As the digital revolution has changed how companies operate across the globe, the position of CFO has undergone a massive transformation.
My career in finance is almost into its third decade now, but the first half of it was spent working with a number of CFOs in a variety of very different industries around the world. That gave me a good understanding of what it meant to be a CFO before I moved into the role myself, working for a number of listed and equity-backed businesses.
Although there will be exceptions, in the time I’ve spent as CFO, the landscape has changed almost beyond recognition. Talking to peers since we expanded and opened our office in Singapore, that seems to have been the case particularly across Asia-Pacific. Research from Page Executive in 2014 showed that in APAC, CFOs expected their responsibilities and, it follows, their skill sets to increase in coming years, without changing position within the company.
How the CFO role has evolved
With the evolution of the role in recent years, it’s easy to figure out why CFO is now a position that more and more people are aspiring to. Previously, key responsibilities would be financial reporting, cashflow management, safeguarding of assets, understanding and protecting against risk, interpreting performance, and general financial planning and analysis.
This will always be at the heart of a CFO’s day-to-day work, but when I started out that was pretty much all it involved. Those core tasks are now the minimum that’s expected from a CFO, and getting those things right is an assumption rather than what you are judged on.
As much of those tasks can now be processed digitally, they take up far less of your time than they used to, allowing you to focus on a more holistic view of the organisation you’re working for.
That means more and more of your day will be spent assisting the CEO and other C-Suite positions, rather than simply reporting to them as was previously the case.
The modern CFO will be involved heavily in the organisation’s strategic agenda, and ensuring it is executed correctly. When I first started, there were very few CFOs I worked with who had the amount of operational responsibility that is expected nowadays.
You may find yourself having to take responsibility for merger and acquisition activity, or leading the change management agenda.
You will certainly be expected to bring ideas to the table, and be a member of the board that is trusted to help drive the company forward. The CFO is now a crucial part of C-Suite, involved in critical decision making and planning, rather than simply reporting.
The evolving CFO skill mix
In order to operate on a broader level requires excellent communication skills, particularly when it comes to your ability to develop strong relationships across the entire organisation. You will be expected to collaborate with other board members regularly, spending as much time out of the finance department as you will in it.
For that reason alone, it’s critical that you trust and believe in your financial team, giving you the vital gift of time which can then be re-invested elsewhere into the business. You will always be limited by how many hours you actually have, so surrounding yourself with a great team that can assist you is vital.
It’s also important that they have the tools to carry out their duties properly. It’s no use having fantastic people spending most of their time manually processing things that could easily be done digitally. You need to have the right processes in place for them, so that they can work properly. It’s a critical investment if you want to be able to function effectively as a CFO.
You need to know what motivates your staff as well as your peers, and none of this information is available from a spreadsheet
The willingness to invest and understand your organization
I have found that a willingness to invest is also an important part of your mindset. Whenever an organisation is under-performing, it’s natural to want to cut costs. Although it sometimes seems counter-intuitive to implement costly changes, it can absolutely be the right thing for the business in the long term.
The key to getting this right is to understand the organisation from top to bottom—that has been my advice to anyone who asked about it over the years. Don’t come into your position determined to make changes from the off.
Instead, take time to thoroughly familiarize yourself with how the organisation ticks and really get under the hood of it. This isn’t just a case of figuring out who does what, it’s getting to grips with the markets you operate in, the biggest challenges as well as opportunities, as well as the culture within your company.
You need to know what motivates your staff as well as your peers, and none of this information is available from a spreadsheet. It’s a big investment in your time but absolutely critical if you want to get it right.
Imagine replacing a car battery. You may know how to change it, which order to disconnect and reconnect the terminals. But do you know how everything under the bonnet works? Just because you understand one part of what makes the car work, doesn’t mean you can suddenly remove the engine.
The same is true with any organisation; while it may ultimately be about producing monetary results, the financials are only a part of what keeps any organisation motoring along.
This is a wonderful time to be involved in financial operations, especially as a CFO. While the role itself has evolved dramatically, it has enabled new talent around the world to step up and meet the challenge head on. The CFO is now a valued member of the C-Suite, whose opinion is relied upon as part of any strategic planning.
Pretty much every successful business today will have people behind it making the right judgement calls. The CFO today is a key player behind that decision-making process.
A modern CFO will be a lot more involved at boardroom level than when I first started out working for the Big Four, making it a very exciting and in demand board position. It’s therefore essential that you are willing to adapt and learn, to ensure that you’re at the heart of your business, helping to drive it forward.
About the author
Lewis Miller is the CFO of Frank Recruitment Group