What Savvy CIOs Know About CFO Speak
If theres a fundamental mistake made by CIOs in dealing with CFOs its going into meetings talking CIO talkclouds, SaaS, virtualizationand not getting that the CFO may not understand and, critically, may not care at all. A CFOs primarily workplace deliverable is not staying on top of tech trends, its keeping the business solvent and making sure its financial practices are in accord with Wall Street expectations and generally accepted accounting practices (GAAP).
Dont talk new technology with the CFO, talk the CFOs own language. Thats how to communicate, said Adam Nelson, director of management and IT consulting at Keane, a San Ramon, CA-based consulting firm. The secret to all successful communication, adds Matt Eventoff, a principal with Princeton Public Speaking in New Jersey, is know your audienceand then find out how to get the persons attention. With a CFO, talking technology is the fast track to losing his interest, but talking numbers triggers his enthusiasm. Its really that simple, said Eventoff.
Winning the CFOs attention is particularly critical today because, in most companies, the budgets for new technology are dwindling and for a CIO to get positive responses from the CFO and the rest of the C-suite, its become mandatory to phrase presentations in the language CFOs hold dear, said Nelson. You need to understand what the CFO has to accomplishWhat are his key to-dos?and tie in what you are doing to his goals. Thats how to get favorable results.
And then there are hardball steps to absolutely ensure you are on the same page as the CFO.
Bud Mathaisel, SVP and CIO of Achievo Corp., a global IT outsourcing company headquartered in San Ramon, urges that every CIO has a staffer in their group who is responsible for budgeting and all the financial accounting associated with IT. You need to manage, day by day, your spend." Turn this person into your own private, internal CFO. Do this and you wont be blindsided by questions from the companys CFO who, in turn, wont be shocked by what your group is doing because your steps are fully backed up by reports and analysis written in the CFOs own language.
While you are at this know that CFOs hate surprises, said Mathaisel (whose career includes stints as CIO at Solectron and Disney), and that is also exactly what Wall Street hates. The antidote, said Mathaisel, is to keep the CFO in the loop. If an initiative is going over budget or its not going to meet targeted goals be sure the CFO is clued into possible difficulties and, while you at this, never, ever dump those difficulties on the CFOs desk. Dont drop a hot rock in his lap. Go in with alternatives, with options, with different ways of solving the problem, suggests Mathaisel.
If one project will come in 20% over budget, be prepared to explain where and how that money can be made up by cuts in other parts of the IT budget. Also be ready to explain the costs associated with such cuts. Do all that, and you are honing in on how CFOs really think and thats a giant step to winning their confidence.
A last, big step, suggests Ilya Bogorad, a Toronto-based management consultant, is to go the extra mile and take a course that covers both the concerns of a CFO and their language. While you are at this, learn how to crunch numbers the way a CFO does. Probably a course lasting just a couple days is plenty but, however long it is, go in intending to graduate with new, fresh insights into how CFOs really think. You want to be able to, for instance, read the companys financial statements and also to produce a cost-benefit analysis thats written in the style the CFO uses, said Bogorad. "To succeed as a CIO you need to expand your skill-set beyond technology and into financial domains.
Now, as for the accounting acronyms in the dec, unravel their meaning at the American Institute of Certified Public Accountants website. Go ahead, bookmark the page and when you have a slow couple minutes, scroll through the list. Drop OCBOA on your CFO and watch his eyes light up!