– By Marc Mathenz
A Chief Financial Officer (CFO) is no more just a number cruncher, or a bean counter as referenced back in the days. Modern CFO is breaking all stereotypes and has evolved into a prized asset for any organisation looking to excel in the 21st century.
Here’s how the role of a CFO has undergone a seismic shift in recent years:
Top strategist
The modern CFO has moved beyond being just a financials champion to emerging as a top strategist for an organisation. Be it navigating a tight financial ship due to a black swan event like the COVID-19 pandemic and the aftermath of a plummeting global economy or demonstrating farsightedness by keeping a pulse on emerging trends and determining the most financially viable path to a profitable future. A CFO dons many hats today. A CFO’s role is intertwined with many departments, and the financial astuteness of a CFO becomes a guiding light for various departments in an organisation to emerge as lean, mean, and efficient.
The CEO’s confidant
A capable communicator who partners the CEO in building the narrative in support of the organisation in front of potential investors. Having said that, a good CFO will support the CEO in public but will not hesitate to challenge the CEO in private should a need arise. Most CEOs today understand the importance of this relationship and view CFOs as their business confidant and lean on them for key strategic advice.
Architect of business resilience
CFOs of today need to factor in geographical constraints, economic variables, regulatory environment, and plan for contingencies to build a resilient organisation. They are the key input givers to the Board of an organisation and need to be on their toes to ensure business sustenance. No wonder many CFOs have made great CEOs and no better example than the former PepsiCo CEO Indra Nooyi who transitioned from a CFO role to being the company’s successful CEO. Risk monitoring is another key vertical that rests within the ambit of a CFO. Risk mitigation by being proactive and transformative keeping an eye on the future is always preferred as opposed to being reactionary to present-day events.
Driver of agility
The new normal demands agility on the part of the C-level and a CFO’s role is no different. The decisions a CFO takes today by weighing in current risks and balancing them with future growth possibilities will determine the growth trajectory of an organisation. CFOs need to have a laser focus on the fast-changing market conditions, turbulence in the global economy, changing consumer sentiments, innovation-led disruptions happening in the market and exhibit agility in responding to them with sound financial planning.
Closing thoughts
The role of a CFO has assumed significant importance in today’s volatile economic environment. CFOs will have to continue to be nimble footed in anticipating the headwinds and respond with agility to the changing world around them. In addition, they will have to shun traditional mindsets and embrace digital tools in a major way. Digital transformation is fundamental to any organisation’s growth and as finance leaders we will have to be the catalyst for digital transformation initiatives across the organisation.
(Marc Mathenz is the Chief Financial Officer at Pine Labs)