Much has been written about the need for chief financial officers (CFOs) to be strategists rather than just assuming the traditional role in this technology driven business world and a globalization that is ever-spreading as the years go by. It is not that they do not want to be strategists because most CFOs I am sure would like to grow as business partners. However to achieve this, they need to more than just “ bean counters or the experts on tax compliance and regulations.”
The need for the transformation of the CFO in this generation is more apparent now than ever. They were trained to be the champion of fiscal concerns, overseers and implementers of compliance and regulatory requirements, controllers of budget and financial reporting, etc. Now more than ever they are expected to assume several roles such as chief strategic engineer, chief technology evangelizer, chief business operations partner, chief “bean counter.” The expectations could be overwhelming but can be taken also as great opportunities for a CFO to be groomed to assume the next top position which is the Chief Executive Officer (CEO).
In most succession planning, the CFO technically is usually being trained to take over the role of a CEO in case of emergency, due to retirement or even just a temporary leave of the CFO. In a recent survey of 178 executives by Forbes Insights and KPMG, it showed that CEOs want more of a macro, strategic thinker from their CFOs. They need their CFOs to contribute their knowledge about finance on how to spur on growth in the companies. People skills are also important for CFOs and should sharpen their skills more in managing their team since 80% of CEOs in the survey consider talent management as very important.
However, in the same survey 32% of the CEOs feel their CFOs do not seem to meet their expectations to help them handle the challenges that they face in running their business. In fairness to the CFOs, they prefer more to handle the strategic side. However, with the stringent regulatory requirements and new ones mushrooming in our economic and financial environment, the CFOs are usually tied to their traditional role. Once in their desks, technical and operational aspects keep them there. They need to keep past these roadblocks and untangle themselves with the day to day demands in their department so they could be able to have a company-wide view on how they can help their company grow.
In an article in CFO Journal by Dr. Ajit Kambil, he wrote about certain questions that a CFO can ask to determine if they are not only strategic CFO but pragmatic strategists. Questions about the directions your business is going and its present status and competitive edge, what is holding back its growth, what areas have the biggest spend and if it is bringing the expected returns, how to overcome any factor that is holding back your company’s growth, etc. A CFO can formulate questions specific to his company that help him identify opportunities and train his thinking towards a strategic mind-set.
But first he has to address the problem of what is holding him back to be a strategist in the company. He can do several things including learning how to delegate tasks that is using up most of his time but which he can pass on to a person he can trust. He should be updated with the regulatory requirements but assign somebody to make sure these are properly implemented. He should learn to maximize the use of technology to make his work more efficient and not get mired behind his desk and prevent him from seeing the whole picture. The CFO should be serious in assuming a strategic role if he wants to be seen as a business partner and in some ways meet the expectation of his CEO.
CFOs also need the support of their bosses or the CEOs and other departments to implement his strategic plans. He can maximize the financial information in his fingertips to push for new products or dropping a customer who is not contributing to the profit or business centers which are not bringing in the expected returns. The CFO can assist the CEO in the latter’s vision for the company and how to achieve it through the necessary financial data available. He can be strategic in so many ways but first he has to prioritize which areas he can be most useful for. He cannot be a specialist in everything but he can view it all from the top and see where the biggest opportunity he can be of most help to make his company grow.
CFOs should remember, it is not just about strategic thinking, but more important putting their ideas and thoughts to actual work and implementation.
(Wilma Miranda is the Managing Partner of Inventor, Miranda & Associates, CPAs, Member Board of Directors of KPS Outsourcing, Inc. and Treasurer, Negros Outsourcing Services, Inc. The opinions expressed herein are the views of the writer and do not necessarily reflect the views and opinions of these institutions)