Introduction on how to become a successful CFO on a white and blue background with an illustration.

How to Become A Successful CFO?

To become a successful CFO ( Chief Financial Officer), you will need to have a strong background in finance and business.

A common path to becoming a CFO is to start by earning a bachelor’s degree in finance or accounting. From there, you can gain experience in the field through internships and entry-level positions in finance.

As you gain experience, you can move up the ranks to positions like controller. Having manager roles is an important step prior to being a CFO

Additionally, earning a master’s degree in business administration (MBA) can also be helpful in preparing for a CFO position. In addition to education and experience, a CFO should have strong leadership and communication skills. Also, a thorough understanding of financial regulations and compliance.

But do you know there are five types of CFO?

The Five Different Types of A Successful CFO

Here are the five different types of CFO.

CFO of A Listed Company

The focus will be to manage the shareholders and launch strategic plans within the group.

Here are the 5 main skills you need to become a successful CFO of a listed company:

Financial management and reporting

  • Why: To manage a company, your first tool to steer financial performance is your financial management reporting systems. It’s key to report the public financial information to your stakeholders.
  • How to Acquire: You can acquire this skill through education and experience in finance, accounting, and business. An MBA or CPA certification can be helpful.
  • Example: A CFO of a listed company has to prepare and present financial statements to the board and shareholders during quarterly earnings calls.

Strategy development and execution

  • Why: As a CFO of a listed company, it is important to have the ability to develop and execute strategic plans to achieve the company’s goals and meet the expectations of stakeholders.
  • How to develop this skills: be involved in strategic projects as soon as you can. You will learn how to define a strategic project and how to link it to the overall strategy of the company.
    The next step will be to get experience in planning strategic project and executing them. In this step you will work on financial models and business cases.
    The last step will be to be part of the team managing the whole strategic planning process of a company. In this last part, you will build the whole planning and present it to the board.
  • Example: As a CFO of a listed company, you will need to work with the CEO and other executives to develop a long-term strategic plan and ensure its implementation to drive the company’s growth.

Risk management

  • Why: As a CFO of a listed company, it is important to have the ability to identify, assess, and manage risks to the company’s financial stability and performance.
  • How to acquire these qualities: they can be acquired through education in finance and risk management, experience in risk assessments and analysis, and exposure to different industries and business models.
  • Example: A CFO of a listed company has to perform regular risk assessments and develop contingency plans to mitigate potential financial impacts to the company.

Investor relations

  • Why: As a CFO of a listed company, it is important to have strong communication skills to effectively engage with investors and address their concerns. But also understand the regulations concerning listed companies as well as the stock market dynamics.
  • How to acquire these skills: You can acquire it through an experience in investor relations and exposure to the investment community.
  • Example: A CFO of a listed company will meet regularly with investors and participate in earnings calls. In this call he will have to provide financial updates and address investor concerns.

Stakeholder management

  • Why: As a CFO of a listed company, it is important to have the ability to effectively communicate and manage relationships with stakeholders such as shareholders, employees, customers, and suppliers.
  • How to be great at these skills : through experience in different cross-departmental projects. You can also take specific soft-skills workshops focusing on developing your ability to understand the different traits of character you can deal with in a company. In this workshops you would also learn how to influence and communicate with different types of personality.
  • Example: A CFO of a listed company has to communicate the company’s financial performance and strategy to employees and participate in stakeholder engagement activities to build and maintain positive relationships.

Become A Successful CFO of A Division

His/her role is to drive the performance of the business and make sure you apply the group strategy.

If you want to become a great CFO for a division of a multinational company, here are the main strengths to demonstrate:

Business acumen

  • Why: A CFO of a division should have a strong understanding of the company’s products, services, and operations to drive performance and align with the overall company strategy.
  • How to acquire it: you can acquire it through experience in the company’s industry, hands-on experience in various functions, and education in business and management. The best way to learn business acumen is to spend time in operational roles either as a controller or an FP&A analyst for a manufacturing unit or dedicated to a department.
  • Example: A CFO of a division needs to analyze sales data and market trends to make recommendations for improving business performance.

