The CFO Of The Future (No, They Are Not Just The "Finance Guy") The number of hats worn by the CFO, who was initially a finance manager, or, more generically, a "finance guy," has grown.
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All competent businesses have competent chief financial officers (CFOs). Indeed, it is difficult to envision any serious business venture -startup, local corporate, or multinational- without a CFO at the helm, spearheading value creation, strategy development, and, of course, financial reporting. A brief survey of history, however, reveals that the spirit of the CFO is, quite likely, still in its infancy. The birth, so to speak, of the CFO position can be traced back to as recently as the 1960s, following which it has experienced a drastic flux in terms of duties and responsibilities.
We, at Michael Page, have had front-row seats in witnessing the CFO's evolution from a back-office bookkeeper to a strategic, tech savvy business partner. As the demands of business have grown with heightened competition, access to education and technology, and global connectedness, so have the number of hats worn by the CFO, who was initially a finance manager, or, more generically, a "finance guy."
Gone are the days of the rigid job description entailing budgeting, book-keeping, and tax reporting. Today's CFO is, among others, a leader, a trusted advisor to senior executives, a systems and operations expert, a master negotiator, and a technical specialist. The expansion of the CFO's scale and scope remains underway, presenting a host of challenges and, naturally, opportunities for the modern-day business.
How best to tackle the challenges and appreciate the opportunities at hand? Enter Michael Page's CFO and Financial Leadership Insights report. The culmination of extensive primary research by way of surveying top global CFOs and industry experts, our Insights report adds concreteness to the sometimes "fuzzy" nature of the modern CFO's job description. Our analysis sheds light on four broad ideals the best CFOs must personify in dealing with new-age business issues such as compliance, technological disruption, talent management, and cybersecurity.
These ideals are, in no particular order, that of Coach, Pilot, Scientist, and Engineer. As a Coach, the CFO must project strong leadership and mentorship to motivate their troops. As a Pilot, the same CFO must align policies and strategy in order to navigate turbulent markets. The Scientist within the CFO must guide their organization to the bleeding edge, whilst the Engineer develops feasible solutions across the business to achieve business goals at all horizons. We find, and indeed agree, that the top CFOs must not only rigorously master each ideal, but also diplomatically prioritize between them on a circumstantial basis.
In a similar manner, the top business issues identified by our CFO network are interconnected. In fact, this interconnectedness is exponentiated by the ideal chosen -Coach, Pilot, Scientist, or Engineer- when evaluating a problem. Resultant solutions, again, are fluid and related.
Cybersecurity -once a buzzword within academia and industry- is now a household term demanding attention across all units of society. By some estimates, north of a million cybersecurity attacks occur globally every day. WannaCry remains fresh in our memories as a ransomware that almost instantaneously plagued entities across 150 countries last year. Needless to say, businesses must fortify their armor. Surely, the CFO mustn't be responsible! On the contrary, the Scientists within our research group strongly expressed the importance of IT skills; the Coaches focusing on providing related training across the board. The Pilot sees a warning light while relaxing in their metaphorical cockpit, immediately tasking the Engineer with securing the business' digital assets. A task for a team of experts- who also happen to be key characters assumed by the same person! At this juncture in our discussion of deeply detailed, technical matters, it is instructive to take a step back, and appreciate the value of optimality in operations: not too much, and surely not too little.
"Information overload," perhaps one of the severest problems faced by society at large, was first introduced as a concept by the philosopher Denis Diderot in 1755. Nearly three centuries later, our CFO respondents, such as Philippe de Briey (EU CFO, Monsanto), posit that time-consuming, transactional aspects of finance and business in general be automated, freeing up resources for strategizing by the Pilot, and soft skills development by the Coach. Ryan Mangold (CFO, Taylor Wimpey) interestingly claims that "the soft skills of the CFO are ultimately more important than the technology," and rightfully so. The Pilot needs to negotiate high-level matters, whilst the Coach nurtures their teams to eventually do the same; though "they" would be greatly hindered without the laborious systems implementation by the Scientist and the Engineer. Thus, the modern-day CFO is tasked with the rather elusive goal of developing granular data streams and encouraging their analysis within a perspective prioritizing commercial feasibility and broader business objectives.
Michael Gary Scott -from the hit US comedy, The Office- is perhaps known more for his comical antics than his words of wisdom. Nonetheless, he once told his subordinate that "people will never run out of business." Our research respondents resonate with that statement, adding that the battle for (technical) talent in finance has never been fiercer. In particular, it is critical to get "the right people in the right roles," says Bob Braasch (CFO, Marathon Capital). One of these right people will inevitably become CFO of an organization, consequently being required to uphold the four characters introduced earlier.
In this respect, our CFO respondents believe it is their responsibility to develop strategy, vision, and a clear path. Florence Rocle (VP Global Finance Services, Sodexo) says that "if you define too many objectives, or the strategy is vague, you can go in so many different directions and end up doing nothing." The Engineer and Scientist must implement an appropriate talent pipeline for the Finance function, and perhaps the broader business, whilst the Pilot leverages incoming talent with a chessboard view incorporating the nurturer approach of the Coach.
Our hypothetical characters' strengths, competencies and solutions to a vast array of issues -in addition to the above- are studied at length in our Insights report, accessible on our website. To reign in our discussion, there are some key value-generating takeaways I wish to emphasize.
Multinational behemoths benefit from high caliber CFOs just as much as garage startups. Said high caliber CFOs must now amalgamate competence and experience in technical finance, management and leadership, systems and controls, risk management, technology, and strategy, to name a few. To clarify, any perceived burden generated by these demands is completely overpowered by the potential represented by top finance executives, focusing on the four characters with an eye toward the important issues raised in our report. An increasingly synchronized world with consistently diversifying business institutions demands all-embracing CFOs. Our Insights report will help navigate your journey to find, or become, a CFO of the future. I conclude with the almost deceptively utilitarian advice of Jim McNey (Senior VP & CFO, North Kansas City Hospital): "You've got to go out. You've got to get educated. You've got to stay current on what's going on. You can't ever quit learning."
Check out Michael Page's CFO and Financial Leadership Insights report online.
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