CFOs can learn from Formula 1 team Mercedes when working with their CEOs
Grant Greeff explains that CEOs and CFOs have clear lanes of accountability and need to trust each other.
You don't have to like Formula 1 (or Lewis Hamilton) to see the clarity of leadership in action between Team Mercedes CEO Toto Wolff and his strategy director James Vowles during a tense point in the 2021 Spanish Grand Prix.
Vowles took full ownership in his lane of strategy, and Wolff trusted in the decision despite having some doubts. He backed his teammate because he knew where his strategy director was coming from.
Yes, the decision came with risks. But what reward doesn't come with associated risks? In the end, this decision led to Mercedes (Hamilton) taking first place.
Moving away from F1 and into the C-suite of business, let’s explore the age-old relationship between CEO and CFO.
Any healthy business relationship requires that each party knows what to expect from the other. In other words, each party has a clear “lane” of accountability that is solely “owned” by the appropriate party.
Is being accountable the same as being responsible? No.
Multiple people can be responsible for completing a task, but only one person is accountable for the results of the said task. For example: A CFO may delegate their responsibility to compile financials to the reporting team, but the CFO is solely accountable for delivering those annual financial statements to the CEO.
So, what exactly is a CFO accountable for, to the CEO?
Traditionally, the CFO is accountable for the finances — the numbers person — because the “F” in CFO stands for financial. However, I challenge this popular stereotype, where the relationship between a CFO and CEO is distinguished by who is supposedly better at “the numbers”.
Think about it from the following perspective: Every operational task, from hiring an employee to selling a product, connects to at least two or more systems (paper or digital) in a business. In other words, there is a relationship between operational tasks and the systems on which they depend.
A fundamental difference between the CEO and CFO roles is less about who is better at numbers, and more about who is best positioned to understand the relationship between the company's operational tasks and the related systems. In other words, the CFO knows how systems talk to each other and enable the effectiveness of operational tasks.
I ask again, is it indeed “the numbers” that distinguish the CEO and CFO roles? No.
The CFO is the best person to be accountable for planning, implementing, managing and monitoring the effectiveness of operations connected to a web of systems deployed in a business.
If you're a CFO isolated to the stereotype of solely being accountable for “the numbers”, I encourage you to take proactive action to expand your horizon. Tap into what you already know, the relationship between operations and the systems on which they depend.
Be known for connecting the dots, not counting them.