3 ways CFOs can evolve in today’s financial world

12 April 2021  |   8 minutes read

3 ways CFOs can evolve in today’s financial world

The role of finance leader is changing from technical expert to strategic business partner. Here are three key areas to focus on to make sure you don’t fall behind the curve.

Listen to the full conversation

Kelly Battles, acting CFO at Alpha Medical, is a 20-year veteran of operational finance – and she’s seen first-hand how the expectations regarding finance leaders have changed throughout the years.

Two forces in particular have elevated the role of finance in organisations: the rise of SaaS compliance has forced companies to make sure they’re getting accounting right, and the 2008 crash showed how important financial planning and analysis are in helping businesses navigate tough times.

To keep up, Kelly says CFOs need to go from simply reporting on a company’s past performance to becoming a true business partner who can help drive results for the companies they serve.

She recently joined us on The CFO Playbook, where she shared her insights on the key areas that CFOs need to focus on to keep up with the evolving role of finance.

Here are the three main takeaways from that conversation which you can apply to your role.

1. Always look at the big picture

CFOs of today must look past the numbers to fulfill their roles.

Kelly believes that CFOs need to move beyond simply providing the figures – they need to understand what those numbers mean and how they will influence the company’s future decisions.

For Kelly, this means focusing on the big picture:

‘You’ve got to zoom out and come back to the big picture of this data-driven decision-making. Not just handing over the numbers but actually understanding what the numbers mean for the future.’

How can you do this? Ask yourself what your business’ numbers mean, what you need to be doing differently, how you can improve, and what is performing really well.

Make sure you don’t get bogged down in the details. Instead, use those details to fill out the bigger picture of your organisation’s finances and future plans in order to make the best possible decisions.

2. Find balance in your leadership

To go from simply providing data and analysis to unlocking insight to fuel future growth, Kelly says CFOs need to find the middle ground in the following four areas:

  • Strategic vs operational
    ‘A good CFO needs to be a thinker. Unafraid of complexity, really diving into this business partner role. But also, they need to be a doer. Can you run a process? Can you build a team? Are you practical?’
  • Facing the future vs interpreting the past
    According to Kelly, a bad CFO is focused solely on closing the books and understanding past performance, while a good CFO can balance this with planning for the future. ‘A good CFO typically lives in the future. They’re always looking at what’s around the corner’.
  • Being a customer servant vs being a policeman
    ‘We need to enable business, and not slow it down. But we also have to worry about the compliance and governance of the business. We need to keep people out of jail!’
  • Scalability vs frugality
    ‘We need to make sure that we’re efficient with our resources, but we also don’t want the company to be behind the eight ball. So we need to invest for growth and scale as well’.

The important thing to remember, says Kelly, is balance. Landing on the far end of any of these extremes could steer you in the wrong direction.

She also believes that how you balance these dimensions might change depending on your personality, the environment you’re in, and what is required of you by the company at any point in time.

3. Prioritise building a strong foundation

People, processes, and technology are the building blocks for a successful company. If these elements are solid, then your company will be geared toward success.

Kelly has been in senior financial positions at multiple companies, and every time she steps into a new role, her focus goes to these building blocks.

‘I lay out what are the functions I’m leading, what are the things we need to accomplish over the next year, and what are the elements we need to put in place to accomplish those things – whether it’s people, process or technology’.

If you can get these three things right, says Kelly, then everything else tends to fall into place. But until those foundational elements are well established, you’ll have a tough time reaching your goals.

Don’t fall behind in an ever-changing world

More and more, companies are elevating the role of finance in their businesses, which means they are asking more of their CFOs.

In order to be ready for this financial evolution, you have to look at both the big picture and the tiny details – and you have to meet a lot of people halfway.

Kelly’s tips for CFOs can help you hone your leadership skills and build up both your company and yourself to succeed for years to come. Good luck!

Related posts