What projects will you—or should you—sponsor?
In this issue of CFO Insights, we discuss the importance of sponsorship and outline ways CFOs can use it to make an impact.
Incoming CFOs, in their roles as company leaders, not only need to frame how they will oversee their function and team, but also need to give careful thought to what they will likely sponsor—and what they will not.
Unlike direct leadership of a function, project, or initiative, sponsorship is more subtle and indirect. It often takes the form of shaping the context where others lead and drive an initiative to success. For example, sponsorship could include the provision of tangible resources—such as providing capital, people, customer connections, or subject matter resources—to make a project more successful.
Sponsorship could also be more symbolic and less tangible. It could be the provision of specific job and project opportunities for high-potential individuals so that they can learn and extend their skills from new experiences. It could be about bringing the prestige of your office or your personal commitment to recognize and give visibility to a project or an individual. It could even be giving room for and tolerating the failure of a high-risk project because the team dared to try to engage the unknown or do something truly difficult to accomplish.
Whatever form it takes, sponsorship can be an important activity for CFOs. It can catalyze new behaviors you wish to manifest in your company. It can also be an amplifier of the changes you wish to bring about by having others lead change initiatives aligned to your objectives. While few executives systematically think about how to use sponsorship as a means to catalyze change, in this issue of CFO Insights, we'll discuss the importance of sponsorship and outline ways CFOs can use it to make an impact.
The four sponsorships of leaders
In our CFO Transition Labs, there are four specific sponsorships that typically emerge for incoming leaders to consider. These are: innovation, collaboration, leadership development, and brand. Each of these ties to the four faces of the CFO as strategist, catalyst, steward, and operator.1 The four sponsorships, which lie at the intersections of the four faces of CFO leadership, are discussed below:
- Innovation: Innovation brings to life something new that enables a company to go from the present to a new and different future. There can be many types of innovation that create many different futures. Doblin, a part of Deloitte, offers a useful typology of 10 innovations ranging from the profit model a company chooses, to its product features, to the experience realized by the customer (see https://www.doblin.com/ten–types for the Doblin model).
When sponsoring innovation, it is important to choose a locus of innovation that is aligned with the strategy and objectives of the company. For example, if the focus of the company strategy is to improve productivity, process, and supply chain, network innovations are more likely to deliver the desired results. If the strategic focus is on improving market share, then channel and customer experience innovations may be more aligned to the strategy.
- Collaboration: Sponsoring collaboration and connection within or across organizations can enable critical access to ideas and other resources that help companies innovate or improve the execution of initiatives. For example, many interesting business opportunities now lie outside the boundaries of traditional functions or firms and at the intersection of different fields.
In health care, many CEOs that find drugs, diagnostics, devices, and nutrition are converging in care solutions for critical illnesses.2 In academia, provosts and deans often find the need to encourage collaboration across different colleges and departments to meet changing demands for new knowledge and research. For example, the emergence of e-commerce required marketing and information technology to collaborate for more data-driven insights. As a C-suite leader, sponsoring collaboration across organization silos may not only enable innovation, but also reduce inefficiencies in the organization resulting from disparate systems and processes.
- Leadership: A key responsibility of CFOs and other C-suite leaders is to develop the next generation of leaders through sponsorship. Sponsors can create opportunities and advocate for their high-potential staff to undertake assignments that develop leadership skills. As a considerable part of leadership is confronting and engaging the unknown, this may include assignments in areas that staff members may not have engaged with, such as leading a mergers and acquisitions deal or integration or negotiating for and launching a new international joint venture.
As we found in our 2009 study of women CFOs at leading companies, sponsorship is far more important than mentorship.3 While mentors can counsel an individual, sponsors can deliver opportunities that accelerate individual careers. One way for CFOs and other C-suite members to sponsor leadership opportunities is to create chief of staff roles into which high-potential individuals rotate for a year or two.
In such roles, the professional may directly assist the CFO, or the CFO can give the individual broad exposure to the kind of complex problems, decision-making, and key stakeholders he or she would likely work with in the future. Other sponsorship models may include selecting individuals for stretch assignments within the company.
