of questions about their own personal decision-making style, the study found CFOs fall into six distinctive groups of financial decision makers: Politicians (27%), Revolutionaries (19%), Carers (19%), Conductors (16%), Traditionalists (9%) and Visionaries (9%).

The study found that CFOs who were characterized as Revolutionaries were tied to companies that had the greatest profit growth(profit increases experienced by 72% of Revolutionaries vs. 64% sample average) whereas those CFOs characterized as Traditionalists were tied to companies that had the least profit growth (profit increases experienced by 56% of Traditionalists vs. 64% sample average).

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Traits Exhibited by the six CFO Leadership Styles

Traditionalists— traditional, strict CFOs prefer to work within existing systems and prefer not to be influenced by reputation and personalities when making decisions — were the least likely of all the personas to acknowledge any need for change when it comes to technology systems (only 14% of Traditionalists believe their business IT systems should be updated, compared to the poll average of 32%).

Alternatively, Revolutionaries are happy to consider changing corporate culture and structures if the need arises and they like to set tough and challenging goals. They take a less structured approach and often work outside of formal systems and processes, taking risks where necessary.The survey reveals that they are more critical of the IT that supports finance than any other CFO personas– 48% of Revolutionaries say the IT support they get is inadequate – a sentiment shared by only 36% of their peers. This may be a sentiment stemming from their “maverick” style of improvising and sourcing data from other means outside of business systems.

The Politician is the most common CFO working style of those polled — with over a quarter (27%) of CFOs falling into this persona. The politician is a more cautious leader with a methodical, team-based approach. Politicians like to consult widely with staff on important decisions and would rather delay a decision than risk mistakes. They are more likely than average to believe that collaboration is a key challenge that needs addressing (27% vs. 22% sample average), so likely would be most supportive of investments in technology to address organizational collaboration.

The Conductor likes to set tough, challenging goals for themselves and their staff. Conductors are also happy to bend the rules and work outside of formal systems and processes, and are more likely to make decisions based on gut-feel rather than hard data (54% vs. 46% sample average). Conductors report having an average level of satisfaction with their IT systems, and are most likely to say their system is easy to use (35% vs. 30% sample average). In theory, this may be because they are less likely to demand business systems provide drill down/detailed information and are content to work with summary/overview type information.

The CFO Carer persona would rather delay a decision than risk mistakes. The survey shows one of their greatest concerns is lack of accurate data (52% of Carers vs. 44% sample average identify it as one of their top two priorities). According to the survey, Carers fretthe lack ofquality information on the financial performance of individual product lines (only 48% feel they have good information vs. 57% sample average).

The Visionary works outside of formal systems and likes to make decisions based on experience and intuition. They fear not having the time or resources to surface meaningful insights (26% vs. 18% sample average) and embrace change.Visionaries are more likely than their peers to envision needing more team-based decision making in the future (23% of Visionaries vs.14% sample average).They are more resolute in the need for change in IT systems in the near future; (41% of Visionaries believe their systems need updating vs. 32% sample average). Some 27% believe they should invest in a new system soon (vs. 17% sample average).

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