What does it take to become a CFO?Shuchita Gupta
Whenever I attend seminars or workshops as a mentor, speaking to young talents how to be groomed to become the next CFOs, I always get asked the “most important question” – what does it take these days to become a successful CFO? To become a successful CFO, it takes lot more than just having an absolute proficiency in finance.
A CFO’s role in today’s business world is extremely critical. The role is more like being the driving engine to run an organization – influencing stakeholders, driving strategy and operations, enabling key decisions, which may affect the future of the organization. All to take the company to the milestone it has set. A CFO is more like an influencer, a leader, a visionary. An investor, a client or a stakeholder often looks up to the CFO to get a pulse on the organization and its financial health, as CFO’s decisions and actions tend to have a serious impact on the share price or trading position of the company. In today’s time a CFO is expected to raise the bar and develop a whole new set of competencies and skills at every level. A CFO, to be successful today, will require a broad range of skills, from technology adoption to looking at the business operations side of things/business strategist and catalyst. The CFO must be able to narrate where the company is today, and where it is going.
Here’s what it takes to make a successful CFO:
One who leads
CFOs of today are not only concerned with the bottom line of the organization. They are capable and are expected to participate and contribute to the top line as well. They help key business leaders quantitatively analyse the financial implications of the various strategy choices. They also analyze and examine the risk levels and expected returns of future strategy alternatives. Like I mentioned, a CFO’s role is that of a driving engine that brings and grinds together the capabilities and resources of the business to ensure accountability in areas like performance, operations, etc. A CFO is an influencer who brings together key data and information, including strategic plans with the help of analytics to empower leadership to make informed business decisions. They must know how to hire, manage and support the teams working right under them while motivating and encouraging them to work as a team towards the overall financial goals of the company. Also, with the help of current technology, the CFO can assemble data on key operational and performance indices quickly enough to help in effective decision-making.
One who can see beyond
Our present is driven by technology and so is our future. Digital is a crucial aspect that’s dominating the world of finance and CFOs see beyond the ways to utilize this technology to solve problems, create unique experiences and accelerate business performance. CFOs today need to have a broad vision,finance being only a part of it. A visionary who can transform and adapt to a digital age, who can plan and implement robust and effective digital strategy across the business, being involved in all forms of operations. Digital capabilities are constantly evolving and finance leaders will need to work towards keeping pace with impending changes and to prepare their organizations to be future ready. Need to view costs as investment. Focus on how to contribute to and improve top line rather than just improving bottom line (by cutting costs). Finance role, today, is more about processes and risk control than just recording and reconciliation of figures.
One who is an all-rounder
Besides technology, the finance world is accelerating and is currently shaken by megatrends such as shift in global economic power, demographics and social change and needless to say, CFOs must be more proactive to keep their companies ahead of these trends and curve. Traditionally, the finance department generated reports on the historical performance of the company. But now that focus has been replaced by the need for strategic analysis of current and future growth prospects. As part of that new perspective, CFOs today take a more holistic look at their companies’ overall business operations and market development. Whether it comes to analyzing the lifetime customer value metric or measuring annual recurring revenue or promoting a progressive and transparent culture, one that emphasizes collaboration and information sharing – a CFO does it all to enhance business turnover. CFOs should meet customers once in a while to understand their perspective. This, not only helps in better designing of proposals, but a CFO may also use business models to help customers understand the organization’s offerings better.
And when it comes to startups, the role of CFOs goes well beyond the company’s finances – they are responsible for the path of growth, form new relationships, understand and implement tax rules, company rules and other compliances unique to states within India or unique to other countries, drive measurable value, and establish core financial processes and reporting requirements. They are expected to deliver immediate value and contribute to long-term objectives – one who builds the roadmap and leads the company to reach the destination.
Got questions? Feel free to connect with me on firstname.lastname@example.org
Leave a Reply