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As the proverbial saying goes, it takes money to make money. From the dawn of trade, businesses have been considering their finances for purposes that range from surviving in bad times to reinforcing success during the good ones.
Finance affects the ability to employ staff, purchase goods, acquire licenses, expanding or develop business. The world of business needs a book for recording crisis into context, to make sense of the wreckage & to identify what to do next. If money is the lifeblood of businesses, finance is the nerve center. And who heads the finance of a company, Chief Financial Officer (CFO).
The original three shot-callers of companies were CEO, COO, & CFO before there was a C acronym for every executive position in the company. The role of the CFO is rapidly undergoing a serious transformation in today’s world. They are no longer backroom figures for bookkeeping & overseeing tax reporting but a multi-faceted role, an aspiration for many & a well-rounded job for those who reach it.
Traditionally, the role of a CFO was just to analyze a company’s financial risk, manage financial planning & keep all records clean & compliant. The role of the CFO didn’t exist only for the major part of the 20th century. The then “Financial Managers” were primarily responsible for managing finance & never played a major role in other businesses.
This was primarily due to the lack of instantaneous data that we are accustomed to today. But the tide started changing during the 1970s as the Securities & Exchange Commission (SEC) and Federal Accounting Standard Board (FASB) issued statements & releases which required corporates to use new accounting methods for reporting assets.
To deal with the legal ambiguity of these new requirements majority of companies followed suit and began promoting their financial managers to their C-Suite team while certain finance professionals took up the mantle of CFO & began publicly promoting themselves as the answer to new reporting challenges. Later on, CFO became an indispensable term in the corporate world as they became crucial in identifying the weakest performing business units to help them grow & improve.
The concept of the CFO model became more favored in managing the relationship with shareholders & for many years after the majority of the regulatory changes of the CFOs included a specific section in annual reports which were solely meant to explain the future implications of the change to shareholders & investors.
In the present century, where numbers are not in short supply (thanks to big data), the role of the CFO is a destination in its own right. The sway of CFOs was recognized when they showed their ability to make key decisions about how a business should navigate during a crisis as our economy took a downturn a few years back.
Instead of just managing risk they analyzed data for actionable insights, drove strategy around regarding monitoring existing investments & making new ones, and inspired their teammates.
Today’s CFOs have become the right-hand executives, strategy advisors & operators for CEOs.
All the Game of Thrones fans out there will remember Daenerys Targaryen appointing Tyrion Lannister as the official Hand of the Queen during the end of season 6. As per the “A Song of Ice and Fire,” the Hand is the crowned head’s closet advisor, a senior position of government & authority in the seven kingdoms. In today’s corporate empires, CFOs have turned out to be the CEO’s confidant & enthusiastic champions. The CFO is responsible for everything from financial performance to strategy.
A CEO should make sure that the individual appointed as the CFO is trustworthy & someone with whom everything from strategic ideas to personal-professional struggles can be shared. Additionally, the CFO should live & breathe to put the CEO’s corporate vision into action. The individual should have EQ as strong as IQ to understand the culture, brand & strategy to aid the organization reach its full potential.
Today’s CFOs are the senior executive team on-staff advisor. To play this role a CFO should be a business executive first & a finance executive later. The individual should have a strong & in-depth understanding of the market opportunity, strategy & business model of the organization.
The contemporary CFO of today provides insights & puts them to action. They understand how to build scalable systems & processes. To excel the CFO should not only develop KPIs & understand performance trends but also implement strategies to improve them.
Since the historical performance has been taken over by trend recognition, forecasting & key performance indicators and business & operating plans of the future, CFOs should understand that the key drivers of business are often significantly more than what shows up on the balance sheet.
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The role of the CFO is expected to evolve further as per the CFO.com article by Deloitte COO and CFO Frank Friedman. One of the biggest factors that will contribute to the CFO’s significant change over the years will be the rise in technology. In the coming years, we will be seeing CFOs increasingly using digital technology & innovative business tools regardless of the industry.
CFOs are said to use predictive analysis to forecast results & produce revenue predictions based on customer experience profiles & current demand instead of comparing to previous years. Social media & crowdsourcing which was alien to the Finance world will be used to accelerate the processes.
The future CFOs should be tech-savvy in order to capitalize on technical innovations, data-driven to execute company strategy & operations decisions, proficient at closely working with regulators & compliance systems as regulations as becoming more stringent globally, and expert in monitoring & managing risks, both geopolitically & technologically.
71% of CFOs will increasingly be responsible for the ethics of decision making in support of their organization’s purpose – Ernst and Young CFO Survey. We are of the opinion that marketers with products or services that would assist CFOs to carry out their role more efficiently should contact them directly. It’s better to avail the help of professionals who are in the field of providing CFO Email List.
The role of a CFO is complicated from finance to ethics. The individual should first focus on the evolution of his or her own role before pushing the organization forward, to avoid errors. The modern CFO has come a long way from the boring & predictable role they played in the last century. The DNA of the CFOs is & should be mutated to become Leaders with voice & Jack-of-all-Trades.
Also check out our blog on: HOW TECHNOGRAPHICS ARE REDESIGNING THE WAY WE PROSPECT
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