5 Steps to Becoming the CFO of the Future

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WorkdayA single system for finance, HR, and planning.

Wednesday, October 7, 2020

The role of the CFO is changing. These are uncertain times, and organizations can ill-afford to carry passengers at an executive level. As a result, companies are searching for leaders with broader skillsets, and that means CFOs need to bring more than traditional accounting skills or financial acumen.

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5 Steps to Becoming the CFO of the Future

The CFO of the future must become a vital business partner to the Chief Executive Officer, influencing their organization’s growth and innovation, as well as ensuring its financial integrity. Here are some core strategic and leadership competencies that will enable you to enhance your value as an executive and futureproof yourself against the fluctuations of life in the C-suite.

1. Take the lead on data

While data has been important to a number of industries for a long time, the concept of a holistically digital organization is still a new one for many. Naturally, financial departments have been crunching the numbers longer than most. Nevertheless, the CFO of the future will need to take charge of new opportunities offered by data analytics, machine learning and AI to generate value across the organization.

McKinsey notes that, while CFOs are generally removed from the center of digital transformation efforts, they want to take on more. The same study also indicates that traditional finance activities still take up much of a CFO’s time because many are unsure where to start with taking the lead on data.

A good place to start is by using the rich insights of data collection to identify underserved areas within your organization, areas where you can unearth hidden growth opportunities. This can extend beyond strategic decisions to daily business operations: there could be potential to optimize inventory use, or allocate marketing spend more effectively. Savvy use of data can identify these prospects and bringing them to the attention of your CEO will demonstrate your ability to drive growth across the organization.

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2. Know your organization

How will you recognize those underserved departments if you don’t know your organization?

The successful CFO of the future must be actively engaged with the array of evolving business needs on the agenda. That includes maintaining a deep knowledge of where each department is and where it needs or wants to be.

This requires the ongoing ability to communicate effectively, which should already be in your arsenal as a CFO. Having built this ‘big picture’ knowledge and using data visualization to contextualize it, you can challenge decisions you believe might be taking your organization down the wrong path, offering confident, informed alternatives.

On the other hand, an intimate awareness of different departmental needs will enable you to advocate for policies that will most successfully drive growth or inspire innovation. As a great leader, you must be unafraid to take risks and become a catalyst for innovation, while remaining a composed and rational voice in the C-suite. Knowing your organization will empower you to find that balance.

3. Stakeholder engagement

An Odgers Berndtson study found that, until recently, CFOs had little experience in facing key external audiences, such as investors or the media.

The ability to relate to a diverse group of stakeholders and effectively communicate the organizational agenda is crucial for the CFO of the future, as the role continues to expand.

As a result, for future financial leaders to succeed, a thoughtful and deliberate learning approach is crucial. You don’t want to be thrown in at the deep end without the appropriate political or negotiating skills, so look to hone these competencies wherever you can on your journey to becoming a CFO. If you’re already there, request exposure to these external stakeholders, pressing the key issues and initiatives you want to highlight so you can develop these engagement skills on a gradual basis.

4. Leadership and business acumen

The traditional purview of financial leaders is no longer enough for future success. CFOs must become more than the savvy financial leaders of yesteryear, taking on the additional mantle of business leadership to ensure longevity in their roles.

Take advantage of employer-sponsored business courses or leadership development programs to show a willingness to develop these skills. If you can bring these to the role as a new recruit, even better. Join industry organizations and networks to learn from and build relationships with your peers.

Most importantly, successful future finance leaders must be embedded within the decision-making process of their organization so push for this early on, presenting the business case for it (i.e. the ability to influence growth and profitability across the business).

In order to meet the changing expectations for CFOs, you need to show a willingness to integrate with the people running the business, so work with the decision-makers and develop your own skills in this area to futureproof yourself against changing expectations.

5. Digital transformation

This term remains crucial to organizational success in the future. Transformation is already a ubiquitous part of the CFOs role, as indicated by further research from McKinsey identifying finance leaders as the second most common initiators of change (after CEOs).

In the wake of the COVID-19 pandemic, the urgency of digital transformation has accelerated.  Organizations will increasingly need to meet customers where they are and add remote working capabilities, as well as increase their resilience to future fluctuations.

CFOs can earn the trust of their bosses and employees by driving this transformation and presenting the economic value inherent in keeping step with social and market changes.

Moving forward, it will no longer be enough for CFOs to manage the financial side of things alone. The CFO of the future must broaden their purview, demonstrate strategic and operational competency and drive innovation across the board. By harnessing the power of data and committing to continual professional development, you can stand out as an exceptional financial leader and empower your organization to navigate the future landscape with success.

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