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The CFOs Next Challenge: Applying Finance Talent to Create Enterprise Value
Finance executives face organizational issues and management expectations that go far beyond the traditional view of their positions. On October 17, 2007, two Deloitte Consulting LLP (Deloitte) professionals, who have broad experience in managing the performance and talent related issues resulting from business change, gave a webcast presentation on practical approaches for attracting and leveraging nance professionals that was attended by more than 900 business decision makers. Presenters were Ken Kunkleman and Paula Pilson, a Director and Senior Manager, respectively, in the Organization and Change Service Line of Deloittes Human Capital service area. During the one hour program, they shared key learnings from a recent global nance study conducted by Deloitte that revealed ways nance professionals can better leverage functional talent to create enterprise-wide value. According to Ken Kunkleman, As the CFOs role becomes more complex, incorporating the elements of steward, operations leader, strategist, and catalyst (stimulating behaviors to achieve strategic and nancial objectives), he or she looks around the nance organization and sees the need to bring a broader, stronger, deeper, and more innovative talent team to the challenges facing nance and the entire business. An online poll with webcast participants (see below) conrmed the scope of the issue: more than 40% of respondents said getting the right talent is a struggle and another 52% said theyve managed, but denitely had trouble at times. Paula Pilson noted that a number of issues contribute to the declining availability of top talent, including the rise in Baby Boom generation retirements, a widening skill gap between existing skills and the
Figure 1. Are you experiencing difficulty attracting the right kind of talent to your finance organization? (Votes received: 889)
No, we have finance talent breaking down our door 4.8%

increasing complexity of business operations; demands of a global market for talent; and shifting attitudes and expectations of Gen Xers and Yers. The top three emerging issues for webcast participants were growing skills gap, increasing complexity of business operations, and elevated regulatory and control pressures. Yet, Pilson emphasized, with compensation packages easily matched, recruiting costs soaring, and younger generations not as swayed by monetary rewards, nance leaders should know that buying talent is not the answer. In fact, there is a great deal to be said for companies investing more in the development and advancement of the people in their hallways today.
Figure 2. Which of these emerging talent issues do you feel the most in your finance organization? (Votes received: 933)
Retirement of baby boomers 5.0%

All of the above 25.5% Growing skill gap 27.5% Global talent markets 5.3% Complexity of operations 22.5% Regulatory and control pressures 14.1%

Yes, it is still a struggle 43.5%

Deloittes global nance talent survey, which explored the people side of nance, was conducted in conjunction with the Economist Intelligence Unit (EIU) in 2006. The study drew 636 respondents, representing global companies from a diverse range of industries with revenues of $1 billion or more. A pivotal nding was that two-thirds of respondents in the global study did not have a nance talent strategy and neither did most webcast participants. According to Pilson, the development of and commitment to a nance talent strategy one that is focused on nance skills and capabilities and coordinated with the talent strategy of the broader organization - is critical to truly getting the best performance from your nance talent. The rst step, she said, is to align the nance function with the overall business strategy. Once you know what is needed, evaluate existing talent, assess how well nance talent is being managed, then build a plan for getting where you need to gorecruiting to compensation to culture, and more.

All times, but we have been able to manage 51.7%

Audit . Tax . Consulting . Financial Advisory.

Figure 3. Do you currently have a finance talent strategy? (Votes received: 950)
What is a talent strategy? 12.0%
Yes, we have a talent strategy specific to the finance organization 18.3%

Figure 4. In which of these functional groups or positions do you have the most difficulty finding the appropriate talent? (Votes received: 906)
Other 12.9% Treasury 3.4%
Financial planning and analysis 28.6%

We dont have a talent strategy for the finance organization or for the company as far as I am aware 40.2%

Operations 8.6% We have a talent strategy, but it is not specific to the finance organization 29.6% Controllership 15.6% Accounting 31.0%

Among key insights gained from the Deloitte/EIU study were: Finance professionals, indeed, are in short supplyPut your organization on top of this challenge with the right talent strategy. Many finance organizations are ill-equipped to excel in value-adding activitiesBehavioral and technical competencies that are most important to nance today often are not well developed in nance departments; even CFOs are challenged by the four faces of their jobs. Most lacking are the strategist and catalyst roles, because the development of them has been less emphasized traditionally, and they are simply more difcult to learn and inculcate. Finance professionals working in financial planning and analysis are highly sought-after as future finance leaders, but are the most difficult to findYoure going to want to put more of your investment dollars here, including consideration of exible labor pools, such as contractors and consultants, and creation of a center of excellence. Branding finance as a career destination is critical to attract finance talent, but few companies do it wellAn essential ingredient here is effectively establishing a nance brand and delivering on the promises you make. The people in the hallways can quickly assess whether website design and recruiting efforts, for example, the efforts are real and sincere. Career development is critical to high-flyers; yet companies keep finance talent from pursuing opportunities outside of financeTake all of your people on the journey, while continuing smart succession planning and development with highperformers. Finance leaders urge those with CFO ambitions to take deliberate career steps and earn diverse business experience Many CFOs will agree that you cant do an effective job for nance if youre not embedded in the business strategy and understanding the bigger picture. As expected, one of the top three positions which webcast participants believe are most difcult to ll with appropriate talent is nancial planning and analysisa function that requires strong strategist and catalyst capabilities. Furthermore, in another online poll with webcast participants, it appears there has been only spotty emphasis on setting up opportunities for career development outside of the nance function (e.g., rotational programs, international assignments, and formal and informal mentoring).

Figure 5. Have you encouraged your finance employees to take Figure 5. Have you encouraged your finance employees to ta on opportunities outside of finance? For example, rotational on opportunities outside of finance? For example, rotational assignments or international assignments in the business. in the business. assignments or international assignments (Votes received: 913) (Votes received: 913)
Yes, we have a formal setwe have a formal set of Yes, of programs for doing this programs for doing this Our company is simply not Our company is simply not 7.9% 7.9% of a size where we can a size where we can of afford to do this afford to do this 19.5% 19.5%

No, we have not and dont plan on it anytime soon 15.3%

No, we have not and dont plan on it anytime soon 15.3%

Yes, but informally or on a case-bycase basis 36.5%

Yes, but inform or on a case-by case basis 36.5%

Like the idea but weve not and but weve not and Like the idea dont plan on it anytime soon on it anytime soon dont plan 15.3% 20.8% 15.3%

Conclusion

Theres no question that the heat is on for CFOs to nd new ways to create value across the enterprise. By leveraging nance talent and the people side of the value-creation equation, nance leaders will be better positioned to build an organization that delivers on the demand for that value in all four areas of current needsteward, operator, strategist, and catalyst, and not only in the traditional nance roles.

Driving Enterprise Value

To learn more about issues concerning enterprise value, visit the Driving Enterprise Value site on Deloitte.com. Youll nd tools, articles, newsletters, and books with practical approaches to help create value for your consideration. Or register for an upcoming Webcast in this Driving Enterprise Value series.
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