The role of the CFOs has evolved significantly over the past decade and a half. Today, CFOs are like Swiss knives - Jack of all and master of many.
And times before, CFOs were primarily responsible for back-office operations and validating business decisions made by CEOs and other business-facing leaders. However, CFOs are becoming increasingly involved in strategic decision-making and playing a vital role in driving growth and profitability.
This shift is due to several factors, including the increasing complexity of the business world, the growing importance of data analytics, and the need for CFOs to be strategic partners to the CEO.
In this blog post, we will explore the five characteristics that define the successful CFO of the future. It's time that we get deeper.
5 CFO traits that have become inevitable
The successful CFO of the future will need to be a strategic thinker, a data-driven decision-maker, and a leader. They will need to be able to see the big picture, understand how financial decisions impact the overall business, and use data to make informed decisions. They will also need to be able to build relationships with other business leaders and motivate their team to achieve common goals.
Below is a list of five attributes CFOs should acquire in 2023 and beyond. They include:
#1 Owning growth and not spectating
Given their strategic position, CFOs are driving and managing top-line growth in all organizations. Small teams dedicated to sales pipeline health and growth are not uncommon amongst CFO offices today.
CFOs are often involved in initiatives that are focused on top-line growth and customer experience (CX). The finance function is increasingly getting involved in a host of ways, including a risk identifier in deals and a productivity improvement consultant for teams.
This mighty change can very well be attributed to how success is being measured. Since, CEOs and investors focus more on business health and market expansion, CFO's role of a spectator of operations and reporter of financial results are not valid anymore.
#2 Being strategic partners
CFOs have become strategic partners today, guiding both financial and organizational initiatives. As strategists, CFOs will bring financial initiatives and planning into sync with those from other business units and create a cohesive whole that drives innovation.
Furthermore, they provide essential context and support for long-term investments. They develop new ways of providing complete and transparent financial insights for investors and other stakeholders.
Based on a KPMG CFO survey, 93% of CFOs expect themselves to be actively involved leading digitalization projects (33%) or partnering with CIOs (60%).
Given their proximity to and deep understanding of data and the correlation of KPIs, CFOs are often leading the charge when it comes to organizational transformation. CFOs ought to have a leadership mindset, taking risks and new challenges to deliver value. They must partner with CXOs to lead business model and cost structure transformation.
📖 Read more: The CFO-CIO relationship explained.
#3 Leading in all fronts, especially tech
The redefinition of the CFO role has come with newer expectations. The new priorities of the CFOs are upgrading tech solutions, integrating emerging technologies, and developing innovative products.
The finance function is increasingly turning into a testbed, fueling and incubating innovation for the rest of the organization to follow. The proximity to data that a CFO has is unparalleled and is truly a strategic asset in the right hands.
#4 Serving as an astute risk navigator
Today, CFOs are responsible for managing the company's financial risks. They identify and quantify risks, develop mitigation strategies, and monitor the effectiveness of those strategies. This is a critical role, as even a small risk can have a big impact on the company's bottom line.
Moreover, they need to be proactive in managing risk. They need to constantly be scanning the horizon for potential threats and developing plans to mitigate them. They also need to be prepared to act quickly when a risk materializes.
The role of the CFO as a risk navigator is becoming increasingly important. As the business environment becomes more complex and volatile, businesses need to have a robust risk management framework in place. CFOs are uniquely positioned to lead this effort.
Based on a Gartner CEO and Senior Business Executive Survey 2022, around 25% of the 88 CFO surveyed looked to increase their budgets to manage risks and improve compliance.
#5 Acting as a data wizard
The CFO of today needs to be as comfortable with data as wizards are with their wands. The CFOs have become the fiduciary owner of not just accounting data but data from all sources and departments.
This helps CFOs improve an organization’s situational awareness. The Modern CFO steers the organization through predictive models and advanced analytics across departmental data, connecting the dots and getting a 360-degree view of business situations.
Based on a Gartner survey across companies, 71% of the skills needed for advanced analytics capabilities are already familiar with finance. This is substantially higher than any other department.
To sum up, CFOs must be able to interpret financial information while connecting the dots with operations in real-time. What organizations need are multifaceted professionals that breathe and strive for cross-functional data.
Final thoughts
Finally, CFOs who develop the above skills proactively will be well-equipped to navigate the dynamic environment. They could drive their organizations toward sustainable growth and innovation.
Yes, the future belongs to those who invest in their professional development today and position themselves as agile, tech-savvy financial leaders ready.
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