Good Business is not a Strict CFOs Cup of Tea

Research Commissioned by Epicor reveals varied CFO personas and how corporate technology investments can be influenced by individual leadership style

How and why Chief Financial Officers advocate technology investments to support business operations can vary according to their own personal leadership style. That’s one of the key findings stemming from new global survey research released by Epicor Software.

Based on survey respondents’ answers to a series of questions about their own personal decision-making style, the study found CFOs fall into six distinctive groups of financial decision makers: Politicians (27%), Revolutionaries (19%), Carers (19%), Conductors (16%), Traditionalists (9%) and Visionaries (9%).

The study found that CFOs who were characterized as Revolutionaries were tied to companies that had the greatest profit growth (profit increases experienced by 72% of Revolutionaries vs. 64% sample average) whereas those CFOs characterized as Traditionalists were tied to companies that had the least profit growth (profit increases experienced by 56% of Traditionalists vs. 64% sample average).

Traditionalists — traditional, strict CFOs prefer to work within existing systems and prefer not to be influenced by reputation and personalities when making decisions — were the least likely of all the personas to acknowledge any need for change when it comes to technology systems.

Alternatively, Revolutionaries are happy to consider changing corporate culture and structures if the need arises and they like to set tough and challenging goals. They take a less structured approach and often work outside of formal systems and processes, taking risks where necessary. The survey reveals that they are more critical of the IT that supports finance than any other CFO personas — 48% of Revolutionaries say the IT support they get is inadequate – a sentiment shared by only 36% of their peers. This may be a sentiment stemming from their “maverick” style of improvising and sourcing data from other means outside of business systems.

“The time to update business systems is before the organization outgrows them and before they start to erode the operational and financial health of an organization,” said Malcolm Fox, vice president, product marketing for Epicor. “To this end, it’s not surprising Traditionalists — who were the least likely of all the CFO personas to acknowledge any need for change when it comes to technology systems — also tended to lead companies that were experiencing less profit growth than other CFOs in their peer group.”

Dr. Dimitrios Tsivrikos, Division of Psychology and Language Sciences, University College London commented on the research, “Psychological research [makes it possible] to link the leadership style of business leaders to business growth, profit and change. The preference for traditional CFOs to work within existing systems and disregard the need for change stems from a lack of flexibility and a high need to achieve, and [often] leads to a top-down decision-making process. This has implications for business change and innovation; new ideas that are suggested by employees are not likely to be taken on board and the business’s ability to change and adapt is reduced. CFOs need to take on new perspectives and be open to novel ways of doing things. This will allow them [and their businesses], to find optimal and creative solutions to problems, which will in turn foster innovation.”

Fox added, “The research also makes the case for flexible business systems that can accommodate varied working styles. Epicor has been very passionate about redefining the relationship people have with their Enterprise Resource Planning (ERP) systems and simplifying interactions — removing barriers to accessing information, minimizing steps in the flow, and leveraging new means of visualizing, interacting and consuming information to provide actionable insights to the whole organization.

Most importantly, the study provides important insights about decision making and the role of technology to support a wide range of leadership styles, once again reminding us of the need to design business systems for people — as opposed to ‘users,’” Fox said.