By Scott Robbin
In today's ever-changing business environment, the partnership with finance has become even more critical. Xia Liu, Vice President of Finance at Southern Company, highlights how finance must work hand in hand with all the other departments in helping shape the company's strategies.
[Scott Robbin] With the change to a larger role in shaping company strategy, how important is it for finance leaders to work hand in hand with all departments in an organization?
[Xia Liu] Finance has been and should always be an integral partner in working with other internal organizations in shaping a company's strategies. The partnership is specifically defined by three aspects:
1) Financial leadership. Finance provides overall leadership in setting the financial policies and beliefs for different organizations to use in considering strategic options in serving customers. For instance, Southern Company treats financial integrity as a top priority in our customer-focused business model. Our investment policy considers whether a potential opportunity would strengthen or weaken our company’s financial integrity. We also believe that value is a function of risk and return, and our strategy is consistent with the goal of creating value for our customers and shareholders.
2) Business enabling partnership. Finance often has to play the role of "saying no" to maintain financial discipline. However, business is ultimately grown by creating opportunities leading to greater risk-adjusted value. As a trusted partner in achieving this goal, finance should enable positive strategic direction while maintaining the necessary discipline.
3) Gatekeeper. Finance provides an independent viewpoint on behalf of the company's board of directors and serves as a gatekeeper for shareholders.
"As a trusted partner in achieving this goal, finance should enable positive strategic direction while maintaining the necessary discipline.”
What does the modern day finance leader look like, and what skills must they possess? How has your personal role and skill set matured with this evolution? What do you see as future of the finance leaders?
Finance leaders must have a powerful tool set in their toolbox. The modern-day finance leader should possess exceptional leadership qualities including strategic thinking, analytical, communication and interpersonal skills, as well as financial integrity and discipline. The ability to effectively tell the company's story to investors and other stakeholders is a "must-have" skill for a finance leader.
Because finance is playing a larger role in strategic developments, a finance leader must extend his or her understanding to other aspects of the business, such as operations, customer service and regulatory affairs. A finance leader should not just sit in the office crunching numbers. This is particularly true today, as demand for information and collaborations is much greater than in the past. An ideal leader should have spent quality time in other functional areas to develop a deep technical understanding of the diverse fundamentals across all the aspects of the business. Cross-functional training has become extremely important in helping shape a finance leader's business judgment and the ability to work as a trusted strategic partner.
"The ability to effectively tell the company's story to investors and other stakeholders is a "must-have" skill for a finance leader.”
At Southern Company, we pride ourselves on developing future leaders. Like many others, I have benefited from the company’s developmental opportunities. I have spent time in different areas in finance, such as planning, treasury and analysis, and have also worked in operations, regulatory organizations and other business units. My background is helping me do my job today as Southern Company’s VP of finance.
Due to their diverse skill sets, financial leaders often become candidates for other strategic roles. In fact, many CEOs have risen through the finance ranks.
A deep financial background benefits leaders across the company, as experience in finance enhances work quality and opens the door to new opportunities. An expanded career path driven by unique skills is the future of the finance leader.
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Xia Liu is vice president of finance and assistant treasurer for Southern Company. Southern Company, ranking 147 on the latest Fortune 500 listing, is one of the nation’s largest electric utilities with a market capitalization of close to $40 billion and total assets of close to $60 billion.
In her current role, Liu leads and integrates a broad range of functions including strategic finance, merger and acquisitions, project and corporate investment, treasury, capital market and cash management. She serves as a strategic partner with a focus of strategic alignment and financial discipline in investment decisions. Overseeing banking, investment advising and rating agency relations, Liu plays a critical role in maintaining Southern Company’s premier credibility with Wall Street and ratings agencies.
Through her 15 years experience at Southern Company, Liu has served in various positions in finance, treasury, operations and regulatory areas including testifying experience with the state public service commission, leading the strategic planning task force for the multibillion dollar fuels program, serving as assistant treasurer and director of financial and corporate planning for Alabama Power Company, and working with the Southern Company CFO on all key strategic and financial issues.
Liu holds a bachelor’s and master’s degree in finance from Renmin University of China, and a master’s of business administration from Emory University. A Chartered Financial Analyst (CFA), Liu has completed two years in the economics Ph.D. program at Emory University. She is a fellow of the prestigious International Women’s Forum Leadership Foundation program and participated in the executive programs at Harvard University and INSEAD School of France.
Passionate about her community, Liu served on the board of directors for the Exceptional Foundation and for the Women’s Fund. In 2008, she graduated from the YWCA Momentum program designed for leaders in the Birmingham area. In 2011, she was recognized for YWCA Greater Atlanta’s Women of Achievement award. In 2012 she graduated from the Leadership Atlanta program.