As we are going through a time of unprecedented change, businesses have had to adapt quickly to new ways of working and changing geopolitical and economic environments. Finance leaders have been highly involved in shaping how businesses should adapt and as the focus shifts towards preparing for the future instead of crisis management, it is undeniable that the role of the CFO has changed too. In addition to their financial duties, CFOs are taking on more strategic and operational responsibilities and although this trend has been developing for a few years, the pandemic has accelerated this process.
CFOs are the guardians of key financial data and of reporting on the business’ performance, however their role is also to help the CEO and the Board drive business performance. And to do so, there are several levers that the finance community will have to consider.
Technology has been a fantastic enabler of business over the past decade and has been crucial during the pandemic. CFOs need to be digitally fluent and champion digital transformation. Pressing on with further automation of finance processes will free up time for team members to concentrate on work that will add more value to the business. With less time spent on transactional tasks, the team will be able to focus on analysing data to give valuable insight and spend more time partnering with the business. Investing in artificial intelligence and advanced analytics tools will provide more reliable and in-depth data to support the management team in making informed decisions. Digitisation should also be considered across the whole organisation. With more dependable data, the finance team will be in a better position to support marketing, sales, supply chain and other functions on making the right investment choices to streamline processes and improve efficiency.
Building capability in the business is going to become key for any company that wishes to keep growing. With an oversight on the different operations and their performance, the CFO is well placed to lead the adaptation to new market conditions. Investing in new systems and technology has been and will remain key, however without employees able to operate these new tools the dial will not move. Ensuring the existing workforce is upskilled and that the company employs and hires individuals with the right skillset will enhance operational efficiency and support financial performance. A greater digitisation also means relieving pressure on the workforce with more flexibility, less risk of burnouts and ultimately better employee engagement and retention.
Another area where CFOs will have a key part to play is in addressing social and environmental issues. Businesses will need to become more sustainable and the unique access that CFOs have to financial and commercial data give them a pivotal role in supporting the business through this transformation. By adapting the business model and evaluating ESG risks, CFOs can build the company’s strategy around more sustainable ways of doing business and include ESG related criteria in their investment decisions. This will boost employee engagement and investors’ interest, therefore making the company more attractive.
As demand evolves and the market changes, CFOs will be well placed to look at potential M&A opportunities. Whether it is to broaden the business’ offering, gaining access to new countries or acquiring a disruptor with a competitive edge, CFOs will be expected to provide strategic ideas and innovative plans to grow the business.
As companies are adapting to ever changing economic, health and environmental situations, CFOs will need to stay abreast of external and internal challenges that could affect the business and learn how to fine-tune their influential and communication skills. Having a vision for the business and being able to step outside of the finance silo to get not only the executive team but also the rest of the business on board will be extremely important.
At Partner Executive, we have seen the evolution of the role of the CFO over time. However, now more than ever, finance has a critical role to play in shaping companies for success across the whole organisation. Partnering with different functions, recognising the need for digitisation, driving cost transformation, retaining and attracting the right talent to support the business and driving sustainability initiatives are part of the CFOs agenda for the years to come. It can seem daunting, but who would not relish such a challenge?
