5 Key metrics to measure your CFO

5 Key metrics to measure your CFO

A client sent me a great article on “The Redefined No of the CFO” by Deniz Caglar, Matt Mani and Josh Peters of PWC.

It does a great job at summarizing how much the role of the CFO has changed and the key outcomes a top CFO will need to achieve.

This article pushed me to re-create our internal scorecard that we use to rank top financial leaders in interviews and then pass on to our clients for performance reviews.

It takes a clearly defined interview process to ensure you find someone who can execute on these 5 metrics.  Track record says it all.

If you are looking to create a scorecard for interviews, or ensure your monthly / quarterly / annual reviews are focused on the right questions, this may help.
#1.  Measurable Outcomes

A:  Value Chain Insight.  Strike a balance between long term competitive advantage and increasing profitability. 

  • Unbiased, holistic perspective encompassing entire value chain.
  • Cross functional focus with the ability to choose the important activities to focus on.
  • Allocate resources where our company has a distinctive capability and help differentiate our company from competition over time.

 

Measured by sales and profitability growth and the rating (1-10) to the following question:

Key Question:  Do you have data-driven perspectives on all aspects of the value chain in our business?  In which areas do you feel least comfortable?

B:  Leverage business drivers.   Define the way success is recognized; implement metrics and hold departments accountable. 

  • Focus on a few key business drivers that convey a broad understanding of the value proposition of our company and how the company fulfills our value add.
  • Strike a balance between internally focused metrics vs. external (customer) focused metrics.
  • Align all departments.
  • Lead the implementation and culture change to ensure a culture of accountability.

 

Measured by sales and profitability growth and the rating (1-10) to the following question:

Key Question:  What are the key drivers of your businesses?  How consistently are these measured and infused into performance management in all business units and functions?

C:  Attention to Talent.  Attract the right talent.

  • Recruit, train, mentor, coach
  • Ensure the team has the right people on board

 

Measured by rating to key question (1-10)

 Key Question:  How are you developing finance talent that can look across the business?  How are you retaining your best talent?  What would you rank the talent of the overall business on a scale of 1-10?

  1. Cultural Engagement. Measured by shift in behaviors to reflect transparency and accountability.
  • Set and reinforce behaviors consistent with the company’s stated strategy and performance expectations
  • Lead (along with other managers) open discussions about market trends, business performance, specific opportunities, risks, failures to instill high-performance culture and change behavior

 

Measured by rating to key question (1-10)

Key Question:  Does your company have a performance-driven culture?  How are you and the finance function reinforcing or influencing this culture?

  1. Banking Relationships and Financial Reporting

Measured by rating to key question (1-10)

Key Question:  Have we developed relations with our banks that support long term growth and ensured our reporting is accurate and timely?

#2.  Behavioural Competenices

  1. Strategic thinking / visioning
  2. Brainpower / learns quickly
  3. Financially savvy (business drivers). Can sort the important from the unimportant.
  4. Flexible / Adaptable. Continuously evolve metrics to ensure working on the right things.
  5. Hires A Players
  6. Ability to motivate others
  7. Self Starter

 #3.  Cultural Competencies

  1. Transparency
  2. Integrity and honesty
  3. Proactive / takes initiative

#4.  Other Critical Factors

  • CA / Designation
  • Manufacturing Background

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