I was sitting in the office of a CIO for a large national bank, and we got to talking about his approach to deciding and prioritizing projects. It became pretty clear, at this point, that much of what got the green light was determined by his boss. This was not the CEO but the CFO, and at the mention of her name his eyes widened slightly — that look people get when they talk about someone who has the power to intimidate them.
At the time, I thought having a CIO report into CFOs was nonsense, though I realized it was a common practice. After all, CFOs have traditionally been more concerned with expenses and cost management than innovation. They work in what has often been the last function to embrace digitization. This was clearly an area in which they were acting as the CEO’s preferred designate, and therefore unlikely to recognize where technology could play a strong role in value creation.
That was around 2001. Since then, of course, much of the CFO’s world looks a lot different. Like CIOs and even CMOs, they are jostling to help determine the actions that will lead their firms not only to profitability but to execute on their sense of purpose. They want to be seen as more than bean counters but as executives whose financial background is simply a foundation for realizing their full leadership potential.
Perhaps more to the point, CFOs have had to recognize that digital technologies can be just as effective in transforming their work and those of their team as other lines of business. Even if they were burned by the failure of meagre results of business intelligence projects, they are as likely today to be using things like Slack and Microsoft Teams as e-mail. They are trying to assess what artificial intelligence means for their ability to forecast and better manage the investments their firms need to make. They, like their peers, are increasingly mobile-first, doing more of their jobs via smartphone than they ever would have imagined 20 years ago.
Then there’s the matter of performance. I don’t mean how well they do their job but now CFOs have to present themselves to the outside world. CFOs are the most likely people, for instance, to co-lead earnings calls with investors and analysts along with the CEO. Today a lot of those calls and webcasts delve into the specifics of digital and IT investments intended to benefit the company, and by extension its shareholders. This demands a significant degree of digital fluency, and an ability to respond to tough questions about what an organization is doing to better serve its customers and why.
Finally, there is the nuance of working as a CFO in a B2B firm, where the customer experience — and all that is needed to support it — is going to be much different than a consumer-oriented firm. CFOs here not only need to understand their employers’ core competencies, but those of the equally complex industries those employers serve. And unlike CMOs who may be campaign-based or chief revenue officers who are preoccupied with buying cycles, CFOs need to execute effectively based on quarterly markers.
Though a number of them are probably on vacation right now, August feels like a good time to reflect on this role in our “CFO Issue.” Fiscal years will be ending in just a few short months. Data-driven CFOs have to prove they are evolving, improving and delivering on their promises. They already have respect based on their title and place in the org chart. Credibility? As with any C-suite function, that has to be earned.
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