As the business world continues to evolve, so does the CFO’s role. CFOs are facing economic instability, geopolitical tensions, shifting regulatory dynamics and a financial landscape that is increasingly difficult to predict. As a result, their role has expanded from a traditional fiduciary position to that of a strategic leader, entrusted with steering the business toward long-term success.
While financial acumen remains a core requirement for any finance leader, successful CFOs need a much broader set of skills than ever, including leadership, resilience, business strategy and an understanding of how technology and data can be used to drive decision-making.
Strategy, planning and value
Today, CFOs must focus on three key areas: strategy, planning, and value creation.
Increasingly, CFOs are taking on a more significant role in optimising their companies’ cost structures. They’re tasked with using financial data to generate business intelligence and guide strategic decision-making. At the same time, they need to understand how evolving technology can support these efforts.
Undoubtedly, one of the most important responsibilities of a CFO is to ensure the organisation remains resilient and competitive in times of change. They need to have the trust and confidence of the CEO and possess the ability to push back on decisions if needed.
A modern CFO is a strategic partner to the CEO, the board and the entire organisation
Christoph Martin, CFO at Pension Bee, says: “A modern CFO is a strategic partner to the CEO, the board and the entire organisation. This involves not only supporting the company’s strategic vision but also ensuring that the finance team plays a crucial role in quantifying this.”
Martin says essential skills include the ability to develop a business plan that clearly outlines key performance indicators, growth profiles and business profitability.
“It is the CFO’s responsibility to identify the value drivers within the key metrics that will propel the company’s financial success,” he adds.
The traditional approach of taking a backwards-looking view will no longer cut it; the only way to be a true strategic partner to the CEO is to harness real-time business intelligence with a view to the future. To achieve this, CFOs will need to add another string to their bow: data scientist. In the face of rapid technological advancements, CFOs must continually stay abreast of developments and demonstrate an understanding of how new technologies and tools can drive innovation.
There is a wealth of financial and strategic insights to be gained from data and analytics, and CFOs will be under increasing pressure to use these to their advantage, say experts.
“It is not enough to just provide raw financial data. I need to draw on my deep knowledge of the business and the macro environment and provide insights into the numbers, then input that into our current and future investments,” says Kirsty Godfrey-Billy, CFO at Xero. “In short, to be a strategic leader, a CFO needs to know the data, why it matters and what to do about it.”
For Martin, developments in technology will also provide CFOs with more time to focus on their other skills.
“Technological advancements haven’t diminished the need for any key skills as a CFO, but they have provided an opportunity to enhance productivity through automation. Routine tasks like monthly reporting can now be substantially automated, allowing more time for strategic initiatives that steer the company’s direction,” he says.
The growing importance of soft skills
Firefighting is an occupational hazard for CFOs, and it’s fair to say the past few years have put their abilities to the test. Many CFOs have been forced to take on a much more visible role, bridging the gap between the finance function and the rest of the organisation. This requires a unique set of soft skills. Today’s CFO needs the communication skills and influence to develop relationships, convey complex financial information in a way that can be easily understood across a wide range of stakeholders and crucially, build consensus.
Often, the CFO is the first port of call for senior leadership to discuss the feasibility of new ideas and ventures, acting as both a sounding board and problem-solver. The ability to see the bigger picture and clearly communicate the pros and cons of an approach are critical aspects of the thinking and communication skills CFOs need to be successful.
“One of the most important qualities for any finance leader is strong communication; knowing when to listen and when to speak,” says Gary Burton, CFO of Audley Group. “CFOs must be clear, succinct and relevant. Minimise mistakes by being clear and keeping it simple. I work on the basis that any intellectual capacity we have as a team is to be channelled into delivering the simplest solution.”
According to Godfrey-Billy, CFOs must build strong relationships with people across the business, and this requires emotional intelligence and social awareness.
“These are not necessarily skills that spring to mind when you think of a finance leader but I believe these have a huge impact on how you build relationships and the quality of work you can deliver,” she says.
“Things I try to incorporate in my role are self-awareness, having a positive mindset, having empathy for what others are going through and taking time to understand their perspective,” she adds.
The ability to build relationships is also a critical part of building and growing a high-performing finance team.
“Strong leadership skills are essential in a CFO role, particularly when building diverse and inclusive finance teams. Balancing high performance with individual purpose is key to fostering a culture of autonomy and progression. The importance of empathy, active listening and being values-driven should not be underestimated,” says Martin.
The world is changing faster than ever, and in this environment, CFOs cannot afford to rest on their laurels if they want to thrive. With a constantly evolving business landscape, growing customer and investor demands, and a global push for greater financial transparency and accountability, CFOs must be ready to embrace new skills.
