How Finance Controllers Can Become CFOs: Strategic Skills, Tech, Networking & Industry Insights

Emily: Hello, everyone. Good morning, good evening, good afternoon, depending on where you are. This is Emily, and I am a digital transformation consultant at Hyperbots. I'm very pleased to have Ayo on the call with me. Ayo is a CFO at Kobo360. But before we dive further in, Ayo, would you like to introduce yourself?

Ayo: Yes, thank you, Emily. My name is Ayo Fashina, as Emily said. I'm the group CFO at Kobo360, an e-logistics startup. I've been there for over two and a half years now. Before that, I was in various finance functions, from investment to investment banking to advisory. Prior to that, I was an engineer.

Emily: Thank you so much, Ayo. 

Key CFO Skills Every Finance Controller Should Develop

Emily: So the topic that we'd be discussing today is how finance controllers can become good CFOs. And I'd like to dive into the first question. So, I just want to understand what some of the key CFO skills are in the current times. And you know, how has it changed over the last decade in terms of the evolving role of a CFO?

Ayo: Thank you, Emily. You know, CFOs must be strategic. A lot of people think the CFO role is like the controller's; they confuse the two, thinking it's just an accountant keeping records. But nowadays, CFOs are strategic in their thinking. They are responsible for the overall financial strategy of the firm, which includes financial planning, analysis, treasury management, capital raising, investor relations, and advisory services in merger or acquisition scenarios. They are also the CEO's trusted advisor, guiding from a financial and strategic point of view. 

The CFO role has a bird's-eye view of everything that's going on in the business and dives into the numbers and factors driving the business more than the CEO, who is more outward-looking. The CFO ensures the CEO knows everything needed to manage external stakeholders. Historically, CFOs performed more of a controller role with some treasury management and financial planning and analysis (FP&A), but now they are more strategic. Today, a CFO can come from various backgrounds as long as they have a broad strategic view of financial management.

Building Leadership Skills for the CFO Role

Emily: Got it, understood. And what leadership qualities do you believe are essential for a successful CFO that might not be as critical in a controller?

Ayo: A controller is closer to the numbers, ensuring all the accounting works. CFOs, on the other hand, drive growth. A controller's job is to enable that growth by executing the CFO's vision and strategy. Therefore, strategic thinking is crucial for a controller aspiring to be a CFO. Controllers must transition from a heads-down position, focusing on tactical execution, to a heads-up position, understanding and strategizing for the business's future growth.

Gaining a Broader Business and Financial Perspective

Emily: So, I believe that to be a CFO, one needs a broader understanding of finance, not just accounting. A controller typically grows through the ranks of auditing and accounting before becoming a CFO. However, to be a CFO, you need to understand how the business works as a whole and engage in strategic decision-making.

Ayo: Exactly. Controllers must start understanding more than just the accounting side. They need to know treasury management, cash management, and operational inefficiencies. They should analyze data to understand trends and make strategic decisions about investments, mergers, and acquisitions. They must transition from just compiling data to interpreting it and planning for the future.

Expanding From Financial Operations to Strategic Planning

Emily: That's really insightful. So how can finance controllers expand their role from managing day-to-day financial operations to contributing to strategic decision-making?

Ayo: Step one is to look at the bigger picture. Controllers need to step back from just ensuring numbers are correct and start thinking about what those numbers indicate for the future. They should begin asking strategic questions and adopt forward-looking approaches to understand where the company is heading and how to get there. Continuous learning and professional development are also crucial.

Emily: Continuous learning is indeed imperative. Can you recommend specific areas of focus for professional development?

Ayo: Continuous development is essential. Controllers should take stock of their skills and identify gaps needed for the CFO role. They should focus on finance and management skills beyond accounting, such as treasury management, mergers and acquisitions, negotiations, and understanding value drivers and competitive advantages.

The Importance of Industry and Sector Knowledge

Emily: How important is it for aspiring CFOs to have deep knowledge and understanding of their specific industry vertical or sector?

Ayo: It's very important. CFOs must have a broad perspective of the industry, including market and economic forecasts, competitive landscape, and opportunities and threats. They should understand their company's niche and inefficiencies to provide strategic recommendations for growth. Controllers need to start thinking from a macro to micro perspective, considering industry dynamics and strategic growth options.

Technical and Digital Skills Required for CFOs

Emily: With the increasing role of technology in finance, what technical skills or knowledge should finance controllers acquire to pursue a CFO role?

Ayo: 

• Controllers need ERP skills and financial modeling abilities. They should be able to test and assess financial forecasts. 

• Data analysis skills are also crucial as more data is involved in the CFO role. These skills free up time to think strategically and make informed decisions.

Building a Professional Network for Career Growth

Emily: How does building a professional network impact the finance controller's path to becoming a CFO?

Ayo: Professional networks are vital for career growth. Networks provide insights and ideas, and most job opportunities come from referrals. Engaging with other controllers and CFOs helps stay updated with trends and can lead to career advancements. Networking is a key component for professional development and finding new roles.

Balancing Financial Reporting and Strategic Planning

Emily: How can finance controllers balance their responsibility in financial reporting with the need to engage in strategic planning?

Ayo: Efficiency is key. Controllers should adopt continuous improvement processes, reporting as they go along instead of waiting until month-end. This proactive approach frees up time for strategic planning. Tools that automate reporting processes can help achieve this balance.

Role of Mentorship &  International Exposure in Career Progression

Emily: Do you think there is a need for mentorship or coaching during the transition from controller to CFO?

Ayo: A mentor or coach can be very beneficial. Mentoring provides the benefit of experience and guidance. Coaching, on the other hand, prepares you methodically for the role. Mentorship can enlighten controllers on aspects that may not be obvious through self-study alone.

Emily: How important is international experience for a finance controller aspiring to become a CFO?

Ayo: International experience is highly valued as it provides different perspectives and exposure. It is particularly beneficial for companies with global aspirations. Controllers with international experience can draw from a broader base of knowledge and are often viewed more favorably.

Collaborating Across Departments to Add Strategic Value

Emily: What advice do you have for finance controllers to enhance their collaboration with other departments to provide more strategic value?

Ayo: Controllers need to get out of their accounting bubble and engage with other departments to understand their roles and pain points. This understanding helps in making informed strategic decisions that consider the entire organization's operations. It also positions them as potential CFO candidates who are seen as well-rounded and knowledgeable about the whole business.

Mastering Risk Management for the CFO Role

Emily: Can you discuss the importance of risk management in the CFO role and how controllers can prepare for these responsibilities?

Ayo: Risk management is integral to the CFO role. Controllers should understand and manage risks, balancing them with rewards. They should take courses in risk management to better identify and mitigate problems.