Succeeding As A New Cfo Keys To The First 100 Days

Succeeding
as a new CFO
Keys to the first 100 days
© 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. This presentation, including all supporting materials, is
proprietary to Gartner, Inc. and/or its affiliates and is for the sole internal use of the intended recipients. Because this presentation may contain information that is confidential,
proprietary or otherwise legally protected, it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.
Onboarding challenges
CFO orientation programs exist

at only 9% of companies
9%
Incoming executives are not formally
onboarded to their new role. Yes
No
91%
2 | © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates.
Onboarding challenges (continued)
One new-to-role CFO in every three struggles most with business partnership
Incoming executives face similar obstacles.
37%
26% 26%
16%
5%
Building a working Getting up to speed on Communicating with external Managing the finance Managing difficult
relationship with business operations stakeholders function financial or
leadership team governance
situations
New-to-role CFO checklist
1. Mastering the role and managing key relationships 3. Defining a vision for the function
Expected time frame: First 30 days Expected time frame: After 15 days
§ Develop intimacy with operations to understand the § Review functional best practices to define end states for
industry’s value chain, company’s business model and changes in key functional capabilities
internal power structures; build rapport with senior § Determine finance function’s capabilities
executives and meet with key shareholders to discuss § Establish finance’s critical mission statement
organization’s strategic and long-term growth prospects
§ Map company and industry value chains 4. Assessing staff capabilities
§ Identify internal stakeholders’ expectations Expected time frame: After 30 days
§ Maintain regular meetings with leadership § Analyze finance skills gaps to identify readiness for change
and an optimal change management style
§ Maintain proximity with strategic investors
§ Conduct skills gap analysis
2. Focusing on critical activities § Identify direct report role expectations
Expected time frame: After 60 days
§ Make difficult time allocation trade-offs to ensure focus on
the activities that will add the most value
§ Evaluate personal time allocation across all responsibilities
§ Aggressively delegate less-value-added activities
Roadmap
Mastering the Focusing Defining a Assessing

role and on critical vision for staff
managing key activities the function capabilities
relationships
Gain a better picture of the business
Potential sources of information
Internal sources External sources
Interviews with senior executives Engaged consultants

Expertise: Expertise:
§ The company’s current and future strategic § Existing business execution problems
direction § Components of the organization’s new strategy
§ Expectations about the CFO’s role § Management style of the CEO and other
Line/business unit visits senior executives

Expertise: Line/business unit visits
§ Project-specific knowledge Expertise:
§ Practical view of business process § Brand image
§ Understanding of company value drivers § Corporate commitment to quality and service
§ Organization’s technical and operational capabilities
Gain a better picture of the business (continued)
To serve as a strategic partner Finance’s involvement in selected functions

across the enterprise, CFOs
must gain critical business Strategic opportunities identification
insight and on-the-ground CEO Review environmental intelligence and

current capabilities to identify innovative
perspectives of the growth opportunities
organization’s value drivers.

HR Sales Operations R&D Quality Marketing
Sales support Complexity and experience management Business and ROI case creation
Collaborate with sales teams to identify areas ■ Review current product offerings to identify measurement
of best leverage (i.e., contract terms, pricing) opportunities for streamlining and creating ■ Review current product offerings to identify
for finance’s involvement and where decision product platforms opportunities for streamlining and creating
support tools are needed product platforms
■ Collaborate with frontline operations to deliver
finance decision support ■ Collaborate with frontline operations to
deliver finance decision support
Build internal relationships
CFOs must focus on Most important development Most important development

developing their internal area: New CFOs area: Tenured CFOs
network of colleagues in order
to gain operational intimacy. 25% 34% 15%
Internal relationship Operational Finance function
management business management
knowledge
35% 5%
Operational
business External relationship
knowledge management
35% 6% 45%
External relationship Internal relationship
Finance function management management
management
Strengthen finance’s partnership with the line
CFOs should focus on supporting Finance vs. line responsibilities at DataCo (a company that wishes
GMs to drive growth and incent to remain anonymous)
and institutionalize value-creating
finance practices at the line.
Unique finance roles Joint responsibilities Unique line roles
§ Budget preparation § Sales growth of XX% § Improved efficiency
§ Management reporting § EPS growth ofXX% § Market share
§ Decision support for § EBIT improvement of improvement
the line XX% § Identifying acquisition
targets
DataCo’s approach
Traditional finance challenge DataCo’s solution
CFOmeetings with GMs limited to review of Initiate strategy-centered meetings

