If you were to guess the CFO’s most important area of expertise, what would you say? Once, it would have been numbers, and CFOs were financially minded first and foremost.
But as businesses change, so too do the roles of every member of the c-suite, and the CFO is no exception. In fact, in a recent survey of CEOs globally, we found that the CFO is indeed exceptional, because compared with any other executive in the organization, the CEO expected the CFO role to change the most. High expectations, indeed, and unfortunately one in three CEOs say their CFOs aren’t up to the challenge.
How, then, can we equip our financial leaders to not only accept that challenge, but exceed them?
In short, tomorrow’s CFOs need to become Renaissance CFOs.
The Renaissance CFOs need to manage capital, of course, but they also need to be versed in strategy, in analytics, in operations and in talent management. In short, they need to help drive business change. It’s a daunting task, but it isn’t out of reach.
Driving business change may seem like an unfathomable thought for a CFO, but the best piece of advice is to start in your own backyard. Beyond managing numbers and the relationship with the markets, a Renaissance CFO should be able to look at the finance and accounting organization and make sure it’s streamlined. The good news is that many CFOs are already equipped to do it.
Today, CFOs have unparalleled access to data. They report to regulatory bodies and do management reporting for the entire organization. With all of that information being pulled through the finance department, a deep analysis could provide immense business insights and value.
It’s important, though, that the data is analyzed appropriately. Part of the reason CEOs are expecting more is that technology has made many of the reporting functions easier, freeing up time for analysis and business insights. While once management reporting was 80 percent gathering information and 20 percent analyzing it, automation means that ratio can be flipped, putting more of a focus on understanding the data instead of just reporting it.
A positive understanding of data can lead to better business knowledge, including better thinking about product profitability, for example, or insights on the management of operations. And that business knowledge is what inevitably drives transformation.
Talent management, on the other hand, is an integral skill to make it happen. Driving change means leadership, and that means hiring the right high-caliber leaders. As in any organization, Renaissance CFOs are only as good as the people supporting them, so they can in turn, support the CEO’s vision.
So to answer the question: who is the Renaissance CFO?
In the minds of CEOs, that trusted advisor must have intellectual curiosity, must have leadership skills, must not be overly conservative about disruptive technology, and must aggressively seek out the business insights to help make necessary changes that drive the business forward.
Above all else, that means the most effective quality in a Renaissance CFO is adaptability.