The CFO role is often thought of as being largely preoccupied with numbers and data, but in recent times, and indeed in the wake of the COVID-19 pandemic, that role has evolved significantly and as such become increasingly challenging. As we have discussed many times over the last few years, the CFO is no longer simply the mainstay of financial stewardship, control and governance but is a business leader with a true multi-functional remit and an enhanced role in determining and shaping the future of organisations.
This shift is nothing new in itself – it has been a growing trend over a number of years, that has been accelerated by the pandemic and the fact that CFOs have been thrust into every major organisational decision, from business transformation and automation to business analytics and driving operational efficiencies. This is all amidst an increased people focus, made more complex by the shift to home-based working.
As the CFO’s role is evolving, so are the hiring requirements for the direct reports of the CFO and the finance team more broadly. From a technical perspective, recruiting candidates who are digitally savvy and possess strong finance business partnering skills is continuing to be a priority. Equally softer skills such as critical thinking, resilience, flexibility and a continuous improvement mindset look set to be in high demand throughout 2021, as CFOs seek to develop teams that can support them in their new expanded roles.
Since the start of the pandemic, in order to deal with the number of critical issues that have arisen in a short time frame, CFOs have had to pivot to focus on these new priorities whilst simultaneously considering the longer-term view. From the conversations we had with CFOs last year, highlighted below are several key areas CFOs and their businesses will need to consider as we enter 2021.
Business transformation and change
An undeniable fact is that the world has changed and there is no turning back. For organisations to survive and thrive in the current climate, the CFO has to remain in the strategic seat and be an agent for change more than ever. Business transformation and automation are nothing new conceptually, but what has changed is they now need to become a reality - and fast. Fundamental change is uncomfortable for most but standing still is not an option.
Automation
For the CFO to deliver to ever increasing stakeholder expectations and react rapidly to the inevitable market shifts that will arise in the coming year, they must automate wherever and however they can - and at pace. While a majority of organisations had automation underway to varying degrees pre-COVID, many put plans on hold in the midst of the pandemic in 2020. Businesses now need to focus on these projects as a matter of urgency. The automation of transactional processes provides the foundation for the benefits of advanced analytics and artificial intelligence to be maximised and integrated into new ways of working.
Leadership
The CFOs that will thrive in 2021 and beyond will be those that show the greatest leadership at all levels, providing direction underpinned by purpose, integrity and authenticity. In the virtual world, CFOs are learning entirely new techniques for engaging and communicating with their teams at a time when the pressure and risk of disconnection of individuals from their organisations has never been more acute. As the demands on finance teams grow further, by taking on strategic responsibilities and working to extract the benefits of new technology, in addition to BAU tasks, CFOs will have to pay even more attention to their team’s mental health and wellbeing.
Planning for the recovery
Although it’s uncertain when the economy will start to recover from the impact of COVID-19, it is imperative to think about future plans. CFOs are currently in the throes of assessing multiple recovery models to determine which markets and segments could bounce back first. This analysis can help in focusing on investments and developing plans to respond to the recovery. During economic downturns, it is natural to focus on cost-cutting, however, by staying the course on initiatives that support long term growth, CFOs can play a critical role in financing and positioning their companies for recovery.
Building a future-fit finance function
With the CFO spending their time on new priorities, their direct reports, and the entire finance function for that matter, must operate with enhanced levels of responsibility and with greater creativity and business focus. It is no longer enough for finance leaders to oversee a team that assimilates and reports information, but instead, they must develop the capability to identify, analyse, interpret and communicate the most valuable data, in the right language, at the right time. Individuals with responsibility for more transactional tasks will continue to see their roles significantly reduced by automation and will need to be upskilled. Where this isn’t possible, finance professionals with the analytical, planning and business partnering skills required for success will need to be appointed.
Relationships
Intensifying their focus on relationships can help CFOs optimise business performance while minimising organisational disruption and laying a stronger foundation for the health of the enterprise. CFOs who invest in deepening and broadening their relationships both internally and externally will emerge as even more capable leaders as they learn to engage with colleagues for maximum impact.
This point on relationships extends to the CFO community. With ever increasing levels of accountability, the role of CFO can be a lonely one and what has arisen from the pandemic is increased levels of collaboration, knowledge sharing and an ongoing sentiment that we are all in this together. The CFO community is a tight knit one overall and whilst competitiveness amongst peers still exists there was a noticeable increase in the desire to advise, guide and support one another through the challenges that 2020 threw at us. No one has the blueprint for success for the year ahead in what is already likely to be a similarly testing 12 months, so cooperating with those facing similar challenges can only engender a more positive result for all.
If you would like to discuss the points raised in this article, the wider market and/or any people challenges or plans you may have for the future. please do not hesitate to contact Wayne Poulton in confidence via wayne.poulton@normanbroadbent.com or +44(0) 7483 015 592