One of the key drivers of a successful management team in today’s business is the relationship between the chief executive officer (CEO) and chief financial officer (CFO). To stay competitive in the evolving business landscape, these two executives need to create a partnership springing from collaboration, trust, and a mutual view on how to take their organization forward.
While both CEO and CFO are cut from the same cloth, they come from different backgrounds, which can sometimes trigger conflicts between them during strategic financial management. As such, the CEO and CFO partnership can often be a tug-of-war, and if not handled well, can result in loads of internal friction and disputes.
So, What to Do When the Pairing Goes Sour?
The CFO has to function well alongside the CEO. Of course, the pairing doesn’t always work, but when it does it can be a force enabler for a business. Here’re some tips to ensure an effective CFO-CEO partnership:
Starting from Day One
The CFO addresses the CEO except in extremely rare cases – it’s the most vital relationship CFOs have to get right from the start. Differences in opinions might likely happen after that but may not extend to the level of considerable problems if the relationship rests upon a solid foundation. While both these executives don’t have to be buddies, they need to work well together and exchange jokes during stressful times, as both the roles are pretty backbreaking.
Being United for the Board
The top management sets the pace for the entire organization – employees have a constant need for supervision and encouragement from those at the helm. If the responses from the senior level are diverse, morale could be affected, and, ultimately, the performance of the overall business could falter.
While it’s alright to debate topics, such as strategic financial management, behind closed doors, both CEOs and CFOs must always appear aligned in front of the board. The last things they want are distractions and a counterproductive team.
Having Mutual Respect
Both CEO and CFO need to accept that rifts are bound to happen, especially while devising financial strategies for business. The issue is how to resolve those rifts. Of course, there’ll always be disputes and natural tension between these leaders. But if there’s mutual respect and everybody understands their side, it makes navigating uncertainty and resolving conflicts pretty more straightforward.
In all cases, the CEO and CFO must acknowledge the roles they each play in the strategic financial management of the organization. The perfect CEO-CFO balance is when they are both 50% happy 100% of the time. If either one’s happy 100% of the time, either of them isn’t pushing the business hard enough, or they are about to blow apart.
The Duo Has to Strike a Balance for Overall Welfare
When it works fine, the collaboration between a CEO and CFO adds value greater than the sum of its parts, offering the organization the power to jump beyond the competition. And if the relationship goes awry, it can tear a business apart.
For businesses to succeed, these C-suite executives have to meet in the middle and deliver the top-tier Strategic Financial Management a company deserves. Leveraging skills such as emotional intelligence, communication, mediation, and lots of patience will help – in most cases – in aligning the two roles into one.
The end goal is the success of the organization, its workforce, and its shareholders, and for that, both the CEO and CFO will have to meet in the middle.
