The CEO’s Role Is Changing. What It Takes To Get The Top Job Now

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Recruiters, leadership experts and board directors say the path to the top job, and the skills needed to succeed in it, has changed.

The mission of a CEO used to be fairly straightforward. Set the vision and strategy of your company and make sure the right people are in the right roles. Be sensitive to the needs of employees, customers, suppliers and others in your orbit but make shareholders your top priority. Above all else, grow as fast and as big as you can.

But as the world has changed, so have the demands of the CEO job— and the skills needed to succeed in it. Between the pandemic and polarization, climate change and cancel culture, the role has evolved in ways that few would have imagined a few years ago. CEO contenders lack a clear grasp on how the jobs they’re pursuing will change while those at the helm can offer only limited guidance.

What many CEOs increasingly realize is that the change has to start from within. Dick Patton, who co-leads the global CEO practice for recruitment firm Egon Zehnder, detected a mood of deep reflection among the 972 global CEOs they surveyed in a study last year. Nearly 80% of CEO participants said they needed to transform themselves as well as their organizations, and be more adaptive and self-aware.

Part of what’s fueling a new mindset is the recognition that trust and transparency have become vital to business success. Stephen Miles, an executive coach and founder of the Miles Group, argues that the CEO has gone from being the leader who runs the company to the person who must also promote the company’s purpose, impact and credentials as an employer of choice. In short, they must defend the company’s license to operate.

That requires “more influence-building, team-building, people-related skills,” says Miles, not to mention the courage to initiate change on weak signals and be open about their own struggles to connect with people. Emotional intelligence becomes more critical as the demands for CEOs to engage in political hot-button topics mount.

“You have to anticipate whether someone will have the instincts and the intestinal fortitude,” says Jane Stevenson, a vice chair at Korn Ferry who leads its global CEO succession practice. “The expectation of CEOs to take a stand—and to know when to take the stand and when to be quiet—is huge. It’s always been about who the person is. Now it’s who the person is, squared.”

A Need For Bolder Boards

Boards are starting—slowly—to think more broadly about the skills and profile needed to succeed as a CEO in this environment. Experience in operating and running a business is still essential—but a wider range of resumes and roles is under consideration. Diversity candidates are in higher demand, as are traits such as agility, resilience and political judgment.

“Boards are bucking conventional wisdom a bit more,” says Tim Conti, managing partner of executive search firm ON Partners. “The best boards recognize a CEO is just one member of an executive team, and if complemented properly, can come from a lot of new backgrounds.”

That doesn’t mean directors are rushing to take risks. CEO turnover dropped during the pandemic, as many boards put a premium on stability and familiarity to get through the crisis. While CEO openings among Fortune 500 and S&P 500 companies have picked up, most of those slots are filled through internal promotions, according to the latest Crist Kolder Volatility Report of America’s Leading Companies. Only 18.9% of new CEO hires through July were external candidates, versus 30.7% in 2019.

That could indicate more robust succession planning and leadership development—or a lack of imagination at a time when companies need it most. Jim Citrin, who leads Spencer Stuart’s CEO practice, argues that many boards are being too conservative at a time when they need the courage to make bold choices. “Some of the best-performing CEOs were not the obvious choices,” says Citrin.

“Boards basically define success as an internal promotion; failure as having to go outside. In this moment of change and dramatic stakes, all of us need to be creative and courageous.” While the usual route to the CEO’s office is through the president’s or COO’s job, that is not always the best path. A recent report from Spencer Stuart found that over the past 20 years, 85 percent of S&P 500 CEOs have come from one of four “last mile” roles: chief operating officer, a division-level CEO role, chief financial officer and “leapfrog” leaders who held executive jobs another rung or two from the top.

The most successful CEOs were those promoted from a few levels down; the least were CEOs who came from the CFO function. While the latter group knew how to turn a profit, the study found they weren’t as strong at driving top-line growth.

