“A CFO needs to go beyond being ‘the finance operations expert’ to become a corporate strategist who can enhance the firm’s valuation and brand, and win over stakeholders’ trust and goodwill.” — Maureen O’Connell, Former CFO of Scholastic
From the outside, a CFO’s typical day may look like this: crunching numbers, reporting to the CEO, and then dreaming yet again about numbers at night.
But the current reality is far from that — far from the ‘traditional’ function of a CFO, that is.
With the emergence of new technologies and tools, the CFO’s role has significantly evolved. More than simply having a Midas touch when it comes to numbers, CFOs are expected to be flexible, agile, and have a forward-facing growth mindset, especially as businesses navigate these rapidly changing times.
Looking Forward Rather Than Back
Deloitte’s CFO Signals report for Q1 of 2021 revealed that 54% of CFOs reported receiving additional demands from their superiors since the pandemic began. These demands are still expected to increase as we move forward post-pandemic, thus requiring finance executives to have greater flexibility and the willingness to drive innovation. In essence, today’s CFO must move from a traditional mindset to a more modern one.
The main difference between the traditional and modern CFO is their ability to adopt a strategic direction, with the company vision at its core. This aligns with the recent observation that over the past few years, there has only been only a small uptick in finance executives being promoted as CEOs, compared to the more common occurrence of COOs being tapped for the role. This trend has persisted, despite the growing importance of the CFO function in the age of technology adoption.
Three decades ago, if a CFO was promoted to the position of CEO, it would have been an ominous sign — this often meant that the company’s finances were disorganized or unhealthy. At present, it’s regarded more positively, as the typical CFO position now incorporates a sufficient amount of strategic decision making to make CFOs viable leaders.
A Multi-Faceted Role
CFOs are now widely involved with company-wide efforts and strategies, and are instrumental in securing the company’s future amid drastic changes. Here are some of the major roles modern CFOs are now taking on:
- Stewards of Technology – Critical for the growth and viability of businesses is digital transformation, a pillar of which is accurate financial information. CFOs are stepping up to the challenge of employing data-driven systems while leveraging AI and ML for making crucial financial decisions. Technology adoption may start within F&A teams, then spread further across the entire organization.
- Key Consolidator – The global pandemic has undeniably made the CFO role more complex and visible at the same time, acting as a strategic collaborator with stakeholders at every level. Remote work didn’t stop CFOs from being proactive in gathering data and feedback, which brought about transparency, drove better performance across all points, and provided teams with a clearer business growth trajectory.
The CFO’s function goes well beyond the figures; they play a pivotal role in challenging the outdated “this is how we’ve always done things” mindset. It’s about embracing the tech that enables frictionless workflows and streamlined processes, rather than investing in tools that add little to no value at all. Technology is one of the key elements that shape a business’ competitive edge which eventually fuels growth.
Moreover, it goes without saying that your entire finance team should be thoroughly onboarded and educated with the technology you’re adopting. Tech upgrades are useless if F&A teams are not trained how to maximize them, particularly for workflow augmentation and long-term scalability.
In the words of Sankar Narayan, former CFO (now COO) of Xero, “the modern CFO needs to propel a culture of security. No longer is our job just about revenue, costs and budgets.” As the CFO role undergoes the necessary transition, the finance department — and eventually the entire organization — can be made resilient enough to weather any change.
Photography by Jungwoo Hong via Unsplash