financial performance with GMs
Finance provides input to line reviews but does not Finance assumes responsibility for actual
take ownership of follow-up execution steps implementation steps arising from the strategy
meetings
Build intimacy with operations
Exceptional* CFOs set aside Meet weekly or biweekly with GMs proactively seek CFO’s
GMs to discuss performance advice on business issues
more structured time to meet with Percentage of global CFOs Percentage of global CFOs
their GMs and are more likely to
be sought for advice.
To maintain a positive tone with
82%
GMs early-on in their tenures, new
41% 65%
CFOs should maintain mutually
beneficial interactions with the
business on a regular basis. 19%
Other CFOs Exceptional CFOs Other CFOs Exceptional CFOs
n = 17 n = 17
*"Exceptional” CFOs were selected based on: tenure of >10 years; delivery of positive relative industry TSR during their tenure; nomination by their peers.
Build intimacy with operations (continued)
Practices from Exceptional CFOs

§ Capture the cross-functional perceptions of finance support to the enterprise to help:
– Understand internal customers’ priorities for the finance function
– Assess corporate finance’s performance in serving internal customers
– Target areas of misalignment for improvement
§ Elevate your interactions with BUs beyond performance appraisal, to facilitating

identification of, and execution against, the BUs’ most pressing opportunities
§ Leverage your “seat at the table” and avoid adding complexity and duplication of efforts
by clearly understanding how finance can add value when interacting with the BUs
§ Create occasions to help GMs identify opportunities in each other's businesses
§ Beyond identifying opportunities for stretch, help BUs establish action plans to execute
against performance opportunities
Set the agenda for CEO interactions
New CFOs who have less time Number of hours per month Most commonly discussed
with CEO topics with CEO
with CEOs (in comparison with
Percentage of respondents selecting the top 3
tenured CFOs) must maximize the
value of their meetings.
New CFOs must proactively drive 22
89%
13
Business
conversations with the CEO to performance
78%
15
Formal reviews
strategic issues by outlining and
70%
proposing key topics they wish to 10 Strategic
planning 33%
Formal
discuss prior to regularly scheduled
9
Corporate
66%
meetings. Informal
financial
position 50%
5
5
Informal Corporate 23%
governance
Tenured CFOs New CFOs issues 28%
Tenured Board of 23%

director
New issues 50%
n = 16 tenured CFOs; 9 new CFOs
Set the agenda for CEO interactions (continued)
Practices from Exceptional CFOs
§ Set formal agendas for your regular CEO meetings that always include time
reserved for discussing nonfinance business issues
§ Meet regularly with your GM peers to discuss their strategy and business outlook,
and provide different perspectives to your CEO
§ If your CEO is looking to delegate, ask for responsibility for things that are more
operational in nature, such as strategy, corporate development — or a business
unit — rather than more administrative functions such as IT or procurement
Bridge information gaps
CFOs’ proximity to investors Performance information flows

provides an information
advantage, while their distance Investors Information Performance Leadership
inputs viewpoint action
from customers creates an
information disadvantage.
§ Investor preferences How will investors value Provide a
Key observations: Board
CFO § Financial market trends our choices? What risk- valuation-driven
§ Financial perspective vs.-return trade-offs performance
§ CFOs compete for CEO mindshare on risk vs. return should we make? viewpoint
with many constituents who have

different points of view on General
■
■
Market trends
Execution risks
What are the growth
bets and performance
CEO
performance. managers ■ Customer needs risks in the business?
Bolster your
relationships with
§ CFOs bring a unique perspective line executives to
because of their proximity to What choices ■ Customer needs Where are our sales get real-time
will drive Head of Competitive intelligence trending? access to trends
investors and the financial markets. shareholder sales
■
value?
§ CFOs are further from customers,
hindering their ability to connect trends
with operational realities without
Customers
partnership from other executives.
Manage critical relationships
Exceptional CFOs spend more Average percentage of CFO time allocation to

time with the CEO, GMs and each constituency
investors.
20%
Exceptional CFOs
Other CFOs
18%
15% 16%
12%
9%
CEO Operations Investors

