The role of a CFO or high-level finance leader has evolved and taken on critical and strategic characteristics over time. Much of the evolution has stemmed from the massive digital transformation over the past quarter century, with major events paving the way. From the lasting impacts of 9/11 to the 2008 recession to the global pandemic of 2020, economic uncertainty has been par for the course. Yet, the technological enhancements that emerged have driven businesses to become more complex—and the reality for many finance professionals has shifted along the way.
So, what should today’s CFO focus on now and in the immediate future to drive a successful accounting/finance function and business overall?
Demonstrating the ability to lead cross-functionally and effectively communicate, coupled with a big-picture mindset, is a great place to start. Beyond the technical skills needed to be a finance leader, the modern CFO must be sound in data analytics, able to scale, seek innovation and deliver in a digital capacity.
A recent article by CFO.com suggests that the modern CFO should prioritize three focus areas to thrive during changing times and economic uncertainty. We discuss our thoughts on the 3 Areas of Focus for the Modern CFO below.
- Attain a realistic level of demand. Most CFOs can create budgets and forecasts in their sleep. Still, when the market is volatile and unpredictable, it forces the finance leader to make assumptions based on data, trends and other analyses. What are the levels of supply and demand for the business? What areas can be expanded or retracted? When the landscape is changing rapidly, staying close to what the market is commanding is crucial. You must work closely with other units to strategize and integrate clear information that can be analyzed with actionable next steps.
- Consider all lines of the business. Leadership is at its best when it can understand and relate to all areas and levels of a business. If that requires rolling up their sleeves and working their way through each function’s basics (spreadsheets should not evade you!), then that’s what they should do. Being bidirectional and understanding the business from the ground up (and not just top-down) will help leaders and give them better insight into making sound business and financial decisions.
- Understand the good, bad and ugly. As market conditions change like the direction of the wind, the CFO or finance leader must make recommendations that are backed by clarity in the business’ operations. They should ask for unfiltered and candid feedback to feel confident that they are suggesting business spends or savings from a position of knowledge – and not just hunch. It’s up to the modern CFO to counsel the CEO and other C-suite-level professionals to move the business forward.
Have anything to add? Do you agree with the areas the CFO should prioritize? Did we leave any out? Share your thoughts in the comments below.
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