Traditionally, a chief financial officer provides leadership in the management of all financial matters. That includes managing budgets, financial forecasting, preparing reports and giving advice on business and financial planning.
Increasingly, the role of the CFO is changing in the wake of dynamic marketplace changes in the Digital Age.
Influencer role
The rapid evolution of the CFO role includes more responsibilities beyond their traditional financial expertise and in driving change.
In addition to being good stewards of assets, it means encompassing more information-technology initiatives and resolving matters outside the traditional CFO role.
To accomplish this, CFOs are counted upon to increasingly display a C-suite acumen and agility to influence change.
All the while, the CFO must help lead in short-term performance as well as for the long term.
Acute challenges
In an age of aggressive or active investors, these challenges are particularly acute for companies thinking about making an initial public offering or those that are already public companies.
All of this is influenced by the pace of technological change including analytics, automation, data imaging, and other computerized processes.
With the continuous focus on short-term performance, CFOs must lead the way as financial architects in planning for the long term.
This means communication is key. CFOs have to establish key performance indicators and metrics, and be adept in explaining and in proving how the organization is creating value.
For public companies, there is intense pressure to meet short-term value goals and to provide vision for creating long-term value.
Talent management
CFOs must show inspirational leadership. That means talent management to meet company objectives all while managing financial matters.
Driving performance with employees, in effect, means cross-functional courses of action through personality and charm. That’s a tough job for someone simply educated in the best practices of finance.
The CFO must marry the finance function with human resources under the direction of the chief executive officer and in collaboration with the human resources manager,
Traditionally, the CFO’s responsibility has been to determine how, why and where to invest resources. The HR professional is the authority on personnel matters. The CEO plots the company’s course.
Now, from the digitization evolution, more emphasis is on data analytics and an additional responsibility.
CFOs are increasingly expected to lead in attracting, retaining and managing of talent for the finance function for the short and long term.
Adapt for high-value pursuits
This, of course, means the finance personnel need to continually learn new skills and technology to adapt to change in order to accommodate upcoming projects whether it’s company expansion into new markets or capital expenditures.
Regarding priorities, CFOs must continually focus on high-value activities.
But they’re interrupted constantly by unplanned requests. They need to be patient, adhere to the requests and try to share financial skills and tips to minimize the number of such requests in the future.
If they can limit the number of unplanned requests, they can better perform their jobs in reflecting and strategizing for the overall welfare of the organization.
Plus, everyone else will become more self-sufficient once finance skills are embedded throughout the company.
So, the more CFOs proactively take full advantage of automation of functions, become more agile with evolving digital technologies, the better off the company will be in succeeding in its competitive marketplace.
This means CFOs must be infinitely prepared to lead in finance, digitization, influence and planning.
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“Growth is never by mere chance; it is the result of forces working together.”
-J.C. Penney
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