As an executive search professional specializing in chief financial officers, Dave Arnold used to reach out to “60 to 75 potential candidates to pull a slate of 5 to 8 for my clients.” Fast-forward two years to the present, and those numbers have increased to 140 to 160 candidates.
The problem isn’t just that “passive” job candidates don’t want to uproot. It’s that healthcare clients have gotten a lot more particular about their CFO candidates. The need today is for true financial leaders, strategic partners to the CEO.
“On the one hand my clients are looking for very operationally-oriented CFOs,” says Arnold, principal of Arnold Partners. “That means they are looking for a financial leader that can provide guidance and direction for the entire organization. They are not a backroom accountant. They are not merely a Wall Street-facing investor relations person. They are really integrated into the organization. They are leading by example, and they are leading by providing services to the business.”
“On the other hand, there is a focus on the role of the CFO as a conduit for fundraising,” Arnold explained, a role that many CFOs in healthcare must increasingly fill.
The stuff of great leaders
But what exactly defines a CFO leader?
For Arnold, “First I think of someone that has gravitas. By that I mean a presence that encourages people to follow – a person who is able to take a difficult stand on an issue and stand their ground when the going gets tough. Often, the CFO is the one person in an organization that may have to adopt a contract vision in order to put a balance on what may be a euphoric idea.”
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“It is the CFO’s job to rationalize those ideas and make sure they are the right ones,” Arnold continued. “A great CFO is able to do that in a way that doesn’t turn people off. It’s an art to be able to say, ‘No, we’re not going to do that.’ A CFO has to be the voice of reason in the room.”
That is where the role of strategic partner also comes in. A CFO leader doesn’t have to be a visionary, but they do have to be a “vision enabler.”
“Usually the vision comes from the CEO or the board of directors as to what the organization is trying to be,” Arnold explained. “The CFO is there to rationalize that and finance that, to execute on the strategic plan, and contribute to it also. I think of the CFO as more the executor of strategy rather than the creator of strategy, although there certainly are some cases where the CFO is playing a very important role in creating strategy.”
From bean counter to strategic thinker
One healthcare CFO that spends the lion’s share of her work week in strategic matters is Robin Norman, senior vice president and CFO at Virginia Hospital Center in Arlington, Va.
Norman has been in the role of CFO for 16 years at Virginia Hospital Center, and has logged 35 years total with the organization. In fact, other than a brief job at a wholesale drug firm straight out of college, “this has been my career,” she said.
Norman agrees that health systems increasingly want the CFO to “raise their game” and be a true strategic partner to the CEO.
“I tend to spend more of my time on strategy than I do on day-to-day finance things,” Norman confirmed. “Fortunately I have a good team and they make sure that the finances are good. I certainly spend time with them, but it’s much more about strategy.”
Most top-level strategic decisions tend to be made by the executive team of the CEO, the CFO (Norman) and the chief medical officer.
Skills and qualities that set leaders apart
Norman has explicit ideas about the skills a CFO needs if they want to be a true leader.
“I would start with the ability to teach and educate,” Norman explained. “They need to be able to explain finance to a lot of people for whom it is not their forte. They have to be able to do it in everything from a one-to-one setting to a board meeting or public presentation. Teaching and presentation skills would be number one, followed by working as a team member and understanding the bigger mission and how finance fits into that.”
Next on the list: commitment and compromise.
[See also: The power of presentations: CFO tips.]
“To be a leader you have to be a quick study, and you have to be willing to compromise for the greater good. What is best for you and your department may not be best for the organization,” Norman said. “And you have to be willing to sell those decisions – and whether you completely agree with them or don’t completely agree with them should never be obvious to anybody you are talking to.”
Norman confirms that not all CFO or finance managers have the right stuff to be leaders.
“Not everyone is a leader. I have very skilled people that probably wouldn’t make the best CFO even though they are very talented and very knowledgeable about the industry,” Norman said.
But for those that do have what it takes, having leadership qualities can put a finance manager on the fast track to career advancement, perhaps even to the very top, Norman said.
“I think it is very possible to move from the CFO to a CEO role,” Norman concluded.