How CFOs can promote job mobility to develop finance leaders with diverse capabilities and experience.
At one large U.S.-based enterprise, the head of financial reporting is an expert on U.S. Securities Exchange Commission (SEC) filing rules, but the CFO has made it a priority for her to lead cross-functional projects to speed the closing of the books and improve corporate governance. Those projects are foundering.
At a similar organization in London, the head of FP&A excels at his everyday responsibilities for budgeting and forecasting but has missed three major deadlines in planning a center of excellence for business analytics in Ireland.
Today’s finance leaders are expected to lead assignments for which they have no formal training or background
The best people to run these kind of large-scale, cross-functional projects — alongside the day-to-day responsibilities of functional leadership — have diverse experience built through lateral moves earlier in their careers. That is not the typical profile in finance.
“Today’s finance leaders are expected to lead assignments for which they have no formal training or background,” says Paul Dennis, practice leader at CEB, now Gartner. “Further, these new capabilities can’t be developed in a traditional finance career path, where employees specialize in one area over many years.”
Lateral job moves broaden experience and contacts
Just three or four years ago, CFOs only needed their leaders to be good managers, handle complex tasks and work directly with demanding senior stakeholders. The new generation of finance leaders needs to do all those things and, for example:
- Manage a global team in a complex organization working with multiple stakeholders to get things done
- Lead change initiatives within and outside the finance function
- Use the latest innovative technology to make the most of new capabilities, such as robotic process automation and digitalization
The best people for these emerging leadership roles are individuals who have built a greater diversity of experience through lateral moves earlier in their careers, which exposes them to a wide range of business challenges and encourages them to work outside their comfort zones early on, when they have the time to learn from their mistakes.
Actively promote job mobility
Many CFOs recognize the benefits of lateral job moves, but few report adequate mobility in their own finance teams. To encourage lateral job moves, CFOs must proactively overcome obstacles. Here are three steps to take:
- Recognize employees who opt for lateral moves. To create a culture where mobility is seen as an advantage, CFOs must recognize individuals who take a transfer and make sure an employee’s compensation doesn’t suffer as a result. This alleviates fear among employees that a lateral move will delay or derail their next promotion. One U.S. automaker uses “future résumés” to encourage employees to document their desired career path, including new skills, experiences and qualifications, and managers help employees realize those objectives through training, coaching and lateral moves.
- Encourage talent sharing. To make sure managers don’t hoard talent, CFOs can set clear objectives for them to share talent and create an environment in which employees feel they can move between teams without retribution. CFOs can reinforce the value of sharing with performance objectives and bonuses. One global mining corporation adopted a “manager once removed” model where, for example, the manager’s manager plucks talent from the finance team, assesses their potential and lays out future opportunities, leaving their line manager to focus on in-role development.
- Minimize business disruption. Moving employees around can be disruptive for the business, especially when every team has productivity and efficiency objectives. CFOs need a strategic approach to assignments to make sure the business doesn’t suffer and encourage different finance teams to embrace lateral moves. For example, job rotations can occur at quieter times, e.g., not during an end-of-year account closing.
Finance leaders now need a broad range of capabilities. To promote that development, CFOs must help their employees view and design their careers around experiences rather than the next rung on the ladder, demonstrate the long-term value to employees to motivate them to make short-term lateral moves, and make internal opportunities publicly and easily accessible.
Gartner for Finance Leaders clients can read more in Finance 2020: Stimulating Job Mobility in Finance.