“I’m going to talk to you about how the role of the CFO is changing and how CFOs interact with their business counterparts across the board,” stated Head at the outset of his thought leadership presentation at the 2018 Financial Leadership Forum held on May 3 in Atlanta.
“Finance has moved from counting to considering possibilities,” noted Head. He provided a quote from a December 2016 McKinsey Survey: “As their role expands to include more non-financial demands, CFOs know they must build new skills to lead.”
“How do we get more engaged and more on the front lines of the organization and be a strategic thinker? It’s about bringing in new skill sets, new perspectives, new expectations, and new responsibilities. CFOs have moved from basically reporting on the past to strategic decision-making, leveraging technology to automate and accelerate, aligning strategy across the organization to focus on growth, and being the right hand to the CEO.”
“CFOs have moved from basically reporting on the past to strategic decision-making, leveraging technology to automate and accelerate, aligning strategy across the organization to focus on growth, and being the right hand to the CEO.”
The factors driving this evolution include:
Head then shared the 2018 priorities of the CFO as outlined on CFO.com:
“CFOs have been the champions of data for 30 years, so finance is the organization best suited to lead the effort driving the culture around data.”
A good relationship between the CFO and the CIO is critical to delivering on these priorities. “The CIO role has changed, too,” said Head. “It used to be all about executing and managing costs. Now the CIO is responsible for preparing for new IT technologies, exploiting data, driving revenues, demolishing walls to achieve scale, and supporting growth. You’ll notice the top priorities of the CFO and CIO are well aligned, so a good relationship between the two is essential for the company to deliver to the marketplace and thrive.”
“The top priorities of the CFO and CIO are well aligned, so a good relationship between the two is essential for the company to deliver to the marketplace and thrive.”
Head then outlined a method for determining the nature of the CFO-CIO relationship. “First, where are you on the continuum of the CFO category—a reporter of historical fact, a finance leader (more agile and delivering on the needs of the organization), or a business leader (involved in strategic discussion to integrate financial and operational performance)? Where is the CIO on the CIO continuum—a laggard (‘old school’), an IT professional (following the process and pragmatic), or a visionary (bringing in cloud, IOT, etc.)?” he asked.
“If the CFO and CIO are in the same place on their respective continuums (e.g., business partner and visionary), that’s the ‘ideal state.’ You can radically move your organization,” said Head. “If you’re polar opposites (e.g., a reporter of facts and a visionary), this is the ‘high-conflict zone.’ The third possibility is both the CFO and CIO are midway along their continuums, which is ‘the comfort zone.’ Nobody’s pushing the envelope or driving change in the organization.” The last option is the push-pull, where the alignment is erratic but there’s still movement.