n = 70 CFOs
Roadmap

relationships
A crowded agenda
CFOs are spending a Average percentage of CFO time allocation to

significant portion of their each constituency
time driving business and
enterprise performance. 9% BU performance management
Other 16% ■ BU forecast updates and replanning
BU performance management
12%
■ Forecast to actual variance reviews
■ Operating risk management
IR
■ Capital project life cycle reviews
■ BU costing and allocation decisions
■ Differentiated metrics and dashboards
Customer/product-level target cascade
9%
■
Board 22% ■ Scenario planning for each business
Enterprise
5%
performance Enterprise performance management
management
■ Strategic planning
IT
■ Liquidity planning and capital budget allocation
11% ■ M&A and divestiture screening
Talent 16% ■ Planning for the next phase of the cycle
Finance ■ Managing investors’ and board’s expectations
■ Orgwide stretch target setting and incentive alignment
n =120 ■ Strategic growth project management
Decision rules for managing the span of control
Finance executives 1. Focus your time on high-variability, high-impact decisions

must make principled
While administrative process improvements certainly provide cost and efficiency
choices about where to gains, operational execution is a greater determinant of long-term competitive
invest their time and success. Furthermore, the cost of failure for bad operational decisions is high, but
energy to create the for administrative decisions is low.
most value for the
enterprise. 2. Execute the change, then hand it over
CFOs may need to lead nonfinance departments during periods of centralization
and streamlining, but should not do so permanently. Develop a long-term plan for
the function that includes a handoff to a capable new owner.
3. Task specialization matters

Organizations should consider investing in a COO/CAO position, rather than dilute
the effectiveness of the CFO by increasing administrative span. Build the business
case for a COO or CAO by measuring the opportunity cost of your time spent on
administrative activities.
Proactively guard your priorities
Exceptional CFOs redirect

1. Set firm guardrails around your 2. Continually review your span of
administrative responsibilities
responsibilities control with the CEO
and regularly review the
effectiveness of the span of
control with the CEO. Action Action
CFO agreed to have procurement The CFO and CEO meet every three
report to him for a set period of time, months to review the CFO’s top 10
but refused full-time responsibility for priorities and discuss whether the
both procurement and facilities. CFO’s span of control is limiting his
ability to focus on these priorities.
Outcome Outcome
The organization created a director The CEO has agreed to continually
position responsible for procurement, revisit IT reporting to determine if it
facilities and small-country operations. interferes with the CFO’s priorities.
View of the finance function
CFO
1. Corporate center technical 2. Distributed judgment- 3. Standardizable rules-

expertise based activities based processes
Activities ■ Treasury ■ Decision support ■ Accounts payable

■ Tax ■ Planning and analysis ■ Accounts receivable
■ Accounting ■ Strategy evaluation ■ Payroll
■ Performance diagnosis ■ Management reporting
Staff characteristics Technical finance practitioners in Embedded senior staff* selected Process-focused staff
corporate center for critical thinking, influence skills (increasingly) in shared-service
and business acumen centers
Finance Provide assurance Drive value Reduce cost

goal (Centralize, recruit experts, (Invest, train, improve impact) (Centralize, streamline, digitize,
provide oversight) outsource)
*Finance staff in dedicated roles who provide finance analytical support to managers in business units, other functional areas or product lines
Seek a more leveraged role for the CFO
The CFO at SoftwareCo CFO involvement in selected activities

(a company that wishes to
remain anonymous) Own Contribute Delegate Ignore
■ Daily dialogues with ■ Growth opportunity ■ Project sponsorship to ■ Excessively
deliberately structures his CEO identification various senior detailed initiative
involvement to capitalize Barometer of capital executives planning
■ ■ Press releases
on his expertise and to markets’ reactions ■ Meeting ■ Creating
■ Communication
optimize his impact on ■ Prioritizing and strategies ■ Agenda standardized,
growth. sequencing projects ■ Customer relationship ■ Active management
comparable
scorecards for all
■ Ensuring alignment strategies of planning process
projects
between initiative and ■ Product development alignment to SVP,
regular planning strategic finance ■ Memo staffing
■ Employee development
planning personnel
■ Scorecard-creating
coordination
framework for ■ Committee participation
measuring and ■ Blind inquiries
■ IT operations
monitoring
■ Killing underperforming
projects
Leave finance to finance
Exceptional CFOs delegate Average percentage of CFO time allocation to each constituency
fewer value-added activities
and spend less time with 38%
finance than their 30% Exceptional CFOs
counterparts. Other CFOs
Finance organization
10%
9%
8% 8%
6% 6%
5%
4% 4%
3% 3%
2%
Controller Treasurer Tax director Head of IR Head of FP&A BU CFO
Roadmap

