CFO as a strategic leader
CFO as a strategic leader
CFOs can play a crucial role in driving corporate strategy alongside their CEOs.
Companies around the world are facing a volatile, uncertain, complex and ambiguous (VUCA) environment.
While digital technologies can be enablers and liberators, their effectiveness should be assessed in the context of other environmental risks. These include economic and geopolitical volatility, which is on the rise.
In such times of deep and systemic change, CFOs can play a crucial role in driving corporate strategy alongside their CEOs. This was a finding revealed in a KPMG study, The View from the Top, where CEOs expect their CFOs to be more strategic in the way that they conduct business, and to be more thoughtful about the possibilities arising from this change.
CFOs also told us that they are constantly challenged to provide more strategic guidance. They are often pressured to drive cost efficiencies while identifying new business opportunities, and ensure that plans are aligned and executed in accordance to business strategy.
And yet, many CFOs remain mired in traditional finance tasks. It is no surprise then that close to a third of the global CEOs surveyed did not think that their CFOs understood or assisted them enough with the challenges of running their organizations.
Asking the right questions
Being a strategic leader is about asking the right questions.
What is our company’s growth strategy? Are our goals realistic? What are the potential risks? Who are the potential disruptors in our industry and can they disrupt our inherent business models?
CFOs typically have the visibility into all organizational data and can identify data correlations and operational drivers. They also have the best understanding of the financial impact of any corporate decisions or macro-economic changes.
With such a holistic view, CFOs are effectively positioned to weigh in on enterprise-wide strategic decisions. They can help to galvanize the organization to move in a way that fundamentally creates a new
trajectory for strategy.
Being influential at board level
Companies are sometimes caught in the age-old knowing-doing gap. They are aware that changes are on hand, but are not transforming their organizations fast enough.
CFOs can help engage the board more productively on strategy. The hard
data and empirical mentality that the CFO brings to the table can be instrumental
in setting and effecting the company’s game plan, especially when it comes to emerging trends.
CFOs are also increasingly crucial conduits at investors’ meetings, providing information about company performance to external stakeholders. Historically, that has been the chief executive’s job. By interacting with investors, analysts and potential investors in meetings, CFOs have the opportunity to shape perceptions of the company and help drive value.
Leverage technology for transformation
In The View from the Top report, CEOs were adamant that leveraging technology, such as cloud-enabled ERP systems,should be the main focus of CFOs in the future. By doing so, CFOs can effectively spend less time on mundane tasks such as processing transactions and instead dedicate more time to analysis and strategy.
CFOs and their finance teams will need to reassess the way they work and the technology they use, and drive the transformation of their finance systems to deliver the capabilities and tools they need.
At our recent ACCA-KPMG CFO roundtable, Fabiano Siufi, CFO of Microsoft Singapore, made this observation: “We are the CEO’s trusted advisors, and we do these three things: we explain the past, we optimize the present and hopefully, we shape the future of the organization.”
In a changing business world, CFOs have to think beyond numbers. By taking greater responsibility for the company’s performance and direction, they can truly become the trusted advisors to CEOs.
This is part of the ACCA Singapore’s Smart Finance series with KPMG, which will share topics to equip Digital CFOs and help them adapt to changes brought about by the impact of digital disruption.