Think you know what a CFO does? Think again
Once upon a time, the Chief Financial Officer role was pretty clear-cut. In charge of the financial health of a company or an organization, their remit was clearly defined by money coming in and money going out.
How things have changed. Tech-savvy, forward-thinking and creative CFOs these days need to be much more than data analysts and number crunchers.
As the competitive global economy forces companies to constantly innovate and stay agile, the CFO, like many c-suite roles, has evolved and broadened considerably.
The position is more demanding than in the past, but also more rewarding because the CFO is now steeped in many aspects of the business.
This, of course, means a heavier workload. A recent McKinsey Global Survey reported that the number of “functions” reporting to CFOs had increased from 4.5 to 6.2 over the past two years alone. The number of CFOs overseeing their company’s digital activities had also doubled in that time, with many claiming they are being asked to solve issues that are relatively new to them.
So let’s take a look at what CFOs do these days.
They are change leaders
CFOs are now just as focused on strategy and company growth as the CEO and other business leaders.
There is now no discernible divide between strategy and finances, with both concepts inextricably linked to drive the business forward.
CFOs these days will come up with financial incentives to drive growth and talent acquisition and even help to price the company’s products for optimum appeal.
They will work with the c-suite to establish KPIs, measuring the outcome of workplace change, and managing cash-flow improvements to assist innovation.
They are digital natives
Many CFOs are at the forefront of the digital revolution, and have adopted data analytics software to help them peer into the inner workings of their bottom line.
The software is able to generate data visualization that allow CFOs to analyse their profits, consumer trends and overall business position by viewing sales figures and company data on an interactive dashboard.
This kind of data analytics can show a CFO, for example, which stock is moving and what products are performing poorly, allowing them to make strategic business decisions to enhance the company’s bottom line. As the captain of big data, this makes the CFO role hugely influential within the organization.
The McKinsey report noted, interestingly, that CFOs often struggled to access the internal financial resources to digitize, but those that did reported considerable benefits. Some 70 per cent of digital adopters reported moderate to significant returns on investment.
They are value-adders
CFOs are no longer concerning themselves solely with their own department. Like other c-suiters they are expected to bring their talents to bear upon other divisions within the company.
They are cross-pollinators, if you will, of their considerable skill and financial expertise, ensuring that other divisions and departments are working as efficiently and effectively as possible, while looking for strategic opportunities to add value.
This means they go beyond cutting costs and ensuring efficiencies. These functions are important, no doubt, but they shouldn’t come at the expense of calculated risk-taking by the CFO or innovative leadership that identifies new pathways of disruption. It may mean facilitating a new marketing project, for example, because the CFO can see the long-term benefit and return on investment or even proposing new services to support or replace existing product lines.
They build talent
Finally, the CFO must ensure that the skills and talents that make them so valuable are developed in their top tiers of talent.
The CFO’s language needs to align with overall brand strategy and filter throughout the organization to motivate staff and ensure a consistent voice and across all departments.
Part of the CFOs role therefore is to build and share, rather than hoard, company talent, which in turn makes their life easier and ensures maximum profitability,
Clearly, a CFO role in this day and age is not for the faint-hearted. It takes stamina, a range of hard and soft skills, and it has never been more demanding. However, for those who thrive in change and relish the opportunity to work across divisions and oversee genuine innovation, it’s a dream job.