“Some of the best-performing CEOs were not the obvious choices … In this moment of change and dramatic stakes, all of us need to be creative and courageous.”

Jim Citrin, Spencer Stuart

The message is not to discount the value of leading the finance function but rather to supplement it with other responsibilities and C-suite roles. Bonnie Gwin, co-managing partner of the global CEO and board practice at Heidrick & Struggles, says there is demand “for CFOs who are strategic and have played really strategic thought partner roles with their CEO.”

There’s a growing appreciation for experience in other C-suite roles, too. A stint as a chief marketing officer or chief customer officer can be essential for running consumer-facing companies. The chief product officer is also gaining ground as a stepping stone to the CEO job, according to Mark Oppenheimer, CEO of Modern Executive Solutions, as it often “brings together sales, product, strategy and operational responsibilities.” Jeff Christian, who leads the search firm Christian & Timbers, agrees, adding that “product people are becoming the next generation CEOs.”

Perhaps the most common resume builder that indicates a CEO could be destined for the corner office is experience on a high-profile public board of directors. “Getting on some of these major boards is a very interesting corollary to someone getting CEO calls,” says Jana Rich, founder and CEO of the San Francisco-based Rich Talent Group. “You’re networked in a different way. You’re getting incredible exposure to people in the boardroom.”

A Premium—But Limited Progress—On Diversity

Whatever their background, one promising sign is that new CEOs are more likely to be women or people of color. Of the 682 CEOs tracked in the Crist Kolder report, 7.3% were women as of July 31 – up from 6.9% last year and 1.9% in 2010. Heidrick & Struggles took an even broader look at 1,095 CEOs in 24 countries and found women accounted for 13% of new CEOs during the first half of last year, about double from six months earlier.

Racial diversity is a slower climb, although Indian-born leaders continue to ascend to CEO roles, most recently at companies like Starbucks and FedEx. When it comes to the skills in demand for CEOs, some measures of potential remain constant. After studying data from thousands of CEO assessments, Elena Botelho, a partner at leadership advisory ghSMART, distilled the core behaviors for success to the acronym DARE – decisive, adaptable, reliable and engaging for impact.

While the framework is unchanged, Botelho says “adaptability became really paramount” amid the pandemic, which is less about the ability to spot a shift than to immediately respond to it. Resilience is critical. For current CEOs, the exhaustion of the last two years is real, despite it being a job where the median pay was a record-high $14.5 million last year for S&P 500 CEOs, according to an Equilar/Associated Press study.

The rinse-and-repeat series of crises and the dizzying rate of technological change is shifting how CEOs lead, how quickly they’re ready to pass the baton, and what their ambitions may be. While the current generation of CEO-ready leaders has arguably lived through more booms, busts and industry-shattering innovations than the people who came before them, many still feel unprepared. Faced with the prospect of added stress and scrutiny, some recruiters say a lot of candidates also want the job less and less.

They can earn millions through other C-suite roles without the constant scrutiny and stress. Still, for as long as there have been ambitious people, there have been people ambitious to lead. Increasingly, the brass ring is likely to go to those who are ambitious to learn. As Matthew Smith, an executive coach and former chief learning officer at McKinsey puts it: “Leaders who adapt and pivot with speed in the face of opportunities will outperform those who are over-reliant on the skills and habits that got them to the top.”

I am an assistant managing editor at Forbes, overseeing our editorial team that runs the C-suite communities, careers, ForbesWomen, 30 Under 30, and related coverage.

I am a Senior Editor at Forbes, leading our coverage of the workplace, careers and leadership issues. Before joining Forbes, I wrote for the Washington Post for more than a decade covering

Source: The CEO’s Role Is Changing. What It Takes To Get The Top Job Now

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Why Chief Human Resources Officers Make Great CEOs

For decades the corporate HR department was seen as a back-office function, a cost center focused on mundane administrative tasks such as managing compensation and benefits plans. But over the past 15 years Ellie Filler has noticed a dramatic change. Filler, a senior client partner in the Swiss office of the executive recruiting firm Korn Ferry, specializes in placing chief human resources officers (CHROs) with global companies. For years many of the HR chiefs she recruited reported to the COO or the CFO and complained that they lacked real influence in the C-suite.

