Partnerships are the backbone of every organization. The most paramount of all of them is the partnership between the CEO and CFO. A Chief Executive Officer selecting their Chief Financial Officer is similar to a presidential contender electing their vice president. As the CEO’s co-pilot, the CFO works to steer the business through each obstacle.
The alliance between a Chief Executive Officer (CEO) and Chief Financial Officer (CFO) is the most crucial C-suite collaboration for business success. A robust CEO-CFO relationship could make an impression between an enterprise that pulverizes under pressure and one that can handle any crisis while following a strategic vision.
Here are a few techniques to ensure that the most crucial partnership in a business has the ideal balance of dynamism and performance.
While CFOs are typically skilled at analyzing the past, CEOs are responsible for the future of the overall company. In order to protect the company’s future, they must assist the Chief Executive Officer in looking ahead.
It is the responsibility of the Chief Financial Officer to monitor risks and trends. They must be enablers, seeking out favorable outcomes rather than simply shutting things down. CEOs usually look for a CFO who can work with them to use numeric values to depict the story of the organization in a persuasive and intriguing way. Chief Financial Officers must also be good storytellers.
The main triangle of the company is composed of the CEO, CFO, and HRD. They are the ones who decide how to allocate resources and how the firms will look in the future. If this triangle is compelling, the three departments will be able to determine whether resources are being distributed appropriately.
The company’s capacity to make difficult choices will start to wane if all three are not in harmony. Similar to this, the partnership won’t function if businesses have a weak CFO or CEO who simply doesn’t want to make tough decisions.
Make deliverables and benchmarks more explicit
Relationships between the CEO and CFO are more complicated than ever, in part because most businesses are no longer divided into departments. Employees used to communicate about their projects vertically and had well-defined roles. Everything was made clearer by these detailed organizational charts. However, everything is hybrid now. Sales, finance, and product development employees at all levels collaborate to find solutions. And although that’s fantastic, things might turn messy.
Even the most influential leaders can find it challenging to hold on to significant initiatives when using these hybrid solutions. After all, the distinctions between who is responsible for what work are vanishing. Industry experts advise addressing this issue on day one by making it clear who will be in charge of what. All executive deliverables and benchmarks need to be very specific.
Adopt a strategy of planning
When a strategy is being formed, it is the responsibility of the CFO to anticipate risks within that plan and to raise important queries regarding the key growth restrictions, risks, and uncertainties, as well as the underlying assumptions.
In addition to managing their F&A organization and delivering useful financial reporting to aid in strategy creation, the Chief Financial Officer also plays a critical role in ensuring that the whole organization views the finance department as credible. The CFO has more time to strategize with the CEO and other C-Suite executives when the finance staff is fully operational and actively providing precise, business-critical information.
A single voice
For every business to be successful, communication is essential. The relationship between the CEO and CFO is crucial; thus, they must speak with one voice. For the company to have a clear vision, both parties must be on the same page. Both parties must comprehend how the other functions and how they do their respective jobs.
The company’s mission will require the CFO and CEO to speak with a united voice. A Chief Financial Officer will be expected to inform the board, investors, and stakeholders of the company’s financial situation. The CEO and CFO must communicate a consistent message that supports the business plan.