As a result, the role of the Chief Financial Officer (CFO) has become increasingly important. Successful manufacturing CFOs possess key traits that enable their businesses to survive and flourish despite economic, geopolitical, and logistical challenges. Explore these essential attributes and discover what makes an exemplary CFO in manufacturing.

Supporting Innovation

For a manufacturing firm to stay ahead of the competition, it must always be on the lookout for new ideas, processes, and breakthroughs. A successful CFO understands the importance of innovation and dedicates resources to R&D, advocates for investments in advanced technology, and fosters an environment for creative thinking. By backing new initiatives and empowering teams to experiment, the CFO paves the way for growth and long-term success.

Data Analytics Expertise

The ability to analyze data and extract actionable insights is crucial for any organization. A successful CFO in manufacturing not only possesses acute financial acumen but is also skilled in working with complex data sets.

By consistently and effectively analyzing data, they can discover critical insights, make informed decisions, develop accurate forecasts, and help optimize processes. Proficiency in interpreting data helps drive a company toward strategic goals and improved financial performance.

Teamwork and Soft Skills

The role of a CFO goes well beyond crunching numbers and writing financial reports. Today’s top manufacturing executives require excellent interpersonal skills to collaborate with all departments and lead cross-functional teams.

A successful CFO works closely with product development, sales and marketing, and operational units to ensure financial stability and growth. Rather than perpetuating a reputation as the spoilsport that pulls the financial rug out from under promising projects and innovative ideas, CFOs must build and maintain strong relationships from the C-Suite to the front lines. Fostering a culture of teamwork that drives the company toward shared objectives is now an integral part of CFO responsibilities.

Unshakable Ethics

In an industry that’s always under scrutiny, a manufacturing CFO must adhere to the highest ethical standards. Companies with a reputation for impropriety suffer lost business opportunities, lawsuits, and a tarnished public image. A successful CFO embodies unshakable ethics, maintaining transparent financial practices and ensuring compliance with relevant regulations. This honest, ethical approach fosters trust within the company, reduces risk, and bolsters the business’s long-term reputation.

A executive search firm with deep experience in manufacturing can help your company find a successful CFO in manufacturing to fill this critical role. Candidates who have displayed support for innovation, expertise in data analytics, strong interpersonal and teamwork skills, and the highest ethical standards will populate the shortlist. These traits will help businesses endure hard times and flourish when conditions improve.

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CIOs can affect change in the C-suite through their deep understanding of technology and its impact on an organization as a whole. Learn more about how CIOs can use their skills and expertise to drive positive change within the C-suite.

What CIOs Do

A CIO’s primary responsibility is to manage a company’s technology infrastructure and services. This includes networking, hardware, software, cloud computing, storage, and security systems. CIOs also understand the broader technology landscape and how it can be leveraged to create competitive advantages. As such, they are well-positioned to drive innovation within the company and provide strategic guidance on technology-related matters.

Moreover, CIOs have an important role in managing the implementation of new technologies within the organization. They ensure any new or upgraded system meets user needs, adheres to security protocols, and demonstrates reliability under heavy use. CIOs control technology costs while simultaneously improving efficiency and user experience. Through their expertise, CIOs are able to leverage technology use to increase profitability. This is an invaluable asset to any organization looking to stay competitive in today’s fast-paced business environment.

Finally, CIOs can provide strategic insight into how technology solutions can address specific business objectives. They have a unique ability to spot opportunities in emerging technologies and identify potential risks. By leveraging their deep technical knowledge, CIOs can provide invaluable input into the development of new products and services that will give a company a competitive edge in the market. Here’s a deeper look at how CIOs can affect change in the C-suite.

Rebranding IT From a Cost Center to a Revenue Generator

The traditional view of IT departments is that they are a cost center, providing essential services but not generating any profits. CIOs can help shift this perception by demonstrating how technology solutions can generate revenue. By leveraging data analytics and promoting the adoption of organization-wide, efficient, user-friendly technical platforms, CIOs can affect the development of new products and services that have the potential to generate substantial profits for the company.

Identify New Opportunities and Develop Strategies

CIOs understand the wider technology landscape, which allows them to identify new opportunities and develop strategies on how to capitalize on them. By leveraging their expertise, CIOs can provide valuable guidance in areas such as emerging technologies and digital transformation initiatives. They can also help bridge the gap between business goals and technical capabilities, allowing the company to maximize the impact of its investment in technology.

