CFOs of large North American companies are most likely to see themselves as driving the business, according to a new study from Deloitte. The Deloitte CFO Signals quarterly survey for Q4 2010 indicates that given four choices for characterizing their dominant style, half of CFOs consider themselves predominantly “drivers,” with “guardians” second-most prevalent at 30%, and the remaining 20% evenly split between “pioneers” and “integrators.”
CFOs Broadly Characterize CEOs
CFOs characterize their CEOs more broadly. They classify one-third as drivers and another third as pioneers (note that pioneers are the least common CFO style). Guardians constitute 22%, and only one in nine CEOs is considered an integrator. Deloitte analysis indicates that driver CEOs are prevalent in all industries but are less common in technology, telecom/media/entertainment (TME) and services (where pioneers tend to have a higher presence). Guardian CEOs dominate in healthcare/pharma.
Pioneer/Driver Most Common Pairing
When it comes to CEO/CFO pairings, pioneer/driver pairings (expected to be the most common) are 20% more common than expected, and driver/guardian pairings (also expected to be prevalent) are 25% more likely than expected. In contrast, driver/driver pairings (expected to be highly prevalent) are only 70% of what is expected.
Almost 9 in 10 CFOs Report Good CEO Relationship
With respect to the quality of CEO/CFO relationships, only 13% of CFOs report either “mixed” or “fair” -the rest report “good.” Pioneer CFOs are slightly less likely to report a good relationship. Roughly 60% of CFOs report moderate adaptation of their working style to more successfully work with their CEO, and the remaining 40% are evenly split between high adaptation and no adaptation.
Managerial Decisions Drive Top Financial Challenges
For the third quarter in a row, finance organizations’ top challenges revolved around managerial decision-making in Q4 2010. Facilitating and influencing decisions related to strategy and operational priorities is the dominant challenge. Leading indirectly through provision of information, analysis, and metrics repeated as the number two concern.
Supporting a major change initiative came in a distant third during Q4 2010, driven by significant applicability within almost all sectors. Forecasting and reporting business results tied for third, consistently applicable to more than 25% of companies on the whole, and identified by Deloitte analysis as highly applicable for companies in the manufacturing and retail/wholesale sectors. Ensuring that investments achieve desired business results was fifth, driven primarily by healthcare/pharma. Allocating financial resources to maximize ROI was sixth, driven by relatively consistent applicability across industries.
In addition, Deloitte analysis indicates forecasting business results appears to be a bigger challenge for companies above $5B in annual revenues than for those below; managing finance organization costs is a considerably larger challenge for companies above $10B (a challenge for nearly one-third of these companies, or two to four times the level of the others); ensuring compliance with financial reporting and control requirements is a bigger challenge for companies below $5B than for those above.
North American CFOs Remain Optimistic
CFOs of large North American companies were more likely to be optimistic than pessimistic in Q4 2010, although job stresses have reduced CFO optimism since Q2 2010, according to other study results. The Deloitte CFO Signals quarterly survey for Q4 2010 indicates that overall, 53% of surveyed CFOs at North America’s largest companies are more optimistic than they were in the previous quarter.
About the Data: Ninety-two CFOs responded to the survey during the two weeks ended November 30, 2010.