We all realize business owners and top executives have extensive demands and commitments in their leadership role. To be successful in a top executive role we believe actively engaging your CFO in tackling the daily challenges, developing strategy and driving innovation will provide significant value and edge to your organization.
An expanded role of this position will provide fresh insights and analysis to the company’s executive management, ensure that business decisions are grounded in sound financial criteria and generate progress on financial goals of the business.
The days of the CFO sitting in the corner office reviewing and scrutinizing financial data are long gone. A CFO should be a strategic business partner above all else, with an appreciation for all the moving parts in the business. The most effective CFOs have an active role in supporting the CEO throughout the organization, but can also be his or her most honest critic in private.
In addition to extensive experience and a strong knowledge base in financial, accounting and tax matters, the most effective CFOs should also possess skills in the following areas:
To fulfill critical strategic priorities, a CFO needs to understand digital technologies and data analytics. Digital savvy is a priority across industry sectors because it offers opportunities for growth in new markets, through new products and delivery models, or by transforming existing products or processes. Digital issues also have implications for how goods and services are sold, where companies base their operations, robotic implementation and new competitors.
A good digital strategy should help a company figure out which technology provides the best return on investment and other intangible benefits. Financial leaders who understand how their company can deliver on its digital strategy can coordinate and focus capital investments in the right area.
For companies to turn information and technology efforts into a long-term competitive advantage, data must become integral to the business strategy and data analytics delivery must match the business key requirements. To gain more value from data analytics, business leaders should focus on utilizing user-friendly tools, identifying key measurements and aligning incentives and rewards with the actions and results you desire to achieve.
In a recent survey, a majority of financial leaders in both large and small companies have stated they believe risk management is a key capability needed from the finance function. To serve this role effectively, CFOs must think beyond prevention and identify potential risks, fully vet risks in strategic and business planning discussions, and take the time and resources to recruit talent in this area or partner with experts in advanced analytical risk management.
Stakeholder Scrutiny and Regulation
Most organizations need to improve their skills in managing relationships with stakeholders, including investors, regulators and employees. Understanding what drives stakeholders, communicating proactively and delivering a consistent and objective message about the business and financial matters is critical to strong stakeholder relationships.
In addition, intense regulatory scrutiny requires CFOs to also work even more closely with policymakers and all decision-makers throughout the organization, to ensure ethical decision-making is being actively promoted and monitored.
Successful CFOs are effective communicators and are as comfortable talking to boards and investors as well as a roomful of software engineers and support staff. They are flexible and listen to new ideas, are commercially astute and up to date with financial, economic, technology and industry matters, and can successfully translate complex issues into simple, understandable concepts.