A Google search for “differences between U.S. and Chinese culture” returns more than a billion results. Included among the results are scholarly research on social structure, books on family dynamics, and newspaper articles and blog posts on business etiquette. According to new research from Korn Ferry, another topic could be added to the list: the skills and traits needed for a successful chief financial officer.
What does culture have to do with being a successful CFO? The scope of the job, after all, is pretty straightforward—understand accounting and financial regulations, be adept at financial planning, and make capital allocation decisions to drive revenue and profit. At least that used to be the case. In recent years, however, the CFO role has evolved from being purely numbers focused. More and more, CFOs are being asked to serve as a key business partner to the CEO and a strategic advisor to the board and organization as a whole. These new requirements change the collaboration between the CFO and other parts of the organization and affect the way financial information is prepared and presented.
As a result, as CFOs fill more gaps in an organization’s operations and leadership they need a wider skill set and understanding beyond finance. And that’s where cultural differences come into play, says May Chen, the director of assessment services with Korn Ferry APAC. She analyzed the traits (i.e., individual characteristics) and drivers (i.e., sources of motivation) of top-performing Chinese and North American CFOs who completed Korn Ferry leadership assessments, and found that cultural values around interpersonal communications, as well as social norms, affect performance as much as financial acumen does.
Structure, for instance, ranked as the most important driver, or source of motivation, for Chinese CFOs, but the least important for CFOs in the U.S. Part of the reason for that, says Chen, stems from the fact that Chinese culture emphasizes structure, particularly with regard to business, where there are very precise terms that indicate a person’s status and their relationship to everyone else.
But to the extent that structure relates to a desire for reliability, predictability, and clear processes and procedures in the work environment, the need for structure could affect a CFO’s performance in today’s volatile and uncertain business climate. Such findings suggest that organizations may need to adjust their criteria for attracting and retaining CFO talent. Or as Chen says: “The CFO role is now much more visible, with a higher level of power and status. What it takes to succeed as a CFO may be very different depending on where the role is located.”