The CFO function was changing long before the uncertainty of the past few years. In a 2019 podcast on the evolution of the CFO role, McKinsey experts discussed a then-recent CFO survey, noting that the scope of responsibilities was expanding dramatically to include digital initiatives and oversight of activities outside traditional finance functions.
From 2020 to the present, CFOs stepped up to the challenge of navigating their businesses through a complex economic environment beset by multiple uncertainties. CFOs who understood the risks and opportunities best took steps to break down data silos and leveraged technology to improve efficiency and facilitate teamwork.
Along the way, they discovered that finance must be a team sport, and that it’s imperative to enable leaders from every department to be champions of finance. Now, forward-thinking CFOs are seeking more ways to improve collaboration across the business so they can identify insights that help drive better business decisions. Here are four ways you can turn your finance operation into a high-performing team that drives more value across the organization.
1. Alleviate manual tasks to free up time for more strategic work.
CFOs are under more pressure than ever to perform at the highest level. Uncertainty is increasing and the only way to win is to become a modern CFO who has more time, insights, and confidence. The department’s next evolution should be offloading much of the mundane manual entry and tedious review work that finance teams typically handle. This will allow for additional bandwidth to focus on analyzing operational data instead – a symbiotic cycle.
Finance is proud of its reputation for data accuracy. By implementing modern technology, teams can streamline reviews and eliminate many lower-value tasks, such as manual data entry, without increasing errors. Automation is one way to reduce the workload. Leveraging AI/ML technologies and better data integration can reduce manual entry errors and create a single source of truth within the organization.
When finance relieves these pain points via technology, that opens the door for a deeper dive into operational data — and up-levels opportunities for collaboration across the business.
2. Focus on what impacts the business the most.
Does anyone actually wait on the monthly close before making business decisions? The answer is no — a majority of leaders run their business on a day-to-day basis. It’s critical that finance and accounting teams partner with stakeholders and department leaders in every corner of the business to determine what impacts the business the most.
It’s all about the prioritization of data-driven business decisions that drive value – by doing so, CFOs can significantly deepen collaboration levels, reduce friction between departments, and enhance the finance team’s reputation as a business partner.
3. Increase your focus on operational data to generate insights.
There are three types of data: commercial, financial, and operational. CFOs typically excel with the first two categories, especially financial data, but many haven’t focused as much on the third type: operational data. If you want to deepen collaboration across the business, now is the time to start.
Operational data may flow in from different point solutions and arrive in a variety of formats, but it’s worth delving into because that’s where you’ll find the drivers of the business. What moves the needle for your company’s sales organization? For its product team? Operational data can help you answer these fundamental business questions.
Armed with answers, finance and accounting leaders will be positioned to generate more accurate commercial and financial forecasts. When you get down to the operational level of data, you’ll also be able to uncover better insights about the business.
4. Become adept at change management.
Some business leaders have had to become exceptionally good at change management because they were forced to by evolutions in technology, changes in markets, or consumer expectations – or potentially all three. Take marketing for example — the skills and tools required to be a great marketer have shifted so significantly that marketing leaders have had to become agents of change management just to keep up.
While some CFOs are terrific at change management too, that hasn’t proven to be a job requirement in the past. It is now. From their work with boards and shareholders, leading CFOs have developed that talent, which they’ll now need to apply more widely to effectively manage change and set expectations with stakeholders inside the business.
With their strategic focus and statutory oversight, CFOs have always been utility players to some extent, and now it’s time to expand the bench by creating internal finance champions. CFOs who free up the finance group for more strategic work, take a deep dive into operational data, work alongside colleagues to address the issues that impact the business the most, and manage change skillfully, will have the best shot at an MVP award.