There’s never been a better or indeed busier time to be a CFO. When I first started out in the world of finance almost two decades ago, the role of the CFO was completely different
There’s been a definite and pronounced shift from the more traditional duties to a less defined role that sees the CFO wear many hats, and act as a vital linchpin in any modern company’s strategy.
For organizations to not only stay
The primary duties that have traditionally fallen within the realm of the CFO revolve around safeguarding assets, cashflow management, understanding and managing risk, financial reporting, interpreting performance and general financial planning and analysis.
These have always been—and will continue to be—the foundational duties of a CFO. However, the shift we have seen has transformed these from the primary responsibilities of a CFO into a basic requirement, with the new expectations of the role focusing more intently around helping execute the strategic plan.
As a result, any successful CFO must make sure that they build a team that enables them to deliver a high standard of work across every one of these occupational pillars, freeing up time for the CFO to support the board in driving the business forward.
Simply put, if you don’t have the basics down, then you’re probably not quite ready for this role. You need to walk before you can run and conquering these aspects of the job should really take up relatively little of your time. Most of your attention should be on working hand in glove with your CEO and building relationships with C-Suite to run the organization in a way that is both tactically and strategically effective.
Technology and the role of the CFO today
Technological evolution has played a significant part in shaping the role of the CFO. In the past, a CFO may have spent more time looking at internal data to perform their role—this is now an outdated and ineffective approach.
There are more data aggregators now than ever before. Social media allows us to identify macro trends or engage with large communities in a way we couldn’t previously—but how are CFOs leveraging these new insights to assist with things like financial planning and investment decisions?
Staying on top of technological developments in your industry is crucial. You need to be able to harness tech and use big data to your advantage, leveraging all of that to gain deeper insights and widening the scope of your organization’s vision. Without the practical skills necessary to analyze and understand that data, a CFO can’t access what they need to optimize business strategies on the same level as competitors.
Communication is key
Delivering all of this—and more—without a hitch means that you’ll need to prioritize building bridges and fostering strong relationships across senior management, and the wider business too. If there’s one thing my experience in this industry has taught me, it’s that as a new CFO, you should dedicate the first few months in your role to getting a granular understanding of how your organization ticks, and how every gear in the machine works together to keep things steaming ahead.
This goes beyond finding out who’s responsible for what on a day to day basis—you need to dig deep into your company’s value proposition, get to know the markets you’re operating in, your company culture, the challenges your business faces and the opportunities it’s on the hunt for. You need to become well-acquainted with your people, finding out what keeps them motivated and what they expect from the business.
Take the time to sit down with different departments directly involved in business-critical decisions. This will help you get a clearer picture of how the company works and will help you appreciate how any business plans or budgets you approve will impact not only their day-to-day operations, but the domino effect it could have on other areas of your organization.
Neglect to lay the groundwork early on in your role as CFO, and you could inadvertently have a negative effect not just on a specific department, but on the wider business too. In leaner times, when a business isn’t meeting its targets, the CFO’s kneejerk reaction is to cut costs—but this could fundamentally be the wrong solution. While close analysis of company cost base is crucial, cutting costs may be treating the symptom rather than the root cause; this is something a CFO won’t be able to appreciate unless they have a first-class understanding of the business in which they operate.
As a CFO, you need to be able to look into the future; always ask yourself what the long term impact of your decision will be before approving and implementing any kind of change. The best course of action could well be investing in particular areas of your business that’ll give you the biggest payoff in the long run.
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