HR & Management
Ten strategies the best CFOs and FDs have mastered
5 min read
02 May 2017
In today’s competitive landscape, the best CFOs help corporate leaders make more informed decisions. As such, their role has evolved.
Looking at finance departments across all industries, very clear trends stand out on the strategies the best CFOs are adopting. Here’s an analysis of ten specific strategies.
1) Effectively balancing cost control with growth
Historically, CFOs shine in times of trouble, when companies need to cut costs, improve efficiencies and conserve cash. When companies are in growth mode, the finance leader has sometimes been seen as the “Mr. or Ms. No” of the organisation – prone to vetoing new ventures. The best CFOs strike a balance, bringing a disciplined approach to pursuing innovation and working to ensure the company takes on the right mix of risk.
2) Taking an active approach to planning
The best CFOs are translating business strategies into finance strategies with an active approach to planning. To be effective, they need a deep understanding of the business from both financial and operational data, they need to collaborate across functions and plan and adapt with speed and agility.
3) Be part of a small, core group that truly runs the business
The value of the CFO advising the team strategy is best summarised by Ian Tyler, CEO of Balfour Beatty: “There’s a difference between a good CFO and a great one. One of the corporate myths is that CEOs run companies. They don’t. Within any company there is a small group of people who make the decisions, and to be part of that team is a question of reality, not status. As a CFO, you have to be resolving the balances in the business.”
4) The best CFOs embrace a culture of analytics
CFOs are turning to modern financial technology to create a culture of analytics. Big data has enormous potential to give companies the real-time critical information – and the best finance leaders have been quick to embrace that potential.
5) Leading the charge in adopting new processes and tools
As a company evolves, tools and processes must evolve with it – especially as concepts such a big data become more widely accepted and used. Although some functions may resist change, CFOs can’t afford to be technophobes. They must lead the charge so that the organisation avoids falling behind and losing its competitive advantage.
Read on for points seven to ten.
6) Having multiple points of view
Great CFOs know it is important to have visibility into the entire organisation, not just the finance function. They then use that unique business perspective to look at a problem from many points of view, to find the best possible resolution – connecting the dots between processes, products, sales and marketing.
7) Arming a team with the right information
Inaccurate data can be a huge blow to a CFO’s credibility. The top finance chiefs fully understand this, and they make sure to stay consistently up-to-date with accurate business performance data, leveraging modern process and technology to ensure accuracy.
8) Communicating effectively with the business
In a marketplace with intense global competition and increasingly active shareholders, the CFO must be as adept as the CEO at communicating the company’s vision and performance. The best CFOs use the numbers to hand shareholders a clear view of the company’s current status– and help employees understand how they contribute to achieving future goals.
9) Using dashboards to provide a clear view of financial and operational data
Financial tools again play a role in communication of critical data. Manually processing data from disparate reports is inefficient. Instead, the best CFOs are using dashboards that are more intuitive so that executives can better monitor and communicate data.
10) Fully investing in the business’ successCulture, Analytics
The best CFOs don’t just help to run the business, they become true partners who are fully invested in its success. As fully-invested partners, they take responsibility for and completely understand the importance of what makes an organisation successful and generate revenue, as well as where the potential drains on resource lie.
Rob Douglas is VP of sales UK & Ireland at Adaptive Insights