Improve Operational Efficiency

CIOs help companies improve operational efficiency by leveraging new technologies and digital solutions. They develop solutions that help companies measure whether they are using resources cost-effectively, ultimately improving operational efficiency and ultimately increasing profits.

Expanding Risk Perception and Management

Technology comes with inherent risk. Companies must have a comprehensive approach to risk management. CIOs are well-positioned to provide strategic input on the development and implementation of risk mitigation strategies, ensuring all members of the C-suite consider risk from their operational perspective and in terms of the company as a whole. This is especially important prior to adopting new initiatives that are as yet untested. This helps minimize losses in the event of any unforeseen issues.

Redefining Leadership and Teams

CIOs can also help redefine leadership and teams within the organization. They have a unique understanding of how technology impacts people, processes, and systems. By redefining a team as the group of individuals needed to complete a project, regardless of what department they’re from or who they typically report to, CIOs can forge teams that tackle urgent projects with a comprehensive approach.

By leveraging this knowledge and developing new approaches to managing teams and projects, CIOs can ensure organizations are able to quickly adapt to changing circumstances. This helps companies stay competitive in today’s rapidly evolving business environment.

Transformational and Strategic Thinking About Technology Platforms

The C-suite is responsible for setting the overall direction of an organization. As such, CIOs have a responsibility to provide transformational and strategic thinking about technology platforms. They provide valuable input into new products and services that will give the company a competitive edge in the market.

Taking an organization-wide view of technology rather than a siloed IT department view allows CIOs to drive cultural change toward enterprise technology. These changes can improve and coordinate areas as seemingly disparate as customer experience, data storage, security, analytics, human resources, marketing, and more.

Inspiring a Sense of Urgency

CIOs have the unique ability to inspire a sense of urgency within their teams. By leveraging their technical expertise and knowledge of the wider technology landscape, they can ensure their company stays ahead of major advances in technology, such as the explosive growth of AI apps.

Driving Acceptance of a Hybrid Workplace

The COVID-19 pandemic has completely transformed the way we work. Companies are relying on technology more than ever to enable remote work and collaboration. As such, it is essential that CIOs take a proactive role in driving the acceptance of a hybrid workplace. CIOs can manage this transition by developing and implementing strategies that ensure the security, reliability, and cost-effectiveness of remote working solutions.

Finding the CIO Who Can Transform the C-Suite

In order for a CIO to maximize the potential of technology investments and drive change within the C-suite, it is essential that a CIO be a good fit with company culture. They must also have the skillset and experience that can transform operations quickly.

A professional executive search firm can help find the right individuals to fill these roles. Executive recruiters provide tailored services that ensure organizations find the most suitable candidate for their needs. A good executive search firm will not only identify potential candidates but also conduct detailed interviews and confidential reference checks to ensure the CIO will be a good fit for the organization and that they’ll last in the position.

By engaging a specialized technology executive search firm to hire a CIO, companies can ensure they find the right person to drive necessary change and development, advance company goals, drive improvements, and build new revenue streams. The right CIO can help drive transformational change within the C-suite, helping to ensure companies stay ahead of their competition.

Through their deep understanding of technology and its impact on an organization, CIOs are well-positioned to drive innovation, improve operational efficiency, provide strategic insights into new opportunities, and mitigate risks. CIOs can bridge the gap between business goals and technical capabilities. Ultimately, CIOs can be a major force for positive change within the C-suite.

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The Role of Luck in a Leader’s Success, Part 2

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1. Does the candidate’s leadership style align with company’s value systems?

Fit really means linking the value systems and leadership style of the executive candidate with those of the hiring company. In fact, “value systems linkage” is the best predictor of happiness, in all its dimensions, for any hire. Therefore, for a family-owned business, where hiring a non-family CEO can often feel like arranging a marriage, fit is particularly important.
Naturally, the starting point for the hiring process is understanding the Core Family Values that drive the business. Businesses that have survived across multiple generations have invested much thought in the development of family values. They are typically recorded somewhere, either in a corporate handbook, website, or other core material. If this is not the case, formalizing and recording corporate values is an important exercise to complete before starting a CEO or COO search. Since the family can never be separated from the business, these core values will drive decisions that otherwise would be hard for an outsider to understand.

