Treasury Talent

Question Answered: Maximising your potential

Published: Sep 2015

This issue’s question

“What can a treasurer do to maximise his or her chances of one day becoming CFO? Are there any particular qualifications or experiences that might be beneficial?”

Maciej Müldner, Finance Director, Skanska Property Poland

Maciej Müldner

Finance Director
Skanska Property Poland

Whilst it may seem obvious, it is important to point out that in order to become a CFO, first and foremost, you have to want to. It should be part of your career plan because any aspiring CFO must understand the capabilities, knowledge and experience needed to fulfil that role. You can find a lot of ideas and descriptions of what the role entails on the internet (posts on LinkedIn, for instance). My personal view is that a CFO is a business partner; they are the person that ensures the president or owner of a company is comfortable with what the organisation does and the financial impact of all of its business activities. This involves business decisions that are properly considered and presented and ensuring, as much as possible, that decisions show the expected result.

There are, of course, certain things a treasurer can do to improve his or her chances of becoming a CFO. It is often the case that the treasury function, and those working in it, are rarely seen by the rest of the organisation so they need to make themselves more visible in the company. Employees can invite themselves to meetings even if these meetings are not 100% connected to their day-to-day role. This is one way of gaining the desirable understanding of the business beyond a current role, for a CFO needs to get much closer to the operational side of the business – understanding the consequences of their decisions and how operational processes work, for instance. For those who wish to gain such skills, first, they need to appreciate what experiences they are lacking. A few typical areas where treasurers need to gain knowledge are accounting rules and processes and controlling. Controlling can refer to financial controlling, an area which treasurers usually work quite closely with, and business controlling. This is where a treasurer could boost their marketability: how to do a budget, how to forecast, the best way of following up on a forecast and the key performance indicators (KPIs) that drive a business, for example. It is also a good idea to start expanding your scope of responsibilities.

In a way, a CFO lives in two worlds – the operational world and the financial world – so it is crucial to build up good communication skills in order to explain difficult and complicated concepts in a way others can understand and relate to. Whilst this is a challenge on the one hand, on the other if you can build up this skill, it is invaluable in fulfilling the CFO’s role of being an operational voice. Moreover, this involves having the capability of translating business decisions into numbers, both seeing and explaining the impact on the company’s bottom line.

To summarise, as a CFO you need to harness a combination of skills. Typical financial qualifications are good to have, as well as a Master of Business Administration (MBA) or alternative forms of management study. Treasurers will develop the relevant skills when focusing on transactions within a given benchmark or certain value to achieve. Accountants, will reflect on what has happened by analysing the accounts. But, as a CFO, you need to combine both – as well as looking into the future, all the time translating reality into numbers and numbers into reality. There is no ‘safe haven’ for a CFO, so whilst many talk about it, the role isn’t for everybody.

Mike Richards, Founder and President, MR Recruitment

Mike Richards

Founder and President
MR Recruitment

For the ambitious, it is always a good thing to look towards the future and, with regards to maximising your chances of one day becoming a CFO, I have the following advice. Of course, it is extremely useful for corporates to have a background in a wide range of business functions (rather than have spent their entire career within treasury), although I do find that many treasurers tend to have developed their treasury or finance expertise within just the treasury ‘stream’. This isn’t always intentional, however. It is often by accident rather than design: once you develop excellence within a particular area of finance why wouldn’t you utilise that to your advantage? Financial reward is on offer and, in these challenging economic times, who could blame an expert for wanting to be rewarded as such.

This being said, of the CFOs that I know with a background in treasury, all have also worked in other areas within finance as part of their career path, eg they have become experts in the treasury area and have moved into other senior business roles or senior finance positions. Thus, they have made active choices to move into financial controller or planning roles in order to experience finance as a whole, enabling them to better sell themselves when applying for CFO and/or FD positions.

In short, for a treasurer looking to move up the career ladder, take a moment to reflect on what you have and have not achieved through the challenging economic period we have seen over the past three to five years and ask yourself:

  • Have you achieved what you set out to achieve?
  • Where have you fallen short?
  • What have you done to achieve your aims?

After all, these questions will be asked of you at your next job interview. If you are satisfied with your answers then you are on the right track to achieve your next move. If you are not happy with your answers, why would anyone else be? A track record of success within the treasury function is simply the precursor to achieving the next role. In order for corporates to enhance their chances, all business related qualifications are beneficial. Professional treasury examinations are extremely useful as a benchmark of expertise and an MBA gives a wider business view. Whether business experience overrides professional qualifications, however, depends on the audience.

Mustafa Kilic, CFO and Member of the Board of Directors, Candy Group Turkey

Mustafa Kilic

CFO and Member of the Board of Directors
Candy Group Turkey

It goes without saying that the environment for all finance professionals is changing and, with that, the role of a CFO has also evolved. Within the last ten years, the CFO has started to become more of an integrator and co-ordinator in addition to the more traditional operator and protector tasks. There is also more competition in the business environment. This is pushing CFOs to gain new skills and the ability to sustain and continue business performance is more important than ever. Against this backdrop, and in order for a treasurer to maximise his or her chances of becoming a CFO, it is important to understand the capacity of your organisation’s business operations. Each and every company will have individual operating systems and their own ways of working with them. A CFO first needs to understand the range of areas the business operating system interfaces with in order to run effectively. This, of course, is a prerequisite for writing and applying policy.

Moreover, with the state of the current regulatory environment, expectations to understand the impact of such regulations, are higher than ten years ago. Understanding these procedures, and the company’s exposure to risk, is crucial in a CFO’s role. I cannot even begin to compare the tools we are using today to measure risk with those from say ten years ago. But this isn’t all a would-be CFO needs to be aware of. The world is now more connected than ever before and news spreads fast: crisis management and communication skills are important in order to fulfil the expanded role of a CFO in today’s world. In this position, you need to learn how to deliver both good and bad news.

One of the positives is that, as treasurer, you are already in touch with some of the most critical contacts within the CFO’s reach – financial institutions (FIs) and suppliers, for instance. Treasurers have the added advantage that they’ve worked with cash flows and have experience with this element of a company’s business operating system. It is also second nature for a treasurer to look for financial risk; they understand how operational, financial and strategic risks are all linked and can trigger each other. In their existing roles, treasurers have already built up a good perspective of credit and market risks too.

In addition, treasurers are always in touch with the key working capital management components: cash, payables, receivables, inventory, funding and profitability. Thus, they develop the key skills which allow them to contribute to the liquidity, transparency and general effectiveness of the organisation’s cash management. The skills that are becoming increasingly valued in CFOs I would summarise as follows; an in-depth understanding of an individual company’s business operating environment; risk management skills; the ability to communicate well with people from governments; banks and also local populations. Such skills are all within the reach of treasurers who are ideally placed to add these abilities to their current skillset and maximise their chances of becoming a CFO.

Next question:

“What’s new in the Latin American treasury space? Are there any cash management or payment innovations treasurer should be aware of, for instance?”

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