The Changing Role of CFO: Today's CEO Growing Responsibilities

In June 2017, Boeing announced that its Chief Financial Officer (CFO), Greg Smith, will assume new, expandedresponsibilities to include accelerating innovation, productivity and oversight of enterprise performance and strategy. This announcement is just the latest in a string of recent moves to expand the roles of CFOs by organizations, and likely not surprising to CFOs across the country. That’s because CFOs have seen their duties grow over the past few years. In fact, 85 percent of CPAs said the role of the CFO and the finance function has expanded moderately or significantly in their organization, according to a recent AICPA survey.1

In the modern day business landscape, CFOs are faced with balancing competing demands on their priorities and time, tasked with continuing to manage traditional financial responsibilities while also playing a transformational role in driving strategy for their business. Consider a recent Dun & Bradstreet survey which found almost all (97%) financial leaders say their responsibilities now include a growing emphasis on strategic responsibility.2

While changes in today’s economic and business marketplace have driven this need for more involvement from CFOs, it hasn’t come without its complications and challenges. Many CFOs face difficulties meeting the expectations of both financial and strategic roles. The good news is by modifying key practices and skills, and leveraging emerging technologies, CFOs can forge a smoother and more successful path forward.

Leveraging Data to Inform Better Decision-Making

Emerging data capabilities and technologies can be powerful in helping CFOs meet business expectations in their new joint role. In fact, the Dun & Bradstreet survey found the majority of financial leaders (45%) believe data is “extremely important” to make smart decisions and forecasts. The biggest data benefit cited by 43 percent of respondents centered on helping collate customer intelligence.3 However, many CFOs face strong headwinds when it comes to executive leadership’s willingness to invest in technology and data intelligence tools.

CFOs must gain support for the data and analytical capabilities needed to empower their insight and more informed decision-making, as well as the talent equipped to deliver on the opportunities offered by those platforms. The reality is, if strategic planning is a top priority for the organization, the finance function needs to invest in its people and in the technology necessary to drive budgeting, forecasting and long-term planning. Often, this means addressing financial data needs as well as operational information that drives more effective business intelligence for identifying new market and profit opportunities, measuring business performance, running simulations or bringing customer insights.

Gain a Deeper Understanding of the Business to Drive Performance

It goes without saying that a key element of the new strategic role is driving business performance. In fact, more than one-third of financial leaders (34%) say driving performance will be an essential skill in the next one to three years.4 However, a precursor to driving performance is an extensive understanding of the business in order to define key metrics and identifying opportunities to improve bottom-line performance.

CFOs will need to ramp up relationship-building and learnings gathered from the whole of the senior management team, as well as line-of-business (LOB) leaders. These constituents are increasingly looking for business advice, not just finance advice. This requires CFOs to have a keen business focus and valuable input. On the flip side, CFOs can better operate their finance function when operations teams and LOB leaders understand and focus on finance. Again, an important reason why connections need to be made with these constituents.

With More Time in the Spotlight, You Need Highly-Effective Communication and Leadership Skills 

As CFOs expand the scope of involvement throughout the organization, and the increased exposure to the CEO and boards, communications skills have surfaced as a priority. CFOs must convey complex financial results and business performance to external stakeholders, while also pursuing specific initiatives internally. In this regard, CFOs will need to learn not to speak over people’s heads in many instances, while reverting back to technical terms in other situations.

In addition, as CFOs become an even more critical representative and public figure on behalf of the organization, both interpersonal and communication skills must be sharp. And, as data plays a greater role throughout the finance function, interpreting and providing insight into complex figures falls on the CFO shoulders.

1 AICPA, “Role of Finance Teams Expanding as Business Complexity Increases: CGMA Survey,”June 24, 2014. http://www.aicpa.org/Press/PressReleases/2014/Pages/Role-of-Finance-TeamsExpanding-as-Business-Complexity-Increases-CGMA-Survey.aspx

2 Dun & Bradstreet, “Study: Facing Forward – The Evolution of the Modern Finance Leader,” April 24, 2017. https://www.dnb.co.uk/perspectives/finance-credit-risk/4-trends-in-role-ofmodernfinance-leader.html

3 ibid.

4 AICPA Survey, “Critical Skills Needed For Finance,” 2014, http://competency.aicpa.org/media_resources/206502-critical-skillsneeded-for-finance-to-cut-through-c/detail