During a career that included holding the top job at two Fortune 500 companies as well as spending four terms in the US Congress and acting as a senior aide to four American presidents, Donald Rumsfeld collected hundreds of aphorisms about business and leadership.
‘Rumsfeld’s Rules’ have been described as required reading by the Wall Street Journal, while the New York Times said they could be profitably read in any organisation.
One of the most widely quoted rules is ‘Have a deputy and develop a successor. Don’t be consumed by the job or you’ll risk losing your balance’.
At a time when boards and CEOs are asking more of finance leaders than ever before in terms of having a more strategic partnership with senior management, some finance professionals are concerned that deputy CFOs are not getting the opportunity to build their strategic expertise because of a reluctance on the part of their bosses to delegate.
According to Tepcomp Group CFO Antti Ritvonen, while finance has spent decades moving from recording history to supporting forward-looking decisions and AI can now automate more reporting, analysis and forecasting, technology alone will not produce strategic CFOs.
“Strategic capability develops only when people are trusted with real responsibility,” he says. “Deputy CFOs need exposure to board discussions, business trade-offs, transformation decisions and situations where there is no perfect answer. They must be allowed to present the forecast, challenge operational leaders, lead major initiatives and make recommendations – not merely prepare the material for someone else.”
Ritvonen suggests there is also a risk that AI makes the problem worse. His view is that a CFO who uses technology to retain even more information and decision-making personally may become more effective in the role while leaving the succession pipeline even weaker.
“The real test of a strategic CFO is not only the quality of the decisions made today,” he says. “It is whether the finance organisation is developing people capable of making those decisions tomorrow.”
The message that succession planning is a positive thing to do is rarely heard outside of large corporations, suggests Cassandra John, Managing Director and CFO at Sif Capital Advisors.
“If you are a mid-career CFO, you are never asked in an interview process how you prepared your organisation for your exit,” she says. “You are asked how did you change an organisation, how did you level it up, how did you manage up, across and down but never specifically if you planned for your exit in a way that left an organisation and your successor better off.”
Her view is that it is one thing to do that towards the end of your career but it is much harder to do – and be supported in that – in the middle.
“In a good organisation they will look internally first before going external and if you have trained your team and given them growth opportunities and visibility to your peers at the management level, ideally this works,” adds John.
