CFO career success can be achieved In these times of accelerated change, where businesses are often facing a near perfect storm of challenges in keeping up with, let alone getting ahead of, the competition.
Agile CFO’s are harnessing new ways of working to turn traditional finance models on their heads seemingly overnight.
Disruptive financial technology is revolutionising every aspect of the finance function.
Digital, mobile and automated technology have already had a considerable impact on every aspect of a business and the finance function, and yet we have only just scratched the surface of what is coming down the line in terms of Artificial Intelligence (AI), Augmented Reality (AR) and machine learning.
The combination of disruptive technology and nimble new business offerings has led to a generation of customers (both business to business and consumer) who expect personalised, seamless customer journeys and almost instant delivery.
As such, organisations need to ensure they can be agile, responsive and innovative. While for many larger, more traditional organisations, such transformation can be challenging, the stark reality is that for the majority of businesses, it is a case of adapt or die.
One doesn’t need to look very far to witness many organisations which have suffered this very fate. Kodak’s failure to embrace technology to develop digital cameras and Blockbuster’s inability to mitigate the advent of Netflix ultimately caused their demise.
However, while these are, without a doubt, challenging times in which to do business and carve out a career as a CFO, they are also times of great opportunity.
For those organisations with the foresight, vision, creativity and agility to harness technology and master new ways of working, there is real potential to drive growth and steal market share.
It is against this backdrop that a CFO can make their mark.
Once regarded as the bastion of stability and consistency, the role of the CFO is evolving as rapidly as the business landscape.
To see the role of CFO as purely a transactional one is to do it a disservice, but it remains the case that it is undoubtedly regarded as one of the more reliable, traditional leadership roles – part of the old school trinity of CEO, COO and CFO.
In recent years, many more ‘chiefs’ have been added to the table, from Chief Digital Officer to Chief Data Officer, Chief Innovation Officer and Chief Information Security Officer.
However, even with all these new chiefs on the block, the role of the CFO is perhaps more critical than ever.
While business transformation may be high on everyone’s agenda, there is still absolutely a place for a steady hand and robust financial stewardship.
In fact, with an army of new competitors nipping at the heels of many businesses, strong financial governance is perhaps more important than ever.
So, while the traditional attributes strongly associated with CFOs are still relevant, in this brave new digital world of business, they are not enough.
The CFO needs to be able to bring a host of new abilities to the table to act as facilitators of change and transformation.
With this in mind, here are four key competencies that CFOs need to have in their arsenal:
#1. Data Smart
Often referred to as the gold of the business world, the importance of data cannot be underestimated.
Every day, reams and reams of it are being produced. From an external point of view, customers are telling you what they like, dislike, want and don’t want. That’s without even considering the information coming in from partners, suppliers and other stakeholders.
Internally, there are an array of other data sets to contend with; employee data, business performance, operational efficiencies. The list goes on and on.
The sheer volume of data is in itself a considerable challenge. Joining it all up to get a clear picture is a mammoth task and should of course not fall to the CFO alone, but they do have an important part to play.
It is no longer enough for a CFO to concern themselves purely with financial data – although how this is produced and analysed are evolving rapidly.
They need to be able to appreciate that data is the lifeblood of any business and needs to be treated as a vital tool in defining and refining growth and transformation strategies.
That’s not to suggest that a CFO needs to become a fully fledged data scientist, but they do need to be able to work with data specialists to translate data and feed it into broader business planning.
#2. Resilient to Risk
Handling risk has, of course, always been part of a CFO’s remit.
However, the days of being too risk-averse are over, as businesses need to be bold and innovative to keep ahead of the competition.
Instead, CFOs need to become experts in balancing risk to make calculated decisions.
A large part of this will also involve breeding resilience to risk across the business.
This is mainly because organisations are facing increasing risks from a growing range of areas.
Competitors, fraudulent activity, cyber crime, compliance and regulation – the list of potential risks to a business is a long one.
CFOs not only need to understand which risks to prioritise when it comes to allocating budgets, but they also need to recognise where risks to cash flow and business growth are likely to come from next in this new digital world.
#3. Passionate About Technology
Pervasive digital technology has changed every business function and finance is no exception.
CFOs need to understand how disruptive technology can be harnessed to improve efficiency and operations, especially when it comes to capturing and analysing data.
Not only this, but CFOs also need to appreciate how technology can be used across the business as a whole and where it will add the most value.
With such rapid advancements in technology and so many options to choose from, a CFO needs to be able to judge where to invest wisely and not just because a technology is shiny and new.
AI may seem incredible, but unless there is a clear business case as to how it will add to the bottom line and deliver ROI, then valuable budgets can be allocated elsewhere.
#4. Relationship Builders
The CFO as a ‘people person’ hasn’t always been the most apparent association, but to truly help effect change, a CFO needs to be able to build relationships, communicate a vision and bring people on a journey with them.
They need to act as the bridge between elements such as technology or data science and the rest of the leadership team, to help communicate why investment in particular aspects will drive transformation.
Not only this, in such a competitive marketplace, a CFO needs to ensure they can access the best possible talent to join their team.
The CFO needs to wear many hats and combine traditional finance skills with new digital ones. However, to be successful as a CFO, they need to be:
1. Data Smart.
2. Resilient to Risk.
3. Passionate About Technology.
4. Relationship Builders.
It’s a challenge to master these, but for the right candidates, with the vision, creativity, nerve and agility, the career rewards are most certainly there for the taking.