Today, she says, they often report directly to the CEO, serve as the CEO’s key adviser, and make frequent presentations to the board. And when companies search for new CHROs, many now focus on higher-level leadership abilities and strategy implementation skills. “This role is gaining importance like never before,” Filler says. “It’s moved away from a support or administrative function to become much more of a game changer and the person who enables the business strategy.”

To investigate the CHRO role within the C-suite, Filler worked with Dave Ulrich, a University of Michigan professor and a leading consultant on organization and talent issues. In looking at several sets of data, they found surprising evidence of the increasing responsibility and potential of CHROs.

First, in order to understand the importance of the CHRO relative to other C-suite positions, including CEO, COO, CFO, CMO, and CIO, Filler and Ulrich looked at salaries. To identify the best performers, they found the top decile of earners in each role. Then they averaged the annual base compensation of each group. No surprise: CEOs and COOs are the highest-paid executives. But CHROs are next, with an average base pay of $574,000—33% more than CMOs, the lowest earners on the list. “Great CHROs are very highly paid because they’re very hard to find,” Ulrich says.

The researchers also studied proprietary assessments administered by Korn Ferry to C-suite candidates over more than a decade. They examined scores on 14 aspects of leadership, grouped into three categories: leadership style, or how executives behave and want to be perceived in group settings; thinking style, or how they approach situations in private; and emotional competency, or how they deal with such things as ambiguity, pressure, and risk taking. The researchers then assessed the prevalence of these traits among the different types of executives and compared the results.

Their conclusion: Except for the COO (whose role and responsibilities often overlap with the CEO’s), the executive whose traits were most similar to those of the CEO was the CHRO. “This finding is very counterintuitive—nobody would have predicted it,” Ulrich says.

The discovery led Filler and Ulrich to a provocative prescription: More companies should consider CHROs when looking to fill the CEO position. In the modern economy, they say, attracting the right talent, creating the right organizational structure, and building the right culture are essential for driving strategy—and experience as a CHRO makes a leader more likely to succeed at those tasks.

The advice comes with some caveats. First, Filler and Ulrich studied only the best performers, so they’re pointing to a small subset of CHROs as having corner-office potential. They don’t see a path to the top job among people who have spent their careers in HR; instead, they are touting the prospects of executives who have had broad managerial experience (and P&L responsibility) that includes a developmental stint running the HR department. They emphasize that any CHRO who aspires to become a CEO must demonstrate capabilities in a host of skills required of top leaders.

“The challenge for CHROs is to…acquire sufficient technical and financial skills, in early education and in career steps along the way, if succession to CEO is a desired outcome,” they write in a white paper about their research. Indeed, some companies, including Zurich Insurance, Nestlé, Philip Morris, and Deutsche Bank, do put high-potential executives through a developmental rotation in a high-level HR job. (For one view on facilitating such developmental opportunities, see “It’s Time to Split HR,” by Ram Charan, HBR, July–August 2014.)

Filler and Ulrich highlight two examples of prominent CEOs who had developmental stints in HR earlier in their careers. Mary Barra, the CEO of General Motors, served as the carmaker’s vice president of HR for 18 months, and Anne Mulcahy, Xerox’s CEO from 2001 to 2009, ran that company’s HR operations for several years in the early 1990s. It’s no coincidence that both are women: According to the researchers’ data, 42% of high-performing CHROs are female—more than double the share in the CMO position, the next highest (16%). One implication: If more companies envisioned CHROs as potential CEOs, the number of female CEOs could dramatically increase.