relationships
Align finance’s mandate
While the CFO role has Divergence between the expectations for CFOs and their finance teams
evolved to value creation,
the finance team lags
behind this evolution.
CFO as financial steward CFO as chief performance officer
To ensure that finance High

CFO’s mandate
s § Inflecting enterprise
effectively supports its rC
F O
performance
fo
mandate, new-to-role CFOs t at
i on
s
§ Influencing company strategy
ec
must begin by defining a clear g
ex
p § Providing strategic support
i s in for the board and CEO
vision and direction for the ar
ds
ra
Expectations
bo Finance staff tasks
finance organization. for driving
value creation s an
d
§ Conducting data
O
CE analysis
§ Implementing process
nce staff
ectations for fina
CFOs maintaining exp improvements
§ Providing internal customer
support
Low
Time
Finance as accountants Finance as process improvers
and data analyzers
Define finance’s vision
New-to-role CFOs should Sample value-added finance mission statements

ensure that their finance “We are leaders and financial business partners that power decisions and drive value for the organization
organization’s existing through the successful execution of our strategies.”
mission statement captures “Influence the right business decisions to exceed competitors’ growth in shareholder value and
their strategic vision and cash flow:
§ By providing innovative and actionable information and performance reporting and quality financial and
provides direction for the
information services; and
function. § By being a good business partner.”
“To be a value-added partner to our business customers by assuming responsibility for corporate
governance and risk matters and for the delivery of strategic, performance management, and
transaction processing services at both the corporate and business unit level.”
“Our mission is to positively contribute to our company’s business development. By ensuring relevant and
reliable information on a timely basis and through the realistic assessment of opportunities and risks, we
are committed to securing the company’s integrity. In order to achieve this:
§ We focus our activities on those issues promoting the company’s future success. We give business
recommendations by our own initiative;
§ We increasingly work with and in projects rather than adhere to fixed organizational structures; and
§ We implement the consistent comprehension of project management and train the necessary skills.”
What makes a finance challenger?
To add value and inflect Critical components of the new high performer A finance challenger:
business performance, § Comprehends the root causes of business
finance must focus on impacts and teaches these to the business
challenging the Teach § Engages in microeconomic
for differentiation discussions around macroeconomic
business’s assumptions issues
and decisions rather than § Provides strong analytics around profitability,
building relationships and P&L, etc.
resolving conflicts. § Creates healthy debate with business
Tailor for Assert partners on critical decisions by playing
resonance control devil’s advocate and other roles to pressure-
test ideas
§ Installs financial rigor into project
performance reviews
The new high performer

§ Reassesses business partners’
preconceived notions of success
Teach: Reframe the way business partners view their business and their needs to
set yourself apart in the market.
Tailor: Link your capabilities to business partners’ individual goals to overcome
specific barriers to purchase.
Assert control: Openly pursue goals in a direct, but not aggressive, way to
overcome increased business partner riskaversion.
Roadmap

relationships
Deliver on critical finance skills
Finance’s mandate Finance function organization activities and competencies

highlights the need for
both technical and soft Finance function
skills across finance staff.
Decision support roles Planning and Shared-service
Specialized services performance Decision support
typically require greater management
centers
business knowledge, Enterprise planning Accounts payable Business development
■ Tax ■ ■ ■
as well as negotiation,
Sample
activity
■ Treasury ■ Accounting ■ Billing ■ Competitor analysis
Budgeting Payroll M&A support
communication and critical ■ SEC reporting ■
Forecasting
■
Inventory management
■
Pricing strategy
■ Internal controls ■ ■ ■
thinking skills. ■ Product development
New CFOs should also

■ Accounting ■ Operational reporting ■ Cost and management ■ Critical thinking
emphasize technical skills
competencies
Auditing P&L analysis accounting Communicating

