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How to become a successful CFO in Japan: Skills and qualification

How to become a successful CFO in Japan: Skills and qualification

2 months ago by Sayuni Jah Tee Hettiarachchi
1669682568743

​Our clients often ask which skills a CFO should be evaluated on and how the role of the CFO in Japan has evolved over the years.

Traditionally a CFO’s responsibilities are managing financial operations and acting as a steward of the company’s finances. However, the role of a Chief Financial Officer (CFO) is constantly evolving through digital transformation, the cross functional nature of the role and being proactive in influencing the company’s future. Here are some fundamental skills any finance leader should master to be successful in leading a business's future.

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Accounting Skills

It is important to understand the fundamentals of accounting. You do not necessarily need to be an expert in accounting or even prior experience as an accountant because if you are a CFO or any leader in a finance team, you will have a team assisting you. However, it is crucial that as a finance leader, you are proficient in reading and understanding financial documents such as balance sheets, income statements and cash flow statements. You have to know about fundamental accounting principles and laws and regulations.

Analytical Skills

Senior finance professionals need to be proficient in analyzing and leveraging information from financial statements. This means reviewing and interpreting the numbers presented in financial statements to understand the company’s performance and to make sound decisions moving forward. Data analytics allows CFOs to be even more agile and leveraging them can help to increase profitability.  CFOs need to master advanced data analytics, be curious and constantly learn how to be more efficient.

Financial Reporting Skills

To be good at financial reporting, one should be proficient in verbal communication in meetings and written communication in financial documents. Being precise and concrete using specific financial jargon to present the financial activities and performance including comparisons of actuals to the budget and ratios can build a strong rapport with executives. 

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While financial skills are critical for a CFO, soft skills are equally important to successfully lead a team. Recently, I conducted a poll on the most important soft skills needed to become a successful finance leader and the results were as follows:

Decision Making - 33%       

Influencing - 13%

Leadership - 19%

Business Partnering - 35%

Decision Making Skills

Problem solving and decision making are essential in becoming a successful CFO. A financial leader should have the ability to tackle any complex problems as and when they arise. Having a broader view of business, combining both live and historical data help to drive the business to sustainability and profitability.

Nowadays, with a competitive digital landscape decision making has significantly changed. CFOs are using real-time data to make the best possible decisions, spending more time on insights and analysis and strategizing as opposed to spending most time generating reports. Decision making has evolved over the years, real time data provides a clearer framework, agility and accurate decision making as opposed to intuitions. 

Influencing Skills

Recently, I interviewed a Japanese finance director at a global manufacturing company and asked why he thought influencing skills are important for a finance leader. From his experiences, if you are working in a foreign company it means having to work with  many different global stakeholders, either regional directors or CFOs. When budgeting and strategizing for the next financial year, headquarters may set targets that are too challenging or even unrealistic to achieve.  Hence, a CFO or even a finance director should have the ability to influence their decisions, make them understand the respective market and the potential of the company. Be assertive and persuasive. 

Leadership Skills

A good CFO cannot only be a “numbers guy”, he should be able to bring a team together, make sure everyone is supported and empowered and lead them to success. Build trust and create a safe space for members to practice and refine their discipline to develop a well functioning team. Acknowledging their contributions and achievements, empathizing with them and inspiring people with a sense of purpose are keys to great leadership.

Alternatively, CFOs should also be strategic in their leadership, and be proactive in creating and executing plans. To truly inspire a team requires a great vision. This involves assisting the CEO and other board members with key decision making. 

Business Partnering Skills

Business partnering is becoming a hot topic these days.  A successful CFO must excel at forming and maintaining business partnership across functions and the organization. A CFO’s sole focus is no longer only financial data such as net revenue, accounts payable, accounts receivable or working capital but has expanded to non-financial data including talent management and brand perception. The role is evolving to be more collaborative across functions such as sales, marketing , human resources and customer service. As a business partner, decision making is not based on one aspect of the business, “finance” but all aspects of the business, understanding what other teams are doing and collaborating to deliver results. 

In addition, while mastering the above skills it is also highly recommended that you get a qualification. Whether it is CPA, CMA, ACCA or any other relevant qualifications, studying for them would ensure you know the fundamentals of  accounting. They are also vital when applying for jobs: one Japanese finance leader mentioned that when he interviews someone with a recognized qualification, he would not ask any technical questions because passing those qualifications would mean they have the knowledge of  accounting policies, GAAP, internal control and so on. 

So what do you think? Do you think you have the skills and qualifications to become a successful CFO? Which skill do you want to improve the most?