- Brand and values: A fourth area that CFOs and other C-suite leaders can sponsor is the brand and values of their organization communicated to external and internal stakeholders. Brand and values are expressed by the offerings and conduct of the organization and its staff vis-à-vis its key stakeholders. They can be manifested in one's own meetings and personal conduct with stakeholders, such as customers, the community, employees, and prospective employees. Alternatively, they can be expressed via giving, volunteering, and other programs you enable for others in your organization to participate in that embody the best of your organization.
You can also provide visibility to those who represent the behaviors and beliefs that embody your brand and values by recognizing them. The sponsorship of brand and values serves to enhance the reputation and social capital of the organization with its key stakeholders. It can also help propagate the cultural attributes of the organization to new generations of employees.
Making sponsorship work
Many CFOs in our Transition Labs do not have an explicit sponsorship strategy. The ones who stand out as sponsors commit to focus, plan for commitments, and communicate as a means of increasing returns from their sponsorship investments:
- Focus: Managing time and attention are often the greatest constraints for leaders. Given the demands of C-suite roles, many executives can commit only between 5 and 10 percent of their workweek to sponsorship. For a 60-hour target workweek, this ranges between three and six hours a week. Thus, for your sponsorship to translate into meaningful outcomes, it should be focused on a few key choices. Perhaps, of the four key sponsorships, you could choose to focus initially on one or two of them—such as innovation and leadership.
It is important to be clear and tangible about the results you expect from each sponsorship. For example, on innovation, some leaders may say they want to hear the "best innovative ideas" and run a suggestion box in their company as an attempt to demonstrate sponsorship of innovation. This may have some use in surfacing an opportunity, but is generally meaningless unless substantive resources or commitments are then made to turn a specific idea into a reality.
Effective sponsorship is choosing to focus on and enabling specific initiatives with tangible objectives and results. As the old adage goes, people judge you by what they see you do versus what you say. Broad statements about innovation, collaboration, leadership, or brand without substantive and tangible commitment and actions do not demonstrate leadership as a sponsor.
- Plan for commitments: Beyond focus, it is important to make commitments to what you sponsor to enable it to be successful. The first and most important commitment is the choice of the initiative and, especially, its leader. Does the leader have a track record of delivering other projects in the space? Does the leader have the qualities that are likely to make him or her and your sponsorship successful? Choose weak candidates as leaders and you are likely to lose your own credibility.
Second, establish a plan to resource commitments for your sponsorship. If you are going to sponsor leadership by having a chief of staff role, get the headcount for that role by acquiring new headcount permissions or restructuring your organization to free up headcount. Also, work with human resources to find high-potential candidates and think through the experience you will offer that candidate to make the program successful.
If you are going to sponsor collaboration across organization silos, consider what commitments you will make to restructure goals and incentives that enable collaboration. Thinking through your sponsorship and making commitments to set context can enhance the likelihood of successful sponsorship.
Third, once a leader is selected for an initiative and a forward-looking context is shaped, it can be useful to work with the leader to frame how you can support him or her through different stages of the initiative and establish mutual expectations of each other. Tangible plans and commitments enhance the likelihood of sponsorship success.
- Communicate: Your sponsorship activities ideally complement and amplify the impact of your other priority initiatives. To amplify the impact, it is critical to communicate your efforts across the organization. This requires integrating your sponsorship activities with your overall communication plan. Sometimes you will drive the communications by making who and what you sponsor visible.
- At other times, it is those whom you sponsor who communicate their programs and your sponsorship systemically at different levels of the organization. A strong communications strategy can complement your sponsorship strategy.
- Is sponsorship for you?: Sponsorship is an essential responsibility of C-suite leaders. Yet, many first-time CFOs often do not have a clear plan for sponsorship undertakings. Focusing on selecting what to sponsor from the four types of sponsorship—innovation, collaboration, leadership, and brand—and aligning those choices to your priority initiatives can help you amplify your impact across your organization. Successful sponsorship often requires focus, planning, tangible commitments, and a communications strategy to drive impact.