Knowledge of company’s products and services

  • Why: As a CFO, it is important to have a deep understanding of the company’s products and services to make informed financial decisions and effectively manage the company’s operations.
  • How to develop this skills: First, you need to have a full overview of your products and services portfolio. Get it by having deep discussions with sales and marketing. Then you need to understand the economics of your products and services. Analyse the gross margins of your products by understanding how the price is set up and the composition of the standard price. Finally, participate in strategic discussions around product roadmap and development.
  • Example: A CFO could work with the company’s product development team to assess the financial viability of new product offerings. The CFO will also have to review investment decisions for product improvement and innovation. Finally, he is responsible to ensure that the company’s product and service offerings are aligned with the company’s overall strategy and goals.

Business Performance Management:

  • Why: As a CFO of a division, it is important to have the ability to effectively manage and improve the performance of the division’s operations. This is how the group will judge your success.
  • How to get great at Business Performance Management: you will need first to learn how to track performance by setting up the right indicators. Getting experience in FP&A will give you a great understanding of how to compute and follow indicators. Then you will need to learn how to manage performance. This is the most difficult part and where you will have to demonstrate leadership skills. Start by joining a performance management project as active participant. For example, as an analyst you could track specific indicators. Then you could take meetings notes. And finally you could follow up with the different stakeholders when preparing the next follow up meeting. Observe how the leader of the performance management project acts and influence stakeholders to get results. Learn for yourself what works, what does not work and understand the lessons learned of the project to build your own experience.
  • Example: A CFO of a division will need to work with the division’s management team to set performance targets, monitor progress, and implement improvements to drive the division’s success. It could be a cost reduction plan with a bi-weekly meeting where the project team analyses item by item how to reduce costs and follows up the implementation of the action plan.

Understanding of group’s processes and controls

  • Why: As a CFO of a division, you will be the first point of contact of your group in charge of implementing the group’s processes and controls. Therefore, it’s important to have a deep understanding of group processes and internal controls to ensure financial stability, compliance with laws and regulations, and the accuracy and integrity of financial reporting.
  • How do you acquire this understanding? Through experience in different units of the group in finance departments or in the internal audit department. You can also acquire it by participating to a large transformation like ERP implementation or Finance reorganisation.
  • Example: A CFO may have to work with the group’s finance and accounting teams to implement and maintain internal controls and financial processes locally and regularly assess the effectiveness of these controls. Additionally, the CFO may be responsible for ensuring the accuracy and integrity of financial reports, which requires a strong understanding of group processes and internal controls.

CFO of A Medium Size Company

The tasks are more diverse within finance (accounting, tax, treasury, compliance, analysis, M&A), and the role can sometimes be extended to an additional function like operations or human resources.

If your focus is to become the CFO of a medium size company, you will want to focus on the following skills:

Financial management and reporting

  • Why: To become a successful CFO of a medium-sized business it is important to have a deep understanding of financial management and reporting to effectively manage the company’s financial resources, make informed financial decisions, and provide accurate and timely financial information to stakeholders.
  • How to acquire this skill: This skill can be acquired experience in different finance departments: accounting, reporting and FP&A. It’s important that you get exposure to different financial systems and reporting processes. For external reporting you will need to stay up-to-date with requirement through continuous education in accounting and regulatory updates.
  • Example: A CFO of an medium-sized enterprise may be required to work with the company’s finance and accounting teams to develop and implement financial management processes, regularly assess the company’s financial performance, and prepare and deliver accurate and timely financial reports to stakeholders, including shareholders, lenders, and regulatory bodies. The CFO must be able to effectively manage the company’s financial resources, including cash flow, investments, and credit facilities, while ensuring compliance with relevant laws and regulations.

Financial analysis and planning

  • Why: The CFO is responsible for providing financial insights and recommendations to support the company’s decision-making.
  • How to acquire this skill: You can start in a FP&A department, working on budgeting and forecasting. Get involved in business case calculations but also in presenting the business cases. Learn to associate financial data with non financial data to create insights.
  • Example: A CFO of a medium-sized company has to prepare the company’s budget and forecast future financial performance to support strategic planning.

Taxation

  • Why: As a CFO, it is important to have a deep understanding of taxation to minimize the company’s tax liability, comply with relevant laws and regulations, and ensure the accuracy of financial reporting related to taxes.
  • How can you develop your taxation skills? Don’t wait to become a CFO to learn about tax! Even if it’s not in your scope, discuss with your tax department on the tax implications of some deals and be sure to understand the current hot topics in tax. Then make also sure that you stay informed about the regulatory tax updates of your country.
  • Example: You could work with the company’s tax team to develop and implement tax planning strategies, ensure compliance with tax laws and regulations, and prepare and file tax returns.