In their white paper Ulrich and Filler also report on what CEOs and CHROs have to say about the changing nature of the top HR role. Several CEOs see the CHRO as C-suite consigliere. “It is almost impossible to achieve sustainable success without an outstanding CHRO,” says Thomas Ebeling, the CEO of the German media company ProSiebenSat.1 Media AG and a former CEO of Novartis. “[The CHRO] should be a key sparring partner for a CEO on topics like talent development, team composition, [and] managing culture.”

Peter Goerke, the London-based group director for HR at Prudential, agrees with Filler and Ulrich that although deep skills in marketing or finance might once have given CEO aspirants a significant competitive advantage, today a broader set of people-focused skills can be more useful. “Succession to a CEO role requires a balance of technical and people skills,” he says. “For all C-suite roles, and often at least one level down, there has been a gradual shift in requirements toward business acumen and ‘softer’ leadership skills. Technical skills are merely a starting point.”

In spite of the historic bias against the CHRO function, the rising status of HR leaders is not entirely surprising. Over the past 20 years Jim Collins and other management theorists have focused on talent strategy as the prime determinant of corporate success—an idea Collins popularized in phrases such as “Get the right people on the bus” and “First who, then what.”

In her work recruiting CHROs, Filler has seen a growing recognition that those aphorisms hold true. “If you don’t have the right people in the right places—the right talent strategy, the right team dynamics, the right culture—and if you don’t proactively manage how an organization works from a culture and a people perspective, you’re on a serious path to disaster,” she says. Conversely, a top-notch CHRO can help a company plot a more successful future.

Source: Why Chief Human Resources Officers Make Great CEOs

Critics: by MasterClass staff

A chief human resources officer (CHRO) is an executive-level position that oversees human resources management for a business or organization. The CHRO—sometimes referred to as the chief people officer (CPO) or executive vice president of human resources—directs the HR department and carries out HR policies. Some of the HR functions that CHROs oversee include talent acquisition and retention, performance management, and employee engagement. As the chief HR officer, a CHRO also helps to develop the workplace culture and supports business goals and diversity, equity, and inclusion initiatives.

As a leadership role, the CHRO job description includes overseeing the HR directors and HR team carrying out the company’s employee-based initiatives. The CHRO reports directly to members of the top C-suite executive team—often the chief executive officer (CEO) or chief operating officer (COO)—and works to align the HR strategy with the company’s strategic plan and business objectives.

A few of the responsibilities of a CHRO include:

  1. Benefits and labor relations management: A CHRO oversees the implementation of HR software to streamline healthcare and retirement programs, government compliance requirements, and employee relations. They explore partnerships to offer employees new benefits such as wellness programs or professional development opportunities.
  2. Guides company culture: This role in HR leadership includes helping to define and develop company culture for the workforce, executive leadership team, and other stakeholders. Maintaining employee engagement and productivity through incentives, clearly defined career paths and equitable compensation packages, and a commitment to diversity in hiring practices are core components of this human resources function.
  3. Oversees talent recruitment and retention: Talent management is another cornerstone of human capital management and the CHRO role. A CHRO develops and adopts a talent strategy that outlines how to recruit, hire, develop, and retain employees. The talent strategy includes offering equal opportunities to all candidates, employee training initiatives, career development programs, and succession planning, which is a strategy to identify potential leaders when companies change management.

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Citi Pledges $1 Billion To Narrow The Racial Wealth Gap, Confront Wealth Inequality

On Wednesday, Citigroup, the nation’s fourth largest bank by asset size, pledged more than $1 billion over the next three years to address the widening racial wealth gap and increase the economic mobility of Black Americans.

“The pandemic is a health crisis with severe economic implications and it’s led to an unveiling of the systemic racism that has existed in this country for far too long,” says Citi’s CFO Mark Mason, who’s part of a small cadre of prominent Black executives on Wall Street.

Citi’s announcement follows that of Bank of America’s in June pledging $1 billion  to advance racial equality and economic opportunity over a four-year span.

The coronavirus pandemic and subsequent demonstrations against the killings of Black people have placed a searing spotlight on existing racial disparities in the U.S., bringing them to the fore of the business world’s conscious.

