From financial chief to business strategist: the new CFO mindset

Once lock­down is lift­ed and social-dis­tanc­ing restric­tions ease, will busi­ness quick­ly get back to nor­mal? Or will we see a pro­found and cus­tomer pref­er­ences? Here are six changes in con­sumer behav­iour as a result of the coro­n­avirus pan­dem­ic that mar­ket­ing pro­fes­sion­als should be aware of.

Life for the chief finan­cial offi­cer (CFO) is evolv­ing rapid­ly, with their role increas­ing­ly as much leader and strate­gist as accoun­tant. Cou­pled with adop­tion of tech­nolo­gies, includ­ing arti­fi­cial intel­li­gence, machine learn­ing and advanced data ana­lyt­ics, this is dri­ving a shift in the CFO’s mind­set, with a focus on what mat­ters most: busi­ness sur­vival, pro­duc­tiv­i­ty and growth.

Tak­ing on a broad­er and more strate­gic role requires a broad­er skillset that will enhance busi­ness growth. “Boards will expect future CFO can­di­dates’ CVs to include expe­ri­ence in oper­a­tional or dig­i­tal roles and expo­sure to dif­fer­ent mar­kets and indus­try sec­tors, and opti­mi­sa­tion across the whole busi­ness, rather than just from a cost-con­trol per­spec­tive,” says Tony Gregg, chief exec­u­tive at exec­u­tive search firm Antho­ny Gregg Part­ner­ship. 

This could sig­nal new oppor­tu­ni­ties for can­di­dates from out­side a tra­di­tion­al accoun­tan­cy back­ground. How­ev­er, many expe­ri­enced finance pro­fes­sion­als have suc­cess­ful­ly made the tran­si­tion to leader, part­ner, sound­ing board and strate­gist to the chief exec­u­tive, as well as tak­ing own­er­ship of the finan­cials. They have forged diverse careers that have pre­pared and helped them to upskill for the chal­lenges they now face in the top finance role.

When he left pure account­ing in 1993, Richard Snow, CFO of finnCap Group, knew that he need­ed hands-on, day-to-day finan­cial man­age­ment expe­ri­ence. He says: “A year at Lad­brokes at a senior lev­el and two years at Green­berg Trau­rig per­form­ing both CFO and finan­cial con­troller func­tions, along­side a reg­u­lat­ed role, pro­vid­ed the ground­ing for me to move into my cur­rent role.”

He believes that expe­ri­ence in key CFO respon­si­bil­i­ties, for exam­ple oper­at­ing and com­mu­ni­cat­ing with the pub­lic mar­kets, man­ag­ing expec­ta­tions, man­ag­ing key exter­nal advis­ers, and in deliv­er­ing key strate­gic pro­grammes, such as merg­ers and acqui­si­tions, is essen­tial for bring­ing val­ue to the board and sup­port­ing the chief exec­u­tive. 

“The tran­si­tion from small team play­er in invest­ment bank­ing to work­ing across broad teams at Voda­fone and Lad­brokes was vital to me becom­ing effec­tive as a CFO,” says Snow. “We can only be as good as the team we man­age, and learn­ing and dis­cov­er­ing peo­ple skills and diplo­ma­cy were two things I had to learn quick­ly when I moved into indus­try.”

Embracing new technology

In the dig­i­tal age, embrac­ing new tech­nolo­gies, par­tic­u­lar­ly around data ana­lyt­ics, is cru­cial for CFOs in address­ing the evolv­ing needs of the busi­ness and also of their role. Samuel Mon­ti, CFO at Epi­cor Soft­ware, insists that tech­nol­o­gy is crit­i­cal to the ongo­ing evo­lu­tion with­in the office of CFO. 

Mon­ti says: “They need to under­stand how to trans­form the finance and account­ing organ­i­sa­tion from a data per­spec­tive, and this begins with design­ing and build­ing sys­tems that will sup­port effi­cient finan­cial clos­es and data repos­i­to­ries, end­ing with a robust busi­ness intel­li­gence func­tion.” 