Treasury

  • Why: Treasury management is a critical function for a CFO of a medium-sized company, as it involves managing the company’s financial resources and ensuring that it has sufficient liquidity to meet its obligations.
  • How to get treasury skills: get exposure to a range of treasury management challenges and opportunities. A CFO of a medium-sized company must have a strong understanding of financial markets, financial products, and financial risk management practices, as well as the ability to effectively manage the company’s financial resources.
  • Example: You could work with the company’s tax team to develop and implement tax planning strategies, ensure compliance with tax laws and regulations, and prepare and file tax returns.

Compliance

  • Why: Compliance is an essential aspect of the role of a CFO of a medium-sized company, as it involves ensuring that the company adheres to relevant laws, regulations, and ethical standards.
  • How to acquire it: through education in law and regulation, practical experience in compliance, and exposure to a range of compliance-related challenges and opportunities. A CFO of a medium-sized company must have a strong understanding of relevant laws, regulations, and ethical standards, as well as the ability to effectively manage the company’s compliance processes and procedures.
  • Example: You could work with the company’s tax team to develop and implement tax planning strategies, ensure compliance with tax laws and regulations, and prepare and file tax returns.

M&A experience

  • Why: M&A (Mergers and Acquisitions) is an important aspect of the role of a CFO of a medium-sized company, as it involves identifying and executing opportunities for growth through mergers, acquisitions, or other business combinations.
  • How to acquire it: This skill can be developed through education and training in finance, business strategy, and M&A, as well as practical experience in executing M&A transactions. A CFO of a medium-sized company must have a strong understanding of finance and business strategy, as well as the ability to analyze and evaluate potential M&A opportunities, and to manage the financial and operational aspects of M&A transactions.
  • Example: A CFO of a medium-sized company may be involved in identifying and executing M&A opportunities to drive growth and expansion. The CFO must be able to analyze and evaluate the financial and operational aspects of potential M&A transactions, such as the financial and operational performance of the target company, the potential benefits and risks of the transaction, and the potential impact on the company’s overall financial position and performance. The CFO must also be able to manage the financial and operational aspects of the M&A transaction, such as due diligence, financing, integration, and post-merger operational management. A strong understanding of M&A enables the CFO of a medium-sized company to play a key role in driving the company’s growth and success.

 

CFO of A Small Company

His/her role is more hands-on; the CFO of a small company needs to master the doing of many topics as the team is smaller, and there are fewer experts.

Here is what you need to learn if you plan to become a successful CFO of an SME.

Business strategy

  • Why: Understanding business strategy is essential to become a successful CFO of a small company. It allows them to align their financial management and reporting activities with the overall goals and objectives of the company.
  • How to acquire it: through exposure to a range of strategic business challenges and opportunities. Sit down with your CEO and other executives. Understand the strategy and link it to financials. A CFO of a small company must be able to understand the company’s overall goals and objectives and develop financial management and reporting activities that support those goals.
  • Example: A CFO of a small company may need to work closely with the CEO and other members of the leadership team to understand the company’s overall strategy and to develop financial plans and reporting activities that support that strategy. The CFO must be able to provide financial analysis and support for business decisions, and to help the company make informed decisions about growth, investment, and other strategic initiatives. A strong understanding of business strategy allows the CFO of a small company to play a key role in driving the success of the company over the long-term.

Entrepreneurial mindset

  • Why: To become a successful CFO of a small company, you should be able to think creatively and outside the box to solve problems and drive growth.
  • How to acquire it: through exposure to entrepreneurship, starting a business, or working in an innovative environment.
  • Example: A CFO of a small company will be required to develop new and creative ways to secure funding and support the company’s growth.

Problem-solving skills

  • Why: As a CFO of a small company, problem-solving skills are essential for identifying and addressing financial and operational issues that arise in a small company environment.
  • How to acquire it: Develop it through practical experience and exposure to a range of financial and operational problems and challenges. A CFO of a small company must be able to identify problems, analyze data, and develop solutions that address these problems.
  • Example: A successful CFO of a small company identifies and addresses financial issues such as cash flow management, profitability, and cost control. The CFO may also be involved in operational issues such as process improvement, risk management, and compliance. In each of these areas, the CFO must be able to use their problem-solving skills to identify issues, analyze data, and develop solutions that address the problems and help drive the performance of the company. The ability to solve problems quickly and effectively is a critical skill for the CFO of a small company, as it allows them to drive performance, support growth, and ensure success.