“It has been a catalyst for many companies to really try and get after this in a substantive way, and for Citi, it’s certainly caused us to take a step back,” Mason says.

“The killings of George Floyd in Minnesota, Ahmaud Arbery in Georgia and Breonna Taylor in Kentucky are reminders of the dangers Black Americans like me face in living our daily lives.” Mark Mason, Citi CFO

In the wake of Floyd’s death in May, Mason penned a candid and poignant letter to the bank’s corporate blog, wherein he detailed Floyd’s last minutes alive and acknowledged that the latest deaths of Black citizens in police custody were “reminders of the dangers Black Americans like me face in living our daily lives.”

The letter was widely circulated among business leaders, including Citi’s outgoing CEO Michael Corbat, who encouraged employees in an internal memo to do their part to create a “truly equal and just society.”

As protesters rallied across the country, reigniting a national conversation about race, Corbat challenged his executive reports to conceive a strategic initiative that would address key factors of economic racial injustice and deliver meaningful impact to the Black community.

Those executives swiftly assembled a team of business leaders throughout the firm to devise what would later form Citi’s $1 billion commitment to help advance racial equity and allay the financial drag Black people experience in the U.S.

The funds will be directed toward expanding access to banking and credit building in communities of color, investing more heavily into Black-owned businesses, promoting the growth of Black home ownership and strengthening Citi’s antiracism policies and practices.

Nearly half of the three-year investment will be meted out to boost homeownership for people of color, which has historically been one of the primary drivers of wealth creation in the U.S., and support affordable and workforce housing projects by minority developers. Just under $400 million will go toward procurement opportunities for Black-owned business suppliers while $50 million will go toward additional impact investing capital for Black entrepreneurs.

Citi is allocating $100 million to support the growth and revenue generation of Minority Depository Institutions, which play a critical role in fostering the economic viability of the communities they serve, by supplying them with $50 million in growth capital. The bank’s philanthropic arm, Citi Foundation, will receive the remaining $100 million to provide economic opportunities for young people in underserved communities.

Citi is also scrutinizing some of its own longstanding policies. The bank says it will develop standards for inclusive software design that eliminate bias, expand Citi’s capital market activities with minority-owned broker dealers and increase the representation of people of color on Citi accounts and within their leadership teams.

Mason says that weeding out a company’s underlying and often deeply rooted biases requires a thorough probe and heavy introspection. “It’s not until you take a hard look at those things—the screening processes that exist, the age-old criteria that’s been designed—and are challenged to see who they’re inadvertently leaving out or boxing out, that you can then change them in a way that helps to eliminate those obstacles.” 

The bank’s financial commitment comes on the heels of a new Citi-sanctioned report that puts a numerical figure behind the economic cost of Black inequality in the U.S. Published on Monday, the analysis found that nearly $5 trillion could be added to U.S. GDP over the next five years if four key racial gaps for Black people—wages, education, housing and investment—were closed today, a .4% annual increase to U.S. GDP growth. Closing those key racial gaps 20 years ago could have yielded a $16 trillion gain to the U.S. economy, according to the report.

“Addressing racism and closing the racial wealth gap is the most critical challenge we face in creating a fair and inclusive society,” Corbat, Citi’s CEO, said in a press release announcing the bank’s pledge. “We are bringing together all the capabilities of our institution…like never before to combat the impact of racism in our economy.”

Citi will establish a council of senior leaders from across the company to assess its performance and hold businesses accountable to the bank’s racial equity commitment. Follow me on Twitter. Send me a secure tip.

Ruth Umoh

 Ruth Umoh

I’m a reporter covering the various aspects of diversity and inclusion in business and society at large. Previously, I was a reporter at CNBC, where I focused on leadership and strategic management. I’ve also dabbled in video journalism, working as a breaking news digital producer for New York Daily News, followed by a yearlong stint as a producer at Rolling Stone. My work has been featured on New York Daily News, Yahoo Finance and Time Out. I’m a proud alumna of Columbia University Graduate School of Journalism, receiving honors for my investigative thesis on the alarming number of physicians dying by suicide. Tweet me @ruthumohnews or send tips to rumoh@forbes.com.

