How CFOs can ensure the future viability of finance: CFOs are finding increased expectations for oversight and transparency, along with rising stakes to grow the business faster. As a result, they must build leadership depth and breadth in their staffs, tapping people with the capability of balancing these competing tensions.

• Author: Maurer, Roy
• Position: Chief financial officers

Carol, a senior vice president running a large division for a global information services company, abruptly lost her CFO of 18 years to another company. Carol was shocked by his sudden departure.

Internally, her division was growing at a 27 percent clip, and was in the midst of a significant reorganization that would provide it with increased confidence that it could generate sustainable growth. Externally, customers were concerned with product pricing and how they would be impacted; the CFO had been the visionary and a significant, trusted relationship connection to Carol's customers.

The immediate problem she faced: There were no strong internal finance candidates with the leadership capability to replace him. Carol was forced to look outside, and, with the help of an external search firm, found a replacement--but not for six months. She managed to keep the wheels on the bus, mitigating risk damage with junior members of the finance team along the way. Nevertheless, the opportunity cost was high, and in retrospect, she calculated that the finance integration and the growth predicted by the reorganization were delayed for about a year.

Why was this otherwise successful company unprepared for such a critical vacancy? Insufficient focus by senior management resulted in failure to develop succession or talent management as a core business process.

There are some hard messages in this for CFOs: Of all the other tensions of the job and responsibilities you must balance, add these to your list--and not at the bottom:

1. There are financial risks to leadership vacancies. The cost of poor talent management may not show up as a line item in the expense column, but it does impact performance and it spreads systemically through the organization.

2. Best practice companies get this right and are using talent management as a competitive advantage. All the demographic data indicates that talent competition is about to heat up in the U.S. If your company is operating from deficiency gaps, things are about to get worse, not better.

3. Talent management is a responsibility that must be owned by the CFO and not delegated. One of the most significant barriers is the failure of senior leaders to be personally involved and deeply committed. As it is in so many other ways, the CFO role is pivotal to the success of a company here, too.

   The current business literature is filled with compelling arguments supporting the need to actively manage talent succession for future viability, and research shows that most CFOs and senior C-level executives agree. Yet, there is a significant gap between belief and action, as measured by the number of companies who have actually implemented talent programs. Two critical factors can bridge the gap. One is a fundamental mind...