2. Does the candidate possess the most important competencies for the position?

When a candidate clearly aligns with the family’s value system, it can be tempting to conclude that the candidate is automatically a great fit. However, it’s important to move the decision beyond “I like them.” This is why a position competency model, designed to measure the candidate’s specific skill set against the company’s business goals, is critical. The key is to build a competency model that helps separate and prioritize the must-haves from the nice-to-haves. Nobody will be a perfect match on every competency, but the best candidate will have successfully demonstrated the top three to five competencies in the recent past.

3. Will the candidate be a steward of the family’s success?

When I try to consolidate all of the aspects of fit for family businesses, the single word that comes to mind is “stewardship.” Good candidates understand and appreciate what the family has already built. The new CEO becomes a steward of that success, even when the mandate is to transform the company. Family members in the business, ownership or governance have their own self-images (both within the family and in the community or industry) so tightly connected to the business that outside leadership needs to account for it and factor it into the leadership process.
To be a successful steward for the company, the candidate must be a confident adult who is prepared to handle sensitive situations that will arise within family businesses. For example, a mature non-family CEO will be able to react appropriately when ownership wants to drill down into the details of the business, as they always do at some point. The mature steward will not be threatened by this, while an insecure autocrat will not react well.
Investor Relations (IR) also deserves some thought. Every CEO spends a significant amount of time caring for the company’s owners. In public or private equity owned companies, this is pretty clear. In a family-owned business IR involves multi-generational dynamics and strong emotions. It may involve dealing with a Family Council or helping educate a new generation to be successful future owners. So IR does not go away; it is just very different.
In summary, the “best fit” candidates will embrace the core family values and have the capacity and patience to deal with family dynamics without becoming embroiled in them. At the same time the non-family leader will have the right core competencies to lead the business to success, however it may be defined.

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Stop talking about earning a seat and start proving that you’ve already earned it

I was on the phone with an HR colleague one morning talking about the “state of the function” and bemoaning the current crop of Human Resources bench talent. After all, it is the primary job of HR to build the talent base of an organization—shouldn’t that include the HR function as well?

My colleague is a well-respected CHRO in the energy sector, and I recently left HR after a number of years as a CHRO to go into executive search. We were coming at the issue from different perspectives, but we had no trouble aligning on the key question: Why do HR people boast about “earning a seat at the (proverbial) table” when any other function head on the leadership team – CFO, COO, CMO, CIO, CDO and any other “C” titles that exist based on the company or industry – just comes in and sits down? Why does Human Resources have to earn a seat when other functions simply assume their seat is already reserved? And why do HR people talk with so much pride about earning a seat that should be rightfully theirs?

“If HR needs to fight to be at the table, I would suggest you are working at the wrong company.” (Bill Higley, SVP Human Resources – Retail)

Continue reading on HR.com. 

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• Seeing green in 2017: As companies make plans for next year, more than half (64 percent) of respondents say they’re on track to “grow and hire” next year – up from 52 percent in 2015. Less than a quarter (20 percent) expect their growth to stay the same.
  
  
• What’s the reason for the party this season? 50 percent of the respondents said that the purpose of the party was to boost employee morale – up from 47 percent last year. Another 30 percent said it was to celebrate a successful 2016.
  
  
• Why no celebration? Half of the respondents who reported that their companies are not having a holiday party this year say they have never had such a celebration. Only 27 percent of those not having parties say a holiday party just didn’t make it into the budget this year.
  
  
• About that Budget… An astounding 93 percent of respondents said that regardless of company revenue, their company’s holiday party would be the same as – or even better than – the previous year’s. That trend is holding strong: it was also at 92 percent last year and just one point lower in 2014. What might be most telling about the employers is that this 93 percent includes the 18 percent of respondents who said their company either had no growth or had some type of consolidation and yet they still planned to have a holiday party at least as good as last year’s.
  
  
• Who’s invited? Employees, of course! However, this year 30 percent of respondents say spouses, partners, dates, or other family members will be passing the eggnog.
  
  
• Deck the Break Room: Most respondents say their parties will be held in the evening (35 percent) and at a restaurant (40 percent), but a sizeable portion (30 percent) of this year’s parties will be held at the office. Of the 18 percent having multiple parties, the majority are doing so because the company is too large for a single party or because of a dispersed workforce.
  
