What makes a great CFOFinance leaders must have courage, good character, and sound judgement, according to the former chairman of Microsoft India.
One of the most important things a finance professional needs to know is what the company's senior leadership expects from them. In this Q&A, we posed questions on this subject to Ravi Venkatesan, a well-known business leader in India and a UNICEF special representative for young people and innovation. He had been chairman of Cummins India, Microsoft India, and Bank of Baroda, one of India's largest public lenders, and co-chairman of Infosys. He started his career as a junior engineer making engine parts on the factory floor of Cummins Inc. in Indiana in the US. In just ten years, he was made chief of Cummins's India office. Below, he shares lessons on leadership and what he learned working alongside accountants, controllers, and CFOs. Here's an edited transcript of the conversation.
Finance professionals today must go beyond the spreadsheets and be a partner in the business. What are the great finance people you've worked with like?
Venkatesan: Accountants and controllers have a hugely important role in terms of the integrity of the numbers, financial reporting, budgets, and controls. But, for CEOs, what's expected from the CFO was much more.
Those technical skills are a given. What I've appreciated is working with a person who actually understands the business you're in. It's about connecting to the business, the people, the customers, and therefore has the context to interpret the numbers. Many professionals remain just glued to the numbers and the spreadsheets. That's an incredibly narrow view of things. It's not helpful at all. As you become more senior, you have to become steeped in the business and more solution-oriented, not problem-oriented.
What do you mean by being solution- oriented?
Venkatesan: For instance, there's an issue and the person says, "You can't do that." That's not helpful. As a leader, you need to find me a solution to this problem. You need to be solution-oriented not rule- or compliance-oriented. And this is true not just in finance — it's true in HR and in the legal profession.
As you become more senior, it's not just about you. A lot of people are very technical, and they're very good at their work. But if you become a CFO, you're expected to build and strengthen the whole function and not just be a star individually.
When does a CFO's individual character come in?
Venkatesan: You see many CFOs and CEOs getting in trouble because of ethical issues. Good judgement really matters. You want a CFO who can keep you honest, who has good character, judgement, and the courage to say things as they are. They are the custodians. Shareholders, the board, and the whole institution depend on their good judgement.
Some finance leaders say it's not easy to get an end-to-end view of a business. How can it be done?
Venkatesan: That's nonsense. Nothing prevents you from getting into the business. In my entire career, I've always seen the business leaders loving it when a functional leader wants to spend more time with them understanding what they do. You don't look for an invitation on a red carpet. You clear a few days to go in the field where the action is.
Another way to develop an end-to-end view is to actually go run a business. Get out of the function to where you can do general management. Learn what it's like to run a piece of the business. It becomes harder as you become more senior, so you should branch out early. If you're 32 years old, an accountant or a finance professional, the most urgent advice I have is to get out of the function.
Isn't that risky?
Venkatesan: It is risky. You could fail. But the risk of you staying narrow is even greater. You have to weigh it against the risk of not doing it. Eventually, software is going to do most of what you're doing. There's a far greater risk if you're just staying in the pipe.
Should we fear computers replacing humans? You've also talked about "timeless skills" before. What are they?
Venkatesan: I keep getting people saying, "Should I take this course in machine learning? Should I take that and become a data scientist?" If you're really interested in it, of course you should.
But today it's this, tomorrow it's something else. What really matters is what is called learning agility — the ability to learn new things. That is the fundamental skill you have to master — learning how to learn. No matter what technology comes, how the industry changes, you'll be fine if you have the ability to learn new things. That's the timeless skill.
Another timeless skill is the ability to manage yourself. Fairly soon in life, the biggest enemy and obstacle to success is you. The guy and gal in the mirror. Work on yourself. We keep upgrading our phones and appliances. How about upgrading your own software?
You were made chairman of Cummins India, the diesel engine manufacturer, at 35. That's a remarkable feat for anyone that age. How did it happen?
Venkatesan: What I tell people is luck matters a lot. There are a lot of people who are reasonably smart. I worked really hard — much harder than my peers and colleagues who were as smart or much smarter. And that's all we can do. But having the right opportunities — the right mentors who look after you and open the right doors — are all incredibly important. They may be as important as working hard and making the right decisions.
Surely, you made some right decisions. You said you realised that you were an OK engineer but you loved management. What's leadership to you?
Venkatesan: I was a competent engineer, but I wasn't the best at it. I found that I was best at engaging people and getting them to do amazing things. So, I went off to Harvard Business School. That put me on a different trajectory.
Leadership is getting a bunch of people, who don't have to listen to you, to go attempt something significant — solving a problem or going after an opportunity. Now why should they follow you? The single most important reason is because you care intensely about them, you're passionate about the issue, and your passion is contagious.
Secondly, if you look at all the people who have done amazing things, they are usually what is called a "force of nature". They're so wilful, so intense, so committed that they blow through all obstacles that would normally stop another person. Your tenacity — not giving up the first time you fail or slip — is really important.
Alexis See Tho is an FM magazine associate editor. To comment on this article or to suggest an idea for another article, contact her at Alexis.SeeTho@aicpa-cima.com.