Pioneering CFOs turn endemic uncertainty into opportunity
I spent a decade and a half working in the world of finance – in private equity and venture capital investing, management consulting and corporate finance. From a wide-eyed associate consultant during the Great Recession to a CFO on the final waves of the post-recession boom in 2019, I thought I had seen most aspects of what markets can offer finance teams. But none of these diverse experiences prepared me for a pandemic that would reshape our world and drastically disrupt the operation of nearly every business. But what my experience across boards and leadership teams has prepared me for is having the resilience to take a punch, regroup, reevaluate, and bounce back quickly. And now, as we face inflation, highly volatile markets and potential economic headwinds, it’s clear that CFOs who take a creative and agile approach to running their businesses will continue to fare better. come out than those who take the more classic, slightly deliberate and conservative approach of even the most “modern” CFOs.
When uncertainty reigns, forward-thinking CFOs thrive
Global conflict, inflation, supply chain shortages, tight labor markets – these types of disruptions have been happening for decades. But history has taught us that turbulent times force teams to come together in a hurry and let the brightest among us shine. It is when we are challenged in these crucibles that innovation, new insights and a strong reliance on innovative uses of data separate those who are just surviving from those who can thrive and move forward once headwinds shift – or better yet, steal shares while your competitors are on the back foot.
Yet when I speak with other finance and accounting managers, everyone is overwhelmed, just trying to keep up with day-to-day deliverables and compliance, without devoting the time and resources to push the boundaries. This is the exact opposite of what it takes to be well positioned in a volatile and uncertain moment. I propose that if you rely on manual finance operations and teams sticking to outdated ways of thinking and executing, you are well positioned for one thing: to be left behind.
I’m aware that my aggressive proposition isn’t earth-shattering – you’ve heard this perspective in other articles and conference sessions – but I hope my cheeky phrasing will invite a discussion of what a CFO and his teams can do to adapt to win in this cycle. In lieu of a TED talk, I’ll offer a short list that I hope will spark interesting and actionable conversations with your teams.
1. Digital transformation to drive decision-making is critical to CFO success.
The Office of the Chief Financial Officer has been using spreadsheets and email for 40 years. Yet for sales, marketing, and most other teams in the organization, process automation, data analytics, access to real-time insights, and other innovations have fundamentally changed how they operate. , their speed of action and the precision of their decisions.
The digital transformation of finance and accounting has created seismic change for CFOs bold enough to embrace it. This change gives them more time to analyze more data and make better decisions with more confidence and speed. If that’s not enough, a modern approach to FP&A brings more agility, helping you quickly recognize challenges and opportunities, model different scenarios, and make the career-defining decisions that avert disaster or capitalize. on new opportunities.
And yet, for too many CFOs, digital transformation is long overdue. If your company’s leading metrics aren’t served to you daily (at least weekly) in a format you trust, how do you know if you should move forward or assess the trade-offs? And do these leading indicators automatically feed into your rolling financial forecasts? Email me if they don’t, you don’t have to live that way!
2. Cyclical financial and accounting processes must be highly automated.
Too many CFOs continue to rely on slow manual processes for highly repetitive tasks that happen every month. Yes, technology will reduce your reliance on error-prone spreadsheets, but the low-hanging fruit of digital transformation is in the financial processes that the Office of the CFO repeatedly performs. When was the last time you redesigned these processes, your expectations around deliverables, and how long they take on more strategic finance activities?
These cyclical and periodic processes (monthly closings and consolidations, adjustments, A/R reminders, invoicing, ad hoc reports, reports from the board of directors, annual or quarterly planning, etc.) are essential to the mission and consume a significant part of the time of your teams. And guess what? Your team hates the manual and repetitive elements of this job. The benefits of automation are obvious, but they take time, money, and a shift in ingrained mental frameworks to realize. There are always other priorities and bigger initiatives, so you put off a quarter or a year and get on with it. The easiest thing to do is to accept the status quo.
Pioneering CFOs didn’t put it off. They recognized the importance of automation to eliminate tasks that are slow, mundane and prone to human error. If you can reduce an eight-day shutdown to five days, imagine not only the time saved, but also the strategic impact of giving three full working days each month back to your teams. They will have the opportunity to focus on critical initiatives, learn the levers that drive the business, and work side-by-side with the business to model opportunities, answer questions, and provide financial advice. Now extend those benefits by automating report creation and distribution, reducing the hours of each ad hoc forecast and analysis, automatic data collection and more.
3. Your team is and always will be your superpower.
Whether the recently very tight labor market persists or eases, the Great Resignation has caused professionals to rethink their career expectations and CFOs would be wise to reflect on the work their teams do and how they do it. Is it stimulating? Do they have the right tools and support? Will it attract and retain top talent? Do they have a path to their career aspirations in your company?
It’s table stakes that top talent wants to use innovative, current technology that makes them more productive and gives them more time to focus on the strategic, creative, and challenging aspects of finance and accounting. Your existing teams share this sentiment: they want to contribute their expertise to key initiatives and raise financial IQ in all areas of the business.
Automation, challenging and engaging analytic projects, and a clear path for career progression are key to keeping your teams engaged and productive, attracting new talent, and better achieving your overall goals.
Become a Pioneering CFO
The golden age of CFO technology is unfolding ahead of us, as many new purpose-built technologies are finally available to all finance and accounting professionals, not just those with IT teams. massive shifts in Fortune 500 companies. To be clear, this train has been moving slowly since the 1970s, but it has officially arrived in the form of intuitive finance-owned technology available and accessible to the masses of finance professionals.
You’re driven to make smarter, faster, more financially intelligent decisions across the business, financial uncertainty is growing, and progressive challengers lurk around every corner. But these factors also place the CFO’s office at the heart of every business. The only way to win is to put those financial and accounting technologies to work, taking advantage of this golden age to gain time, ideas and trust.
So where to start ? Define a three-year vision for finance and accounting modernization and start implementing it. Make your modernization an equal priority with other areas of the business. Create internal finance champions; Fine-tune modernization as beneficial to the entire business, as finance and accounting will provide more valuable insights, be more responsive to requests, and have more time for collaboration. Continually reassess your progress with your team, your CEO, and the business as you evolve – be nimble, be humble, adapt when actions fall short of expected results.
We now live in a world where increasing uncertainty is the only certainty. It’s essential that you start becoming a forward-thinking CFO today. If not, when do you find your approach obsolete?