  
• Bring on the Booze! Drinks will still be served at most (65 percent) of this year’s parties, but that’s the lowest percentage ever recorded. Thirty-five percent of party-goers will have to bring their own cheer this year.
  
  
• What election? It seems this year’s presidential election has already been forgotten – at least when it comes to celebrating the holidays. Ninety-eight percent of respondents said that campaigning and elections had absolutely no effect on their party-planning process or budget. In fact, the majority respondents said the uncertainty surrounding the elections had no effect on their company’s future whatsoever.
  
  
• ‘Tis the season to give back (but just a little bit): 2016 marks one of the lowest for companies officially giving back to charity during the holiday season since 2010, when the recession caused charitable giving to drop to 47 percent. This year, 67 percent of the companies surveyed will be volunteering or collecting donations this year, up slightly from 66 percent last year, but down sharply from 75 percent in 2014. Also on a downward spike is the number of employers giving their employees a holiday gift. This year only 32 percent of respondents said their companies planned on giving out holiday gifts to their staff this year, down sharply from 45 percent just last year.

So, are corporate holiday parties here to stay?
“It is absolutely looking like the holiday party is here for good,” said Winston. “Employers enjoy giving their employees something to look forward to every year and a holiday party can do that every time.”
The 2016 Battalia Winston nationwide survey was conducted among a cross-section of 200 companies.
Click on the images below for full-size, downloadable graphs.

About Battalia Winston:
Battalia Winston has been successfully meeting client needs in executive recruitment for 53 years and is currently ranked as one of the nation’s 20 largest retained executive search firms, as well as one of the world’s largest woman-owned search firms. Headquartered in New York City, the firm also has offices in New Jersey, Boston, Washington, D.C., and Chicago. Battalia Winston is an agile and uniquely flexible firm and their culture is focused on providing highly personalized, responsive client service.

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Creating an LTIP is not something that should be handled in-house. It takes a professional compensation consultant to translate the family’s value system and objectives into an appropriate LTIP architecture, and then to fit the program to the requirements of the finalist candidate. There is always a bit of negotiating that goes on, first within the board and family, then with the finalist candidate. The process usually requires several steps/iterations over a couple of months and needs to be memorialized by a lawyer. The whole process might cost $12-15,000.

Because the process can take some time, we strongly encourage clients to start developing the LTIP at the beginning of the CEO or COO search. It is too late to start the process once the final candidate has been identified. If there is an LTIP already in place, it may need to be refreshed to match the current marketplace. Again, this process should be started early, since even minor modifications can take a couple of months.

Start with the Premise that the Program Should Pay Out Only When Value is Created

The architecture of the LTIP should be based on sharing in the value that the CEO helps create. Frequently, the way to measure that value is EBIT or EBITDA, starting with a reference value before the new CEO joins, and allocating a percentage of the value created to a pool that is shared by the top three to five members of the management team. This incents the CEO and provides some tools to attract and retain top talent.

In some programs, a third party assesses the company’s value each year, providing an independent view of the payout, but this method has a yearly expense attached to it. One recent client simply assigned a percentage of the EBITDA growth over time to a pool.

Keep it Simple

Some of my clients have tried to incent behavior with overly complex metrics, to the point that one candidate likened the proposed LTIP to the tax code. He asked, “What are you really trying to get me to do?” The company did not have a good answer. Also, it was very hard for the candidate to assess what was achievable before he moved under the tent with access to all the needed information. Ultimately, the company decided to simply base the incentive on company value growth based on their formal company annual valuation program.

LTIP payouts should be made in a reasonable timeframe, balancing the needs of the candidate with the need to protect the company from a large cash flow demand. Remember, if the CEO makes a lot of money, the family has made even more!

Of course, the value of the LTIP should be subject to a vesting schedule of a reasonable timeframe, perhaps three to five years. I had one client that wanted the monies held within the company until the CEO turned 65. That was unacceptable to the 43-year-old finalist candidate. He proved he was the right candidate by saying, “I want to be able to take some of my (earned) money out on a regular vesting schedule, invest it and then lose it, just like everyone else.” He turned the company profitable within nine months and doubled the value of their minority ESOP within three years.

While a recruiter can provide a sense of whether a program is comparable with others in the market, it takes a compensation consultant who deals with private companies to “turn the dials” and match a program to a specific situation. Recruiters familiar with family-owned businesses are accustomed to collaborating in this way and working with various other consultancies supporting the family-owned business community.

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