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Bank of America has announced that it is committing $1 billion to fight racial and economic inequality, pointing to recent civil unrest over racism in the country as its impetus for the major move.

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How To Put People First In The Midst Of Crisis With Booz Allen CFO

When a global crisis – such as the COVID-19 pandemic – strikes, companies face difficult choices around issues like layoffs, talent and prioritizing corporate purpose beyond shareholder value. At Booz Allen, one of the world’s largest IT consultancies, CFO Lloyd W. Howell, Jr., was faced this year with a wholesale transition to remote work while also looking after the needs of the company’s 27,000 employees. Remarkably, Booz Allen has avoided any layoffs despite the extremely challenging global environment.

I recently conducted a Q&A with Lloyd to ask him about how he, as CFO, was able to navigate one of the most difficult challenges in decades. I also delved into Booz Allen’s broader approach to talent management, which informed Booz Allen’s decision to retain all staff during the COVID-19 crisis. Finally, I asked Lloyd about his own experiences and outlook as an African-American CFO at a time when businesses, including his own, are confronting and being called to act upon ongoing racial inequity.

Jeff Thomson: Amid COVID-19, business continuity was top of mind for CFOs who were tasked with hard decisions like staffing cuts. As many companies laid off staff for cost containment, Booz Allen, in contrast, guaranteed employment and continuing benefits for all 27,000 of its employees through July 1. What cost containment measures did you put in place to ensure business continuity? What role did you play in the decision to keep all staff employed? How did you restructure financial resources to make this happen?

Lloyd W. Howell, Jr.: We sensed in late January that what was then an overseas pandemic could ultimately impact our business, and from those early weeks we established three priorities that drove every decision: First, we would protect the health of our people, their families and our communities; second, we would continue to support the critical missions of our clients, and third, we would work to ensure the financial and institutional resilience of our firm.

In March, we saw that our employees, who directly deliver our revenue and were now mostly teleworking, were fearful about the pandemic’s impact on their jobs and families. We leveraged our business’ strength to remove that worry quickly and guarantee full job security through at least July 1. We are a values-driven firm, and that approach to initially support our people was core to what we stand for.

We ran multiple models to assess the potential COVID-19 adverse impacts to our firm. My finance organization worked with experts in our health care practice to estimate how much sick leave or elder and childcare leave people might end up needing, how much our client work could be impacted, and how our communities could be hit.

Those models indicated that $100 million, referred to as our Employee Resiliency Fund, could cover it, and other financial modeling helped us determine where we could repurpose existing funds without impacting our overall financial performance. Given our exceptionally strong balance sheet built over the years, we had the flexibility to take care of our people. Separately, we worked with our People Services organization to determine where to apply those funds.

We found the money in some obvious ways, and some tougher ones. We knew no one was going to be traveling to or sponsoring conferences and we could discontinue large celebrations like holiday parties and off sites this year. Beyond that, senior executives sacrificed some compensation, and we held off promotions, raises and hiring in parts of the business.

As a result, beyond preserving jobs (and we’ve still not laid anyone off due to COVID), we funded emergency time off, more dependent care, greater funding of our Employee Resilience Fund and grants to our local communities. With reduced job worries, our employees have been more productive than ever, our financial performance has been exceptional and we still have some of the $100 million available if there are new COVID-related impacts later this year.

Thomson: Like many other companies, Booz Allen had to rapidly transition much of its staff to working from home amid the pandemic. As working from home becomes the new normal, is the company rethinking investments in facilities and telework technologies, staff management and customer service? How are you contributing to these conversations as CFO?

