Whether you are a new or veteran CFO, having the right team in place is essential to your success. Deloitte’s research and insights from its CFO Transition Lab™ sessions suggest that among the fundamental resources (that is, time, talent, and relationships) executives must manage during a transition, securing high-performing talent may be the most critical to achieving a CFO’s priorities – and one fraught with minefields.
Still, when we asked CFOs in the Q2 2014 CFO Signals™ survey for their top insights on building a strong finance function, they resoundingly said retaining top performers is worth the effort. They also said that recruiting talent that is not only top-notch, but also fits the long-term needs and culture of the organization, is vital. Moreover, they encourage hiring not simply for technical skills, but also for mind-set, breadth, and partnering ability.
Who would you take with you if you left tomorrow? Asking and answering this question is a good way of identifying high potential team members and stars
It is obviously a tall order. But while there are no simple answers to decisions pertaining to people, knowing fleeting trade-offs and how to effectively gauge skills may help you better navigate these decisions. In this article, we’ll discuss ways to review your current staff and strategies for shaping the team you need to achieve the priorities you’ve set.
Right people, right seats
Getting the “right people in the right seats” is a goal we often hear from seasoned executives during their transitions. Having the wrong people in certain positions can cost you valuable time – often your most precious resource – as you have to review and repair work.
Those wrong people can also cost you credibility, if you are viewed as carrying and not attending to non-performers in a timely way.
Accomplishing this goal begins with gauging the capabilities of direct reports and other critical staff and deciding whether to improve individual capabilities or recruit new talent.
A starting point is to peruse performance reviews, although they are often not sufficiently informative, or to quiz a previous leader, if he or she remains with the organization. But, typically, you have to make your own observations.
Seven questions to ask
Aside from gut impressions, the following seven questions can help provide you with a quick snapshot of your key staff members and their capabilities:
One: How confident are you in each of your direct reports and the key staff below them?
You want to have confidence in your staff in three areas: competence, judgment in critical situations, and execution abilities. To gauge competence, it is useful to frame the Occam’s razor question for each functional area. For example, CFOs may ask their tax directors what they would do differently if there were no taxes, and why.
A good question can provide insight into competence. Good observations probably lend more insight into the behaviors and judgment of your staff in a business and social context. Thus, 360° evaluations of staff can provide insight into the observations of others regarding the competence and judgment of your staff.
Two: Who gives you and your team positive energy, and who sucks energy from you? Those who drain your energy are probably energy vampires in the broader organization. You generally want to build a team around those who give positive energy overall.
Three: Who would you take with you if you left tomorrow? Asking who you would take with you is a good way of identifying high potential team members and stars. They are likely to be your “keepers.”
Four: Who is a good brand ambassador to other organizations for you? In most functions, you need people who are technically competent and able to represent the brand you want to create. Good brand ambassadors can partner with clients and help enhance the reputation of your organization.
Five: Who is or is not a team player? Typically, you want team players in your organization. You will have to decide your strategy with those who choose not to team.
One trap you do not want to fall into is the “rescue fantasy.” Rescue efforts do not always succeed. Carefully determine the likelihood of success and the trade-offs of individual rescue efforts versus recruiting staff with the requisite skills and temperament
Six: Who is a flight or retirement risk? You need to identify flight and retirement risks and establish retention or succession plans to mitigate them.
Seven: Who is technically competent but managerially incapable? Another challenge is a direct report who is technically very good but a poor manager. This can manifest itself in poor delegation skills, bottlenecking of work, turnover on a team, or poor hiring choices.
Taking action on talent
While there are other important questions, these seven can help identify where you need to improve talent. Generally, you have three options:
- Replace problematic team members
- Reassign staff
- Remediate performance gaps through training or coaching
Ideally, you will want to have high confidence in all your direct reports. For reports you are unsure about, you may want to assign them key tasks to test their competence or judgment to determine your confidence in them.
For those reports you do not have confidence in, you will likely want to replace or reassign them.
One trap you do not want to fall into is the “rescue fantasy.” In our lab sessions, we find two common variations. The first is when you have a very congenial and well-liked individual who is not performing at the required level.
Conversely, you may have a talented individual who is good at his or her specialty or execution of projects, but does so in a manner inconsistent with the culture, teaming, and other norms you wish to establish.
As rescue efforts do not always succeed and can be costly in terms of time and effort, you have to carefully determine the likelihood of success and the trade-offs of individual rescue efforts versus recruiting staff with the requisite skills and temperament to succeed in these roles.
Rescue efforts with direct reports should generally maintain an established timeline that helps resolutions occur in the first year. You also have to consider the opportunity cost of your time in a failed rescue.
However, using third-party resources such as external coaches, training programs, or internal and external networks to help individuals develop the skills they lack can give you leverage in these efforts.
Finally, replacing or reassigning staff or remediating performance will require partnership with human resources (HR) across multiple dimensions.
Depending on existing performance management systems, replacing staff can take time to build the case for dismissal. Furthermore, existing compensation systems may need to be renegotiated to recruit critical talent.
Reassigning staff to roles for which they are best suited and providing coaching and training programs to staff are also likely to require HR support. Thus, it is important to get HR on board as quickly as possible to assist with your talent agenda.
Act quickly, with no regrets
When we ask executives about their single biggest regret after their first year of transition, we often hear they did not move quickly enough on talent performance issues. Getting the right people in the right seats as quickly as possible is likely to free up your time to attend to the truly important issues.
About the Author
This Deloitte CFO Insights article was developed with the guidance of Dr. Ajit Kambil, Global Research Director, CFO Program, Deloitte LLP and Lori Calabro, Senior Manager, CFO Education & Events, Deloitte LLP. For more information about Deloitte’s CFO Program, visit www.deloitte.com/us/cfocenter.
Copyright © 2014 Deloitte Development LLC. All rights reserved.
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