In the past, the role of chief financial officer was strictly a senior accountant tasked with crunching numbers. In today’s dynamic business world, the role of the CFO has evolved to into a strategic business partner.
In fact, a survey found that 28 percent of participants said their CFO was focusing less on the financial department by taking on a more strategic position.
The role of the chief financial officer has always been instrumental to the success of a business, but as the position evolves to take on even more responsibility, finding the right CFO is more crucial than ever.
Whereas the CFO used to be a simple bean counter, the position now has three main roles to play within the business. The first is the traditional role of financial management. The CFO must monitor the financial status of the business and offer insight into the company’s bottom line. However, since the CFO is becoming more strategic, a new responsibility of the position is also to analyze the financial and business data to create a strategic plan for developing the business.
Another new task assigned to the CFO is navigating economy and technology advancements. A large number of financial functions are becoming digitized thanks to new tech programs and advancing software. The CFO has to adapt to new digital trends not only within the financial department but also throughout the business to stay relevant within the industry.
The CFO has the unique opportunity to view the business from a comprehensive financial perspective. The CFO has a deeper understanding of how various products and services impact the business’s bottom line as well as the risk associated with business decisions. The insight the right CFO can provide to a business is invaluable. When looking for a business partner CFO, however, there are a few specific qualities you should target.
The evolving CFO role requires the position to play a more collaborative part with the CEO and other key business players. Strategic thinking is often a key skill needed to successfully navigate collaboration with the CEO and other C-suite players. The CFO must understand sound business principles as well as how to persuasively present them to other team members.
Regular interaction with various executive partners also makes communication a key component of collaboration. Effectively conveying the risks and rewards of potential business decisions as well as maintaining a healthy relationship with the CEO requires top-notch communication skills.
Balancing independence and collaboration is not an easy task. As the CFO starts to work more closely with the CEO, it’s important for the CFO to stay objective when assessing strategic business decisions. It’s the CFO’s job to assess risks, review studies, and troubleshoot issues related to new business plans. However, it’s important for the position not to become too risk-averse or be swayed too much by the opinion of the CEO and other C-suite leaders. The CFO has to work closely with the CEO while staying objective when analyzing strategies and not allowing the desires of the board to influence the overall analysis and findings of a report.
As already mentioned, the financial world is ever evolving thanks to technological advancements. A strategic CFO will not only welcome new tech changes but will actively research and promote various programs to improve business efficiency. Therefore, a CFO in today’s business world needs to be tech savvy to manage financial trends and stay relevant.
Finding the right business partner CFO also comes down to how the CEO and CFO get along. These two roles will be working side-by-side to advance the business, so it’s imperative they work well together. That being said, you don’t need someone who is a copy of the CEO. Instead, you should aim to find a CFO that compliments the CEO position. Look for someone with the qualifications and background that fill in the CEO skill gaps. The CFO should be someone who challenges the CEO with a different perspective and angles on the business. These two key players need to get along, but also not be so similar that their ideas are all the same.
An outstanding CFO will not only become the CEO’s right-hand man but will also advance the overall business strategy of the company. It’s time to stop viewing the CFO as a simple bean counter and recognize the role for the business potential it offers.
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