The role of the CFO is becoming more and more difficult to define as it has continued to evolve during a time of significant changes in global economic markets, and the digitalisation of businesses.
The CFO role has explicitly become increasingly commercial and strategic, with a mandate to drive business performance and prepare organisations for future growth as well as the traditional “number crunching”.
There are many skills, traits and attributes that a successful CFO should have. In this article, I highlight four of them that I think merit particular attention for any CFO aiming to progress their career in this Digital Age.
Investigating strengths, weaknesses, challenges, and growth opportunities, Oxford Economics and SAP surveyed over 1,500 CFOs and other senior executives from around the world.
The survey looked at traits that set the most successful financial executives apart from the rest. The ability to work collaboratively was the top trait identified in the survey which distinguished ‘Leaders’ from their peers.
The survey found many of the traits identified to correlate with robust profitability.
Regular collaboration with other parts of an organisation was seen to be vital to being a successful finance leader who can drive improved business performance.
The survey confirms that a CFOs position now extends far beyond the finance function.
Today’s successful financial leader is expected to form and maintain healthy peer relationships across the organisation.
The nurturing and development of C-suite and line management relationships across functions including sales, HR, customer service, research and design, and marketing all play a part in the CFO’s role.
Without these strong collaborative links, business performance may suffer. So, it is vital that a finance function is not perceived as isolated.
In particular, a significant relationship for a modern CFO is that with the CIO.
With the increasingly ubiquitous role of technology, a collaboration between a CFO and CIO is becoming a vital factor in corporate success.
This relationship should be based upon a level of mutual understanding; after all, in most organisations, the CFO and the CIO share a similar mandate, that is, ensuring that the business runs efficiently, maintaining stability and strategically shaping the future growth of the organisation.
To do this, the CFO and CIO really should be working closely, with the CFO providing real-time financial data.
A CFO should, therefore, have a solid grasp of business IT, understanding their technical counterpart’s objectives and issues for both executives to provide the real-time analysis required collectively.
#2. Strategic Thinking
For some time, CFOs have been expected to become more involved with broader business strategies. Therefore, it is vital for a modern CFO to be a business strategist.
While the operational demands of the business may still require accurate financial data, the very best CFOs are great leaders and strategic thinkers.
The focus is shifting from transactional and reporting to in-depth analysis and insight as CFOs are under pressure to provide real-time data and detailed analysis to drive the best possible business decisions.
It is no longer sufficient to periodically report on performance, or track fundamental financial performance indicators.
CFOs have access to data from across the organisation; of every department’s objectives and performance. This renders the role critical in evolving the business’ strategies.
Successful CFOs will take a holistic approach to key performance indicators, including operational, non-financial KPIs, even going beyond KPIs to Key Performance Drivers (KPDs) which are forward-looking.
By taking a broad approach, combining historical data, live data and looking forward at KPDs, a CFO can gain the requisite oversight and advise on future business strategies.
Research from Forbes, compiled for Dell, showed that 85% of business executives intended to allocate up to 25% of their budgets to digital transformation.
Also, the evidence does seem to show a correlation between the success of digital transformation programmes and a company’s profitability.
A study by Randstad showed that 10% of organisations have thus far delivered successful digital transformation and, because of this, these businesses have seen a growth in profitability.
Technology is increasingly linked to improvements in business performance.
Managing Director of Deloitte Consulting LLP, Sam Parikh, advises organisations on large-scale financial transformation projects and cites improvements in information technology, especially analytics, as helping finance executives work more closely with their internal customers.
In Randstad’s Study, the importance of digital transformation was highlighted.
Employees and Chief Executives were asked to list the traits they believed were required of the business leaders of the future and, interestingly but perhaps unsurprisingly, digital factors featured heavily.
This mandates the full exploitation of current and emerging technologies to drive business success and to create a corporate culture in which employees are acquiring and honing skills in preparation for the integration of new technologies into the workplace.
#4. Talent Management
Digital transformations require workforces to be up to date with technologies and approaches.
Just as the role of the CFO has expanded and evolved, so has that of the modern finance workforce.
With digital transformations in finance, a modern finance department cannot thrive on traditional technical skills alone.
The top performers in finance must possess strong digital and strategic skills, in addition to an innovative approach, creative thinking, communication and problem-solving skills.
Companies are looking to hire professionals with the appropriate skill sets to manage and achieve business objectives, but this is not an easy task.
For CFOs to be successful in moving the business forward, they must be able to attract the highly skilled talent required but how can this be achieved?
It is vital to building a forward-thinking digital finance function to attract highly skilled talent. Digital innovation is incredibly important to today’s finance staff.
Research suggests that 40% of employees left an employer because they didn’t have access to the latest digital tools.
In terms of key factors which make an organisation appealing, employees rated the company’s use of the latest digital tools, an innovative culture and the firm’s digital leadership all as highly important.
The message is clear; build a reputation as a digital leader, a forward-thinking, innovative firm, and you will attract the highest quality talent, retain them and thereby drive organisational success.
High performing CFO’s:
2. Think Strategically
3. Embrace Digitilisation
4. Manage Talent
It is clear that these traits are relational.
Collaboration allows for effective working with all departments and executives.
Precisely this collaboration drives the understanding and implementation of digital transformation programmes.
These, in turn, are vital for a company to be perceived as an innovative digital leader and thereby attract talent to the organisation.
A holistic approach, taking into account all these factors, is essential.
Focus on these attributes, understand their importance, how they interact together, impact on the role and how to put them into practice and any CFO can become the financial and strategic leader required by organisations today and in the years to come.