Required
■ ■ ■
development to avoid skills ■ Financial reporting ■ Customer profitability ■ IT management ■ Enterprisewide analysis
■ Cash management ■ Statistics and modeling ■ Process excellence ■ Negotiating
gaps in staff that are in ■ Corporate finance (e.g., Six Sigma) ■ Operational knowledge
traditional roles such as

accounting and audit. Technical skills Soft skills
Assess finance bench strength
To determine organizational Finance bench strength assessment

skill level within finance, The bench strength assessment evaluates the leadership skills and potential of all finance staff at the manager level and
ProductCo (a company that above. Each form is completed by the individual’s direct manager based on15 standard criteria that evaluate staff’s
technical and soft skills. HR then compiles individual survey results and presents a total picture of skills strengths and
wishes to remain anonymous) development areas for the finance organization.
maps the existing and

Leadership skills: Rating (0 – 10) Business skills: Rating (0 – 10)
required skill set to execute
Visionary leadership Growing the business
the CFO’s stated mission for Delegation/sharing responsibility Strategic thinking and execution
finance. Coaching/helping others grow Business/financial acumen
Building an effective organization Operational decision making
This exercise focuses on
Change leadership Managing multiple priorities
assessing the talent base Interpersonal skills/personal attributes: Rating (0 – 10) Technical/professional skills: Rating (0 – 10)
across the entire finance Building business relationships Applying technical/professional knowledge
function rather than the Communicating with impact Proficiency within discipline
development needs of Championing diversity Level of formal education

Drive for results Work experience withindiscipline
individual employees.
Skills evaluated move beyond traditional
finance competencies and emphasize
“impact” skills.
Contact us
Phone: 1 866 913 8102
Email: financeleaders@gartner.com
Web: gartner.com/go/finance
© 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. This presentation, including all supporting materials, is
proprietary to Gartner, Inc. and/or its affiliates and is for the sole internal use of the intended recipients. Because this presentation may contain information that is confidential,
proprietary or otherwise legally protected, it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.

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Succeeding

CFO orientation programs exist

Mastering the Focusing Defining a Assessing

Internal sources External sources

Interviews with senior executives Engaged consultants

Line/business unit visits senior executives

To serve as a strategic partner Finance’s involvement in selected functions

insight and on-the-ground CEO Review environmental intelligence and

organization’s value drivers.

CFOs must focus on Most important development Most important development

CFOmeetings with GMs limited to review of Initiate strategy-centered meetings

Other CFOs Exceptional CFOs Other CFOs Exceptional CFOs

Practices from Exceptional CFOs

– Understand internal customers’ priorities for the finance function

– Assess corporate finance’s performance in serving internal customers

– Target areas of misalignment for improvement

§ Elevate your interactions with BUs beyond performance appraisal, to facilitating

§ Create occasions to help GMs identify opportunities in each other's businesses

Tenured Board of 23%

n = 16 tenured CFOs; 9 new CFOs

Practices from Exceptional CFOs

CFOs’ proximity to investors Performance information flows

with many constituents who have

Exceptional CFOs spend more Average percentage of CFO time allocation to

CEO Operations Investors

Mastering the Focusing Defining a Assessing

CFOs are spending a Average percentage of CFO time allocation to

Board 22% ■ Scenario planning for each business

Finance executives 1. Focus your time on high-variability, high-impact decisions

3. Task specialization matters

Exceptional CFOs redirect

1. Corporate center technical 2. Distributed judgment- 3. Standardizable rules-

Activities ■ Treasury ■ Decision support ■ Accounts payable

Finance Provide assurance Drive value Reduce cost

The CFO at SoftwareCo CFO involvement in selected activities

counterparts. Other CFOs

Controller Treasurer Tax director Head of IR Head of FP&A BU CFO

Mastering the Focusing Defining a Assessing

To ensure that finance High

New-to-role CFOs should Sample value-added finance mission statements

The new high performer

Mastering the Focusing Defining a Assessing

Finance’s mandate Finance function organization activities and competencies

thinking skills. ■ Product development

New CFOs should also

Auditing P&L analysis accounting Communicating

traditional roles such as

To determine organizational Finance bench strength assessment

maps the existing and

development needs of Championing diversity Level of formal education

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