Turning Finance Managers into Strategic Business Partners

The Challenge

Chief financial officers (CFOs) must master more than cash flow and revenue models; they must be strategic partners in the business.

According to IBM's 2010 Global CFO Study, there is a growing gap between the importance of core finance responsibilities and broader strategic questions that affect their companies' long-term success. The study found that since 2005, the importance of integrating information has more than doubled, while the priority of risk management has risen 93%. Nearly half the CFOs say their finance organizations are not effective in the areas of strategy, information integration, and risk and opportunity management.

In today's finance matrix organizations, managers report to a local business unit leader and a corporate CFO — a structure that can create distrust with their primary client. 

"In this post–Sarbanes-Oxley world, it continues to be important to provide high-quality, transparent information on what has happened in the past. But, at the same time, CFOs and other finance leaders feel they're being pulled more and more to work with business unit leaders to find growth opportunities,” observes John Percival, PhD, Adjunct Professor of Finance, the Wharton School.

"Just about every major company is talking about growth and picking the right growth opportunities. Often, finance people are not playing the right role in those conversations that they should be playing. They need to think more strategically and to be proactive as trusted advisors to the business."
— John Percival, PhD, Adjunct Professor of Finance, The Wharton School

The Impact

From the team-building exercise to the course content to the sessions that focused on influence and persuasion,  finance managers from Paris-based Schlumberger, the world's leading oilfield services provider, are using program learnings to influence company leaders on the financial implications of key decisions.

Participants already report the program's positive impact, which has enabled them to:

  • Move from being cost reduction oriented to being growth oriented.
  • Use valuation tools in new ways to assess the performance of the business, especially during the bidding process.
  • Realize how the organizational structure of the business can affect the way people behave.
  • Adapt their communication skills to more effectively influence and persuade others inside and outside the organization.

The Goals

Since 2002, the Wharton School has offered a comprehensive five-day Executive Education program, The CFO: Becoming a Strategic Partner, to elevate finance leaders' business acumen, strategic thinking, and communications skills.

Wharton has delivered a customized version of the program to major oil and gas, consumer goods, manufacturing, and aerospace and defense firms, including Schlumberger. During the past three years, more than 100 Schlumberger finance managers have completed the program, gaining:

  • Financial tools and techniques to enhance their financial acumen
  • Enhanced understanding of underlying business drivers
  • Frameworks and tools to enhance decision making
  • Insights to elevate themselves into more effective strategic business partners

The Solution

During the program, managers explored their roles as business advisors during strategic decisions. Participants gained critical skills to help them drive their business forward, including:

  • New ways to use financial tools to help non-finance colleagues see if a strategy or investment will succeed.
  • Frameworks that expand participants' strategic thinking skills and make them proactive, rather than reactive, advisors.
  • Techniques to simplify the technical jargon of finance and communicate financial insights to non-financial leaders with greater impact.

“Our program works very well because we have an a team of faculty that excels in all three of these areas,” says Dr. Percival. “These faculty help functional managers think more strategically, communicate even technical concepts more clearly, and know finance and the key determinants that will make an investment or other strategy successful.”

Would you like to learn more?

To find out how Wharton Executive Education can help your company achieve its own customized solution, please contact Deb Giffen, Director, Innovative Learning Solutions, +1.215.898.2599 or giffend@wharton.upenn.edu.