Upskilling, he says, can be accel­er­at­ed by engag­ing con­sult­ing prac­tices at the fore­front of this evo­lu­tion, under­stand­ing best-in-class tech­nolo­gies around finan­cial plan­ning and analy­sis, and busi­ness intel­li­gence, as well as intel­li­gent hir­ing of finance and account­ing roles to align with this tech­nol­o­gy shift. 

“How­ev­er, all this is for noth­ing if the finance and account­ing team is not staffed and man­aged to be a strate­gic growth part­ner,” says Mon­ti. “Finance can feed data to the entire organ­i­sa­tion that should result in proac­tive deci­sion-mak­ing.”

Oth­ers see technology’s part in shap­ing the role of the CFO as still some­what lim­it­ed, as the tools avail­able lack the required flex­i­bil­i­ty, par­tic­u­lar­ly when it comes to fore­cast­ing.

Cather­ine Bir­kett, CFO at GoCard­less, says: “It’s still very dif­fi­cult to pre­dict what hap­pens if we lose rev­enue, if we lose it over a longer peri­od, or what hap­pens if the pro­file of our client base changes, or even which of these is the most like­ly. You have to con­sid­er dif­fer­ent pos­si­bil­i­ties and build in enough flex­i­bil­i­ty to be pre­pared for any out­come, and unfor­tu­nate­ly we’ve yet to find a tool that fits the bill, but I remain hope­ful that it will come.”

The impact of remote working

Enforced remote work­ing dur­ing the coro­n­avirus pan­dem­ic has accel­er­at­ed the need for a greater use and under­stand­ing of dig­i­tal-col­lab­o­ra­tion tools to keep busi­ness­es func­tion­ing. The finance func­tion at appli­ances firm SharkN­in­ja has long engaged with ana­lyt­i­cal and mod­el­ling tools, and like many organ­i­sa­tions last year had to embrace vir­tu­al work­ing and the use of com­mu­ni­ca­tions tools such as Microsoft Teams. 

Vice pres­i­dent of com­mer­cial finance Ali­son Rose says: “Sce­nario mod­el­ling is fun­da­men­tal to the way we fore­cast, under­stand chang­ing con­sumer trends, and respond appro­pri­ate­ly. Ana­lyt­ics help us under­stand our per­for­mance and what the medi­um and long-term impacts of these results will be. 

“Busi­ness intel­li­gence tools have helped with our report­ing dash­board and enabled seam­less com­mu­ni­ca­tion of sales data with­in our UK oper­a­tion and our US head office. Being able to col­lab­o­rate in real time while being remote has been a crit­i­cal tool for us and oth­er func­tions across the com­pa­ny.”

Time­ly, accu­rate and rel­e­vant data has nev­er been more impor­tant to the finance func­tion nor to the need for agile busi­ness deci­sion-mak­ing. How­ev­er, as tech­nol­o­gy gen­er­ates ever-increas­ing vol­umes of data, busi­ness­es and investors become hun­gri­er for more. 

By embrac­ing advanced ana­lyt­ics tech­nol­o­gy, CFOs can play a key role in help­ing to inter­pret and turn this data into mean­ing­ful pre­dic­tive insights to main­tain the agili­ty of deci­sion-mak­ing seen dur­ing the pan­dem­ic to iden­ti­fy and grasp oppor­tu­ni­ties faster and ahead of the com­pe­ti­tion.

Andrew Hicks, CFO of soft­ware and ser­vices firm Advanced, says: “As peo­ple who are used to deal­ing with num­bers and data, CFOs, sit­ting at the inter­sec­tion between finan­cial and oper­a­tional infor­ma­tion, are ide­al­ly placed to lead the man­age­ment of this data, which sup­ports bet­ter-informed man­age­ment deci­sions and pro­vides stake­hold­ers with the infor­ma­tion and insight they are demand­ing.”