Howell: We were in a relatively strong position from a technology standpoint when the move to telework began. During the week of March 9, we determined that majority telework was necessary; we did a test run with maximum telework among our 27,000-plus employees that Friday and when we saw the network and our collaboration tools holding up so well, we announced the move to maximum telework on Sunday. We went from about 20% telework to well over 80% almost overnight, and eventually to over 90%. For those employees whose jobs required them to be in our office or on a client site, we focused on developing extensive safety protocols.

We discovered that people were actually more productive at home, and taking less time off, which has resulted in strong business performance in our past two quarterly earnings reports. However, it is clear this level of work is not sustainable. We know that the stress of childcare, schools, parent care and other issues are wearying, and we’ve placed a great focus on providing resources, mental health support and other assistance. We have also been very proactive in encouraging people to take time off to refresh themselves; even a week off helps people return to work in a better mental place. While some employees begin to return to the office, most will work from home for some time, and we continue to look at and assess the challenges of working from home in this environment from a financial and people management focus.

My organization is looking at continued investments in technology and other ways to support robust telework, and we initiated projections regarding our future real estate needs but, frankly, it’s too early to consider major decisions. We just don’t know the full course of this virus and what will happen afterwards. We also are listening closely to clients, because they are finding their way, and because their needs will impact our plans.

Thomson: Major upheavals and organizational changes make it more important than ever for companies to have strategies for talent acquisition and retention. What is your approach to talent management as head of Booz Allen’s finance function? When it comes to hiring finance professionals, what skills and types of backgrounds do you look for? How can finance education programs better equip entry-level employees with these skills?

Howell: As an African American executive with an engineering degree, I’ve seen firsthand the impact of diversity on organizational and financial success. In my current CFO role, I’ve never been more convinced that diversity is core to operating as a high functioning organization that will attract and retain talent, particularly in times of crisis. Long before this summer’s national focus on race and social equity – a topic on which my firm has been outspoken – I have focused on developing and recruiting against a broader definition of diversity within my organization.

Beyond the traditional measures of diversity, I find an even greater impact on business performance comes from giving the same level of attention to recruiting and developing staff with diverse skillsets and training them on how to apply their unique professional expertise to higher-level financial problems or business crises within our firm. Within my department, we have staff trained in tax accounting, Sarbanes Oxley regulations, treasury functions, government accounting, compliance and other areas.

But to raise this diversity of training from a slate of staff with functional skills to the level of influential strategic business partner requires development, mentoring and fostering an environment of credentialization. An important part of diversity in a financial organization is supporting and encouraging diversity in credentials and certifications that provides a level of trust and confidence to the larger organization we serve. 

We ask our financial staff to look at larger problems with a “CFO mentality,” meaning that every individual decision by staff at every level should be made as if they are sitting in my own chair, looking more broadly at impacts across our company and market. To get there, as an example, we train our professional staff to look beyond the mechanics of cash collections, to understand the end-to-end process and impacts, starting with client issues related to payment timing all the way to the impact on cash deployment and guidance to investors. With that context, their diverse core skillsets have greater influence and inclusion in corporate decision-making.

Thomson: As you just indicated, more business leaders are understanding the tangible benefits diversity delivers. What does Booz Allen do to attract and retain minority talent? What are your personal perspectives on this, as an African American finance professional who has worked with Booz Allen for most of his career and has reached a senior leadership position?

Howell: I spoke about this on Booz Allen’s most recent earnings call, in which we opened our call – before talking about our finances – with a lengthy discussion of our firm’s approach to addressing race and social equity. The past few months have been challenging for our country and our firm. July 18 marked 32 years since the day I joined Booz Allen. This firm is my family, and just like with all families, sometimes difficult conversations are needed. We’re in one of those times. We have one of the most diverse leadership teams in corporate America today, and our Board of Directors is also much more diverse than most. I’m proud of that; it’s an important start.

