In order to be seen and trusted as the "deputy CEO," regardless of company size or industry, CFOs must be consistent, strategic partners to all department heads, finance leaders said Thursday in a virtual panel as part of the MIT Sloan CFO Summit.

"At any company, the CFO needs to drive strategy, but also keep the company on track with its investors' and board's goals,'' Ken Gayron, CFO and senior vice president of Avid Technology, said on the panel. "The CFO and CEO see everything across the business, and the CFO needs to view everything through a financial and strategic lens."

CFOs, Gayron said, while accountable for financials, must also consider revenue and profitability from the point of view of each separate team.

"It's not all about cutting costs," Gayron added. "Think about why customers are buying your products, and who will grow more, given what you've seen in the market."

Gayron believes all CFOs should partner with their sales teams, whether formally or informally. "You need to be an open and transparent partner with sales," he said. "Your role is to get the highest revenue, but you need to partner because you can't just increase price; it takes time."

CFOs also have to make careful investments to keep customers, which requires understanding a customer's life cycle with the company, and putting money in different buckets, including R&D, talent acquisition, and any high-growth areas. "We all want to grow revenue and all want to profit," Gayron said.

"We, as CFOs, need to understand the cost drivers of our products," Juliana Litterio, CFO of Thermacell Repellents, said. "What's pleasing the consumer and what's not? We also must understand the supplier relationship, because the CFO can have an important seat at that table. It's a good opportunity for us to be the bad cops when the day-to-day team is the good cop."

"Getting involved with sales, and understanding market-facing business is absolutely critical," Sean Marsh, CFO of Appcast Inc. said. "An approach I've taken is communicating with a really good set of customers who I can help sell to, and then grow with the company's vendors." 

Non-traditional skills

Rebecca Morrison, vice president of finance and operations at Lola.com, an expense and travel management software company, says being the right-hand person to the CEO comes with the small start-up territory. 

"By leveraging our own technology, I can streamline our close processes, which ultimately ends up putting data in the hands of our customers quicker," Morrison said. "Additionally, the finance team owns the data stack, so I've hired nontraditional finance skills, like someone with sequel coding skills rather than Excel skills."

By centralizing operations and data within finance, Morrison and her team can spring into action and decision-making, instead of disputing who has the right information, she said. 

"The company invested in the infrastructure that gives everyone access to the data, and effectively, that means finance is no longer its gatekeeper," she said. "Business leaders all have access and can drive their own insight. [My team] is used more as a source to help them do further analytics, but we're no longer the gatekeeper, which lets me be more strategic."

Seat at the table

The panelists also discussed the process of convincing their CEOs to give CFOs a seat at the table in developing their strategic projects.

"Your job is to run a top-tier finance and accounting team," Gayron said. "But as you develop that, and the CEO has confidence in you, you can start coming up with ideas and solutions in other areas. Think out of the box, make the CEO say, ‘Wow, I've got a team player here who does his job, and has a strategic mindset to help grow the business, and he's got a team below him that'll help him scale.' Having a great team below you to rely on gives you time to do other things."

Vice president and managing director at the Association of International CPAs, Ash Noah, prioritized the "Three C's" of earning a CEO's trust. The first is capacity, which he defines as making time and investing in side projects that advance the company's mission. This leads to the second C, competency, which is earned by balancing CFO duties with out-of-the-box thinking. This culminates in the third C, credibility, which is when the CEO trusts you to help him or her strategically lead the business. 

"It comes down to a willingness to solve a problem differently," Morrison added. "How do we use tech? How do our peers? Think about hiring a different skill set for your finance team. Gone are the days of the Excel junkies; it's important we start leveraging more tech skills to move quicker. For me, [strategy and innovation] comes down to that."

It also comes from the top, Morrison said. A company needs a CEO who fully believes in data, and understands how critical it is. 

"If you don't have that, digital transformation will be difficult," she said. "When you get the CEO's buy-in, it then comes down to cost-benefit. Think of efficiencies you can gain, or maybe large upfront investments."

Litterio says CFOs stand to greatly benefit by remaining curious, connected and continuing to learn about their field. "I'm very passionate about connecting with my peers," she said. "I benefit from a monthly CFO forum, just to see what's on their mind, and what challenges they're having."

A framework for communication

Another vital aspect of CFO's ascent to CEO co-pilot is ensuring excellent communication within and beyond his or her team. 

"It's not good enough to tell your team, ‘I want you to communicate better,'" Noah said. "You need a framework that encourages it."

If CFOs are doing everything right, bringing out of the box ideas to the CEO hinges on one final requirement: having the support of other teams in the business.

"To be a successful strategic CFO, you have to build those relationships across the organization early," Marsh said. "Before you can go ask development to support you in building a data lake, or what have you, you have to know those people, know their names, and have spent some time with them." 

At Appcast, Marsh tries to be a service provider to each team. "If development needs resources, and it goes over its budget, I want them to feel comfortable coming to me," he said. "I'll try to work with them as a business partner to help them access the necessary capital. And if they feel I'm a trusted partner, when I have something I need their help with, they'll help me, too."

Appcast uses Slack for internal communications, and Marsh said he's a member of every single channel, from product to development to sales, HR and legal. "You learn a lot just by reading through those, and you connect with a lot of people," he said. 

"Getting out of the finance comfort zone, and trying to connect and understand business from all these other other angles, is absolutely critical," Noah concluded.