How CFOs are rethinking leadership in the intelligence age

In an increasingly digitalised economy, business today is vastly more sophisticated than it was just five years ago. The volume of data companies are now able to analyse is enabling a new level of intelligence that was previously unthinkable. The same technology that allows enterprises to become more intelligent is also greasing the wheels of how jobs are performed and how we communicate at work.

According to the Aspen Institute’s recent white paper “Blurred Lines: Understanding the Value – and Values – of Success in the Digital Economy,” customers, employees and stakeholders expect a personalised relationship with the leaders, brands and companies they interact with. This means that companies must adapt quickly – as customers expect to be able to speak directly with an organisation’s leaders and its employees. The same level of accessibility rings true for how teams desire to communicate internally at the workplace as well. This level of on-demand access is influenced in our lives as consumers, in large part due to the “Amazon effect.” Today, processes and experiences thought to be available in B2C organisations have become pervasive in B2B companies. This increased level of transparency into the business is forcing CFOs to rethink their approach to leadership and adapt to new ways of conducting business.

CFOs are no strangers to change. The role has gone through immense transformation over the past decade, moving from a focus on spreadsheets to a focus on strategic decision making and now into corporate steering helping the business functions to make the right decisions. In fact, data from a Korn Ferry study found that the most critical skills for a chief financial officer today are general management (27 percent) and strategy (26 percent); meanwhile, traditional skills like controllership and risk and compliance were cited as the most critical to success by just seven percent and two percent of senior executives respectively. CFOs that have long seen their role as tracking performance and efficiency, now must understand the top-to-bottom strategy and be creative about understanding how to measure success.

Given this new world, CFOs must:

• Get creative: While it may be disorienting, today’s digital economy provides new opportunities to add or create value. Increasingly this value appears at the intersection of fields, driving new cross-sector innovation. To take advantage of these opportunities, CFOs need to design operations for speed and flexibility in order to ensure their role as a strategic advisor to the CEO.
• Embrace openness: Today’s markets and employees demand transparency, accountability, and a sense of ownership. These three traits are actively cultivated by the open source movement, which requires CFOs to break down silos and allow data to be shared more freely internally to facilitate more efficient management of the company. CFOs should take notice to ensure they’re creating a modern workplace that attracts and retains talent by empowering employees with a larger sense of ownership and the ability to work on higher value projects.
• Understand that you’re a technology company: In the digital economy, we’re all technology companies, especially finance organizations. Gone are the days of living by the spreadsheet – CFOs need to accept this reality and drive a technology friendly culture. And don’t forget cybersecurity and putting a high priority on protecting customer data and privacy. It’s a requirement in a hyperconnected business environment and is an even greater priority for those in charge of governance, risk and compliance.
• Seek the best talent: CFOs are starting to better understand the frustration of young people in the field, whose expectations are dashed as they are sentenced to years of mind-numbing work before being given a chance to make a meaningful contribution. Creating opportunities for young professionals has to start early. It’s essential to ensure that finance professionals develop a firm grasp of the cornerstones of the profession – accounting rules, balance sheets, cash flows, and P&L – while helping them focus their skills where they are most needed in an increasingly complex business environment.
• Think “augmented intelligence”: It is true that jobs will be impacted by artificial intelligence, but will jobs be eliminated, or will they just be different? Switch from preconceived ideas about artificial intelligence to “augmented intelligence,” and the focus then becomes one of human/machine interaction where AI is not so much a replacement but an assistant.

What is the best next step for a CFO looking to make an impact at their company? Mitchell Paull, a Partner at Ernst & Young who specializes in SAP and Finance, believes that CFOs will find more success today by avoiding disruption and becoming an agent of change, rather than reaching next quarter’s numbers. Tammy Coley, Chief Transformation Officer at BlackLine, agrees with Paull, that CFOs are in a unique position to help drive transformation, as they touch all aspects of the business.

But what can CFOs do specifically? They can help increase internal efficiencies, agility and collaboration so that the company can improve responsiveness and effectivity. Becoming more agile will help support changes such as innovative pricing and new billing models like product-as-a-service. And what’s more, for many companies – especially in the U.S. – the resources could be there to dive in today, with increased cash on hand as a result of the 2017 Tax Cuts and Jobs Act.

“Many companies have the will to transform,” says Anthony Coletta, CFO North America at SAP. “Now many of them have the means. I predict some significant steps forward for many companies in the not-too-distant future.”

This guest post was written by Henner Schliebs, global vice president ERP and Finance Solutions, SAP