During a heated town-hall meeting in May, Google employees subjected their then CFO, Ruth Porat, to a grilling about the firm’s latest round of redundancies. They quizzed her on the selection process, with one attendee complaining that they felt they were “playing a game of ping-and-hope-to-hear-back to figure out who lost their job. Can you speak to the communication strategy?”
This case highlights the importance of communication skills in the finance chief’s evolving role. Many businesses have come to expect their CFOs to explain the tough choices they’ve had to make with clarity and confidence, handling potential conflicts effectively and maintaining the trust of employees in so doing.
The rise of soft skills
Tom Berry is UK managing director of communications agency MikeWorldWide. Also the deputy editor of Financial Director magazine in 2001-05, he has been a keen observer of how the emphasis on CFO communication has changed over the years.
A decade ago, the focus was on transparency in financial reporting. This was the age of regulation and compliance, he says, noting that it was “the first time that CFOs felt the very real threat of public exposure and even jail time” for transgressing.
Discussion about ensuring compliance has focused more on effective corporate governance since then, as Berry explains: “The issue of transparency in this context is all about being open about the decisions you are taking, the role you want your people to play in those decisions and how you measure success. The process has become much more collaborative.”
This has meant that the skills required of an effective CFO are “much softer, even though the decisions they must take are just as hard as they’ve always been”, he says.
It’s also becoming more important for finance chiefs to be better storytellers. Sharing the numbers is no longer enough; CFOs need to be able to articulate a clear narrative that employees can relate to. That’s the view of Victoria Lewis-Stephens, co-founder and managing director of United Culture, a specialist in engagement and communication.
“Without this, it’s more difficult for people to connect what they are doing from day to day with the growth and prosperity of the business,” she says. “That’s leaving untapped revenue on the table.”
The closer CFOs are to the business, the more effectively they can allocate resources. They therefore need to understand what motivates employees (and customers), Lewis-Stephens argues. Without such insights, she says, “it’s hard to ensure that budgets are spent on the real priorities”.
Another recent trend suggests that soft skills will only become more sought-after in finance chiefs. The proportion of CFOs becoming CEOs in the UK increased from 21% in 2019 to 30% in 2023, according to executive search firm Heidrick & Struggles. Taking on the top role will inevitably entail spending more time on communication strategy.
Room for improvement
Deservedly or not, finance chiefs are still widely perceived as having poor communication skills. A 2022 survey of non-financial managers by Oracle NetSuite, for instance, found that 40% felt that their CFOs were falling short in this respect. Clearly, there is room for improvement.
“It’s not always a natural position for them. These skills aren’t taught during accountancy training,” Berry observes.
He adds that phenomena such as the rise of hybrid working have meant that many finance chiefs are operating “in an increasingly fragmented environment”, which doesn’t help them to connect meaningfully with people either.
Gianpiero Petriglieri is an associate professor of organisational behaviour at Insead business school and an expert on leadership and learning in the workplace. In his view, the most engaging finance chiefs are “connectors of people and ideas, rather than facts and statistics”.
They minimise the financial terminology they use when conveying a message, focusing instead on clear concepts that non-experts can understand and act upon. These may differ depending on the audience. Communication tactics that engage certain stakeholders may not work for others.
“Find a common language. Spend time getting to know these different groups. Ask them what their concerns are and what motivates them,” Petriglieri advises, adding the substance of the message is usually more important than the style in which it’s delivered.
Build credibility and trust
Adrian Talbot, CFO at marketing firm Miroma Group, agrees that finance chiefs can make a bigger impact as communicators by deepening relationships and building their credibility. He is “always looking for opportunities to engage with different parts of the business”, going so far as to start a band with his colleagues.
This has helped to foster trust in him as a leader, Talbot says, adding: “When it comes to pulling the company through a crisis, employees are more likely to sit up and take notice because I’ve spent time developing relationships. They know that I’m making decisions from a place of care, not callousness.”
Finance chiefs do not have to go to such lengths to reach this point, of course. Talbot’s advice is to “spend half an hour each day walking around the office and chatting to people. Ask questions and encourage feedback. This will create a culture of openness and collaboration.”
In his view, CFOs should embrace their natural curiosity by venturing beyond known territory in the organisation, rethinking how their communications can add value.
“Go on customer visits with the business development team or take a non-executive position at a different company for a day every month,” Talbot suggests. “You’ll get to see how a different board and business can work, which will teach you more than any communication course.”
The role of empathy
Berry stresses that it’s up to the CFO to “humanise” the finance team by becoming a “visible and friendly” presence in the organisation. This, he believes, will help to “build bridges, not walls”.
Talbot makes a conscious effort to be as approachable as possible. He attends all new business events and speaks at every weekly all-staff meeting, for instance, even if that’s to make a brief statement.
“I believe in getting out from behind the spreadsheet and engaging in the business for personal benefit, as well as raising the profile of my team,” he says.
This was daunting at first, but “practice makes perfect and confidence builds over time. The more visible you are, the more people listen.”
Determined to shatter the stereotype of the “cold, introverted finance chief”, Talbot is even putting himself forward as a contributor to podcasts and professional events.
“In times of crisis, staff look to the CFO to communicate transparently and empathetically,” he says.
Talbot was acutely aware of this at the start of the Covid crisis, which is why he chose to call every member of staff and have a five-minute conversation with each of them.
Berry recalls how one finance chief he knew would start every board meeting “by asking everyone: ‘How are you feeling today?’ It was their way of bringing any issues to the surface straight away.”
The CFO may be responsible for the hard facts and figures of a business – but their interactions and communications with the rest of the business should be anything but.
