The field of finance requires a strong set of structured competencies and disciplines.
Among many other critical skills to be discussed in this paper, financial leaders make sure financial records are accurate, data is available to understand the performance of the business, cash is available to run the business, and work is performed to make sure the business complies with regulatory requirements. While the nuances of the discipline vary somewhat by industry, the objectives are basically the same.
Finance, while it may be not the most glamorous function within a company, is one of the most critical. Considering the link between performance of the finance function and the success of a company, hiring of financial leaders are some of a company’s most important decisions.
In identifying a high quality financial leader, a hiring manager must consider four key factors:
o Business Acumen – Has the candidate exhibited a general business understanding and have specific accomplishments where they influenced the business in a positive way. Does the candidate have a sufficient level of experience required for the position? There is no substitute for experience. Unless you are willing to accept the learning curve, you don’t want to go short on experience of a candidate. Finally, does the business philosophy and personality of the candidate fit with that of the organization?
o Technical Skills – A candidate must possess specific skills relative to the financial position they are seeking. A Controller must possess knowledge of Generally Accepted Accounting Principles (GAAP). One indicator of that level of understanding is whether the candidate has earned their Certified Public Accountant (CPA) certificate. A candidate for the head of credit must be able to interpret customer financial statements in order to establish credit limits. Someone in charge of Sarbanes Oxley compliance must be knowledgeable of the requirements. Someone in Investor Relations or Financial Reporting must know the rules as it relates to reporting to the Securities and Exchange Commission, investment analysts, etc. Depending on the role, there can be specific technical requirements that are critical to the position.
o Analytical Skills – Financial analysis involves working with a significant amount of data. A financial leader must be able to determine what metrics are critical to the business, identify the critical components, or factors, that influence the business, interpret the financial results, and communicate the information in a manner that is understandable by nonfinancial associates. A finance department must be able to provide information needed by a company’s leadership team in order to make sound business decisions. This involves listening to the needs of the functional leaders, knowing what data is available, and deciding the best way to provide the data. A financial leader must be able to assess the reasonableness of forecasted data. Does forecasted data make sense given market conditions, trends, and the current economic environment?
o Timely and Accurate – A finance department must be able to report data timely and it must be accurate. The financial leader must take ownership for the accuracy of the financial information. This includes reviewing processes involved in compiling data and identifying opportunities to shorten those time limits so data can be available faster to the organization.
In today’s job market there are a lot of financial candidates that have a long track record of providing the above skills to their employers. However, a company should be looking for someone to be a Champion in their finance department. A financial Champion possesses all the above skills, but is also someone who will make the finance department a key business partner to the organization. A Champion is someone your business leaders will want to work with to get things done and help elevate their performance. This Champion will help give your company a competitive edge by raising the performance bar in their respective area, which will become contagious throughout the organization.