De-risking the ‘New FD’ with the Appliance of Science
Whilst much has changed since The Seven Hats of the FD was published (ICAEW, 2011), its key themes still resonate. The authors sought to foresee how the role of the Finance Director would evolve as well as how the individual skill set, profile and characteristics would need to change to meet these new demands. In summary, they argued the ‘New FD’ should be a:
- Storyteller: Creator of a clear narrative for internal and external audiences.
- Co-pilot: Partner to the CEO with a complementary skill set.
- Magistrate: Arbiter of disputes and enforcer of the law.
- Consigliere: Trusted counsel offering advice at the highest level.
- Engineer: Master of processes and systems; architect of business models.
- Muse: Promoter of fresh thinking and value-enhancing decisions.
- Rescue service: Identifier of problems and presenter of solutions.
Similarly, Dun & Bradstreet released a study in 2017 entitled The Evolution of the Modern Finance Leader, which supported the trends noted in a recent Norman Broadbent Group White Paper. In summary, Dun & Bradstreet noted the following:
- Great Expectations: The face of finance is changing at a rapid pace.
- Under Pressure: Finance leaders are under pressure to do more with less.
- Smarter Decisions: Finance leaders must fuel growth with data.
- High Risk: Finance Leaders face the danger of conflicting priorities.
In effect, Dun & Bradstreet argue that today’s Finance Directors are not handing over financial guardianship, but are being asked to do more to contribute to business growth. Many would argue this is nothing new; however, the message is ‘less time spent down in the weeds and more time looking ahead’. Finance Directors have to become more comfortable with uncertainty, drive change and be more accepting of radical solutions. Naturally, no one is advocating a complete reversal of their instinctive conservatism, however there are clearly occasions when a ‘low-risk/no-risk’ default position may not be best.
Alongside technical acumen, commercial and leadership intelligence are critical in ensuring Finance Directors play the combined roles of strategist, operator, leader, steward and catalyst for change. With these increasing demands, it is becoming more challenging for businesses to find the right mix of skills, attitude and competencies when appointing a Finance Director. Boards find it difficult to prioritise which competencies are most critical to business success and even when they do, assessing candidates based solely on the most rigorous interview process is far from perfect.
Due to the many challenges associated with recruiting a Finance Director, many businesses (and recruiters) often simplify the process by interviewing individuals with appropriate experience, shortlisting candidates based on personal ‘fit’. For an increasingly complex and demanding role, this is a flawed process that can lead to poor hiring decisions. More sophisticated businesses have integrated assessment not only into their recruitment process, but also for future development and succession planning purposes. This means forward-thinking businesses are increasingly using assessment when appointing Heads of FP&A, Financial Controllers, Finance Managers, Finance Business Partners and other senior finance roles.
At Norman Broadbent Solutions, we ensure Psychometric Assessment is a key part of our Search methodology. Using our in-house expertise, we deploy the most optimal Assessment approach. Typically, 2-3 candidates are taken through an Assessment process to remove subjectivity and help optimise hiring decisions. Even where the best candidate for the role is clear, Assessment is helpful in identifying and confirming developmental areas before an employee starts work.
Norman Broadbent Consulting routinely reviews existing and developing Finance Directors for both selection and development. The issues mentioned above – the increasing need for Finance Directors to proactively drive change, to show great resilience, to possess enhanced influencing skills, and the need to take a much broader view of the business and commercial context – are all features we can measure and benchmark. Given that many of our clients have to do more with less, meet year-on-year increases in professional requirements and are faced with increasingly complex commercial choices, the need for effective talent management is more prevalent than ever before.
If you would like to find out how The Norman Broadbent Group can help your organisation, please contact Wayne Poulton, Director, Norman Broadbent Solutions or Stephen Sloan, Managing Director, Norman Broadbent Consulting, for an initial confidential discussion.
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