Adaptability and versatility

  • Why: Adaptability and versatility are critical skills for a CFO of a small company due to the fast-paced and dynamic nature of small businesses.
  • How to acquire it: This skill can be developed through exposure to a range of financial and operational challenges, and through a willingness to learn and adapt to new situations. A CFO of a small company must be able to quickly adapt to changing circumstances and be willing to take on new responsibilities as needed.
  • Example: A CFO of a small company may need to be able to quickly adapt to changes in the business environment, such as changes in customer demand, changes in the competitive landscape, or changes in the regulatory environment. The CFO must also be able to take on new responsibilities and challenges as the company grows and evolves, such as new financing needs, new operational requirements, or new compliance challenges. A CFO with strong adaptability and versatility skills will be better equipped to succeed in a fast-paced and dynamic small business environment and to help the company grow and succeed over the long-term.

 

CFO of A Start-Up

The main goal will be to help finance the growth through external shareholders or banks. On the other hand, the operational side of the CFO of a start-up needs to focus on implementing tools and processes which can scale with the growth.

Therefore, if you are targeting to become the CFO of a start-up, you need to be able to master these topics:

Entrepreneurial mindset

  • Why: It is important to have an entrepreneurial mindset to understand the unique challenges and opportunities of a growing business and to support the company’s vision and goals.
  • How to acquire this mindset: through experience in starting and growing businesses and exposure to different entrepreneurial approaches and success stories.
  • Example: A CFO with an entrepreneurial mindset may be required to work closely with the company’s management team and other stakeholders to understand the company’s vision, goals, and unique challenges. However, the CFO must be able to think creatively and outside the box to develop and implement strategies that support the growth and success of the business. Additionally, the CFO must be able to continuously assess the company’s financial performance and risk exposure and make agile and informed decisions to support the company’s growth and sustainability. An entrepreneurial mindset allows the CFO to be a strategic partner to the management team and a key player in the success of the business.

Networking and fundraising skills

  • Why: The CFO of a start-up is responsible for securing funding to support the company’s growth and expansion.
  • How to acquire these strengths: through experience in fundraising and networking, education in corporate finance and entrepreneurship, and exposure to the investment community.
  • Example: A CFO of a start-up will work with potential investors to secure funding for the company’s expansion.

Financial planning and analysis

  • Why: To become a successful CFO, it is important to have a deep understanding of financial planning and analysis (FP&A) to provide accurate and relevant financial information, support decision-making, and drive performance.
  • How to learn it: through education in finance and accounting, professional experience in financial analysis and planning, and exposure to different FP&A techniques and tools.
  • Example: A CFO of a start-up will have to develop and implement FP&A processes, analyze financial data, and provide accurate and relevant financial information to support decision-making. This may involve preparing budgets, forecasts, and performance reports, analyzing financial trends, and providing insights and recommendations to the management team. Additionally, the CFO must be able to effectively communicate financial information to investors.

Strong interpersonal and leadership skills

  • Why” As a CFO of a start-up, strong interpersonal and leadership skills are critical for building relationships with key stakeholders, including investors, employees, and customers.
  • How to learn it: These skills can be developed through a combination of education in leadership and management, practical experience leading teams, and exposure to different leadership styles and approaches. Start-ups typically have a dynamic and fast-paced environment, and a CFO with strong interpersonal and leadership skills will be better equipped to navigate this environment and lead effectively.
  • Example: A CFO of a start-up may need to lead and manage a lean team of finance and accounting professionals and work closely with the company’s management team to drive performance and secure funding from investors. Additionally, the CFO must be able to effectively communicate financial information, risks, and opportunities to stakeholders and to build and maintain positive relationships with investors, employees, and customers. As a result, a CFO with strong interpersonal and leadership skills will be better equipped to lead the company through periods of rapid growth and change and to build a strong and successful finance function that supports the company’s goals.

The Bottom Line – Start Today and Become A Successful CFO!

To sum up, to become a successful CFO has great challenges, but it is a rewarding career path. Therefore, with dedication and hard work, you can become a successful CFO and make a meaningful contribution to your organization.

Finally, if you are interested in moving to FP&A before becoming a CFO, you can join my course and learn from my 14+ years of experience.