But it is also clear that we have work to do inside Booz Allen and throughout society. Given my place in this “family,” it was meaningful to me to help craft our six-point equity agenda that includes a full independent review of how all our business practices impact people of color, educational actions and philanthropic investments. To be a force for change in the world, we must start by ensuring that every person at our firm feels empowered, and that those who have been marginalized in the past know they have a voice, a seat at the table and an opportunity to thrive.

When employees and candidates see our commitment and the results of our efforts, it will reinforce their desire to continue to be a part of our work, and the success of the business and our clients.

Thomson: You began your career with Booz Allen as an engineer, before obtaining your MBA and then rose to a senior leadership role in the finance department. How did you bring your skills and background in the technical side of business to bear in being a leader and decision-maker? How does your engineering background inform your approach to finance?

Howell: I began with an interest in engineering, which led me to opportunities and increasingly greater responsibilities at Booz Allen, but I have always felt that no career is linear. Circumstances change, things happen, you learn and develop experience in new areas and these impacts can take you to a place you hadn’t expected. I ended up having decades of experience running parts of Booz Allen’s client-facing business.

I think that has made me particularly effective in my CFO role, in large part because I can communicate and articulate needs as I would have wanted to hear it in my previous roles. I’ve been in the shoes of my internal clients for a long time and appreciate the pressures they are under and the performance they are trying to achieve and how to help them as best I can to achieve that performance.

Among the most effective tactics for my own career success, I think, has been a willingness to admit when I am wrong and relying on mentors and my surrounding colleagues. When people try to “fake it until they make it,” eventually they are found out. I think there’s nothing wrong with admitting when you don’t know something. When you do, more times than not, folks are very open and helpful in response. Beyond that, I’ve always reached out to colleagues, mentors and coaches for advice and counsel. I think the best education and learning process is to learn from others. That was essential as I took over the CFO role. Finance is a language. To be good, I think you need to listen to others, understand and learn the language.

This article has been edited and condensed. Follow me on Twitter. Check out my website

Jeff Thomson

Jeff Thomson

I’m president and CEO of IMA (Institute of Management Accountants). Prior to joining IMA, I was the CFO for business sales at AT&T. In this column I’ll draw on my experience to offer CFOs – and their teams – insights and ideas related to challenges of the position, in light of market demands and global economic conditions. During my tenure at IMA, I’ve spoken on accounting regulatory issues, providing testimony to U.S. Congress on internal controls and risk management as it relates to Sarbanes-Oxley implementation, appearing before the SEC and PCAOB on critical regulatory matters impacting U.S. global competitiveness, and I served as a member of the COSO (Committee of Sponsoring Organizations) board of directors, which delivers global guidance on internal controls and enterprise risk management. I’ve authored numerous trade articles on accounting issues and recently contributed a chapter on ethical leadership to “Trust Inc.: Strategies for Building Your Company’s Most Valuable Asset,” entitled Trust: The Uncommon Denominator in an Uncommon Business World.

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How Effective CFOs Are Driving Companies to Success and Profitability

For more than 30 years, there have been articles touting the CFO as someone who “needs to be strategic: a business partner and not just a bean counter.”

Business writers still publish these articles today, but it’s time to stop. CFOs know they need to be strategic, and they know they need to operate the finance function. They don’t need an article to tell them that anymore. They do, however, need clear vision and technology to help them juggle new balls in the finance ecosystem: regulatory changes, artificial intelligence and Blockchain. Finance must add these balls to its mix while still juggling its “traditional” responsibilities of internal controls, compliance and closing the books quickly.

The future of finance is chockablock with new regulations, technologies and business models. The CFO must handle responsibilities beyond the finance function. They must also use strategic skills to transform the organization. Using the old, heavy, rigid ERP offerings will not provide the tools to nimbly break out of the “Old CFO” role.

This eBook provides a guide to the new technologies every CFO needs to succeed as well as a strategic framework for balancing traditional CFO responsibilities with their new, highly strategic ones.

By: Oracle View

 

Source: How Effective CFOs Are Driving Companies to Success and Profitability | Inc.com

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