Success at the Market Rate

What drives company financial performance?  It’s a soup with a plethora of ingredients, of course.  But key traits possessed by CFOs certainly correlate with revenue growth, according to SAP and Oxford Economics.

The firms surveyed 1,500 CFOs from around the world and divided the respondents into two categories: “finance leaders” and “others”, based on their answers to a handful of questions.  The leaders, who comprised only 11.5% of participants, were defined as having self-reported that they:

  1. Have strong influence beyond the finance function.
  2. Drive strategic growth initiatives
  3. Improve efficiency with automation
  4. Are very effective at core finance processes
  5. Collaborate regularly with business units across the company
  6. Work closely with the governance, risk, and compliance teams and excel at handling regulatory change

While strategic and technological acumen are the CFO capabilities that garner a majority of the spotlight these days, the study identified something else as the “magic ingredient” for success: the ability to collaborative effectively.  In fact, 46% of finance chiefs at companies with flat or negative revenue and profit growth said the finance function’s isolation hinders achieving business goals.  That percentage shrunk to 28% among respondents whose revenue grew 5.1% to 10%.

At the fastest-growing companies, 63% of respondents said finance has a strong influence over the supply chain and procurement, compared with 49% at companies with revenue growth of 0.1% to 5%.  And 70% of the faster-growing companies reported that finance influences innovation and new product development, vs. 53% at slower-growth companies.

More financial leaders than non-leaders said their company provides business analytics and training programs to encourage different units to work together productively.

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