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Used to be that chief financial officers (CFOs) mostly handled internal controls and compliance. But those days are in the rearview, folks. While financial discipline remains central, today’s CFOs take on way more responsibilities than their predecessors. They play important roles in developing strategy, fostering innovation, and driving growth.
CFOs also face challenges their predecessors never encountered, such as labor shortages, social and environmental concerns, ransomware attacks, increased regulation, and global competition. Yep…it’s a lot.
So, how do successful CFOs navigate *gestures widely* everything? Oracle NetSuite designed this business guide to showcase the habits effective CFOs build to meet the demands and high expectations of their ever-evolving role.
1. Keep your eyes on the long-term prize.
Originally, CFOs were primarily responsible for maintaining accurate financial records and ensuring compliance with accounting rules and regulations. As a result, they weren’t always privy to day-to-day operations, and their views of their business were confined to the data relevant to financial statements.
Fast-forward to today, and a CFO’s job is much broader—sometimes including oversight of HR and, increasingly, IT—as they make effective use of existing data. CFOs now play a pivotal role in developing and implementing corporate strategy, and these new responsibilities require a forward view that anticipates the needs of their companies.
Plus, as a trusted adviser to both CEOs and boards of directors, today’s CFOs should consistently scan the horizon for emerging trends, political shifts, and competitive changes that may affect the business. It’s often their job to prep their organization to respond effectively to market threats or pending legislation.
So, how does a CFO stay steady amid all this? By not being tempted to improve short-term financial results at the expense of long-term growth initiatives.
2. Be worthy of trust.
The turmoil of the pandemic put CFOs directly in the spotlight, as stakeholders looked to them for clear signs that their companies could weather the storm and return to growth.
As a key spokesperson for the business, the CFO is just as responsible as the CEO for managing expectations—maybe even more so.
Effective CFOs understand that to succeed, they must be completely transparent when discussing financial results with board members, investors, and other stakeholders, avoiding the temptation to overemphasize positives or gloss over negatives. They also need to ensure full compliance with government regulations and accounting rules.
The CFO is their business’s moral compass, and where they point is indicative of their team’s future.
3. Teamwork makes the dream work.
Successful CFOs don’t just look for people with the right skills and experience; they prioritize intangible qualities like passion and work ethic. Demand for finance and accounting talent always seems to outpace supply, so it’s critical to keep good people and help them grow.
On top of having a solid working relationship with the CEO, a CFO should also connect with fellow C-suite executives, direct reports, and even board members. Without a team that trusts you, nothing significant can be accomplished.
That’s why effective CFOs don’t limit their interactions and communications to the people they work with every day. They make it a point to engage with all levels of their ecosystem—even customers and community leaders. They understand that building a strong internal network gives them insights into company performance that they won’t get from any ol’ data spreadsheet.
4. Don’t be a “CFNo.”
CFOs see it as their job to protect their company’s financial health. But as you identify risks, don’t forget to shine a light on opportunities.
Balance is key, so when deciding on new initiatives or uncovering risky areas, successful CFOs build logically sound arguments backed up by solid data.
The most effective CFOs balance their focus between long-term growth and financial controls so they can evaluate opportunities on the basis of potential revenue as well as costs.
5. Let the data drive you.
Reliable data equips the modern CFO to perform the kind of cost-benefit analysis required to make smart investments, including acquisitions. It also helps neutralize—or at least make visible—any bias that could impact both C-level and line-of-business decisions.
In short: CFOs must have solid, dependable data at their disposal.
Highly effective CFOs make data and analytics a priority for themselves and their teams. They also prioritize new skill sets, like data science and designing analysis procedures, to enhance traditional accounting roles.
Oftentimes, CFOs advocate for and adopt digital platforms such as enterprise resource planning (ERP) and customer relationship management (CRM) systems, which provide real-time, business-wide data and also optimize data flow.
“Long, linear paper presentations are designed to keep things opaque,” observed one savvy CFO. “Digital sets the truth free.”
Time to grow like a pro
In an era of constant transformation, today’s effective CFO succeeds not just because they embrace innovation, but also because they channel innovation into achieving their organization’s financial and business goals.
When equipped with the right data and technology platforms, CFOs can expertly navigate future risks with foresight that few other C-suite members possess, and leverage their role to lead their business forward—not hold it back.