The role of a CFO was once limited to keeping accounts and managing a company’s financial health. Technology has changed that.
The influence of technology in revamping the business landscape—through cloud-based functionalities, automation, and more—has altered the traditional definition of what makes a great CFO.
The responsibilities of a CFO have grown and the key competencies of this role are now more leadership-centric than ever before. In fact, CFOs now dedicate more time to
strategic planning and communication
than finance and accounting matters.
So, here’s a deep dive into how to be a successful CFO in today’s world.
How to be a successful CFO with seven skills
1. Analytical aptitude
Advanced analytics fuel decision-making, steer your company’s growth curve, and limit instability. While business analytics empower organizations to scale exponentially, CFOs are expected to leverage these analytics to enhance operational value.
A good CFO can also
use this data to maximize profitability. The CFO role has subsequently witnessed a shift from a transactional to an analytical position. What makes a great CFO is not what it used to be.
With a strong analytical aptitude, a CFO looks into:
- Procurement
- Business units
- IT infrastructure
- Sales and marketing
- Inventory management
- Supply chain and logistics
2. Risk assessment skills
Predicting and managing risk is among the top responsibilities when considering how to be a successful CFO. The chief financial officer serves as the first line of defense in limiting and mitigating the effects of any business crisis. More importantly, the CFO identifies potential threats and works toward preventing them.
So, the ability to calculate risk and manage it is another key element when considering how to be a great CFO.
Contrary to common belief, the chief financial officer overlooks multiple areas of risk within the operational framework of an organization. On top of the financial domain, here are a few areas where the risk calculation ability comes in handy:
- IT risk
- Security risk
- Personnel risk
- Compliance risk
Equipped with this skill, the CFO can help senior leadership teams to navigate through these risks.
3. Innovation management
A key skill that falls beyond the traditional spectrum of a CFO’s competencies is adapting to new technology.
Advances in technology have ushered in a completely unique way of thinking—a great CFO can no longer rely on old practices. By focusing on innovation management they can accelerate a company’s progress and energize the company culture.
Innovation management will help CFOs in:
- Bringing the best out of all the resources at hand
- Creating a high-powered environment to cultivate creativity
- Enhancing your talent recruitment strategy to get top talent on board
- Introducing modern, automation solutions to minimize repetitive manual labor; like a business travel tool, or expense management tools.
4. Leadership skills
Financial reporting, audits, compliance—these used to be some of the biggest responsibilities of a CFO. Today’s CFOs are expected to envision, understand, and work toward the bigger picture. To achieve this, they engage in tactical problem-solving, take crucial decisions, and manage relationships with stakeholders.
This altered CFO role relies heavily on one vital skill—leadership.
The chief financial officer has to bring the team together and lead them forward while balancing
financial management. As the architect of an organization’s growth, the best CFOs have to adopt a leadership style aligned with the company’s business model and goals.
5. Strategic mindset
An effective CFO should have the business acumen to take strategic initiatives for every department. They partner with the c-suite and board of directors to build the company’s future. They act as change leaders.
Cultivating a strategic mindset will go a long way when working on how to be a great CFO.
The best formula to sharpen your strategic thinking ability is to ask, analyze, and strategize.
- Ask questions that uncover opportunities and challenges for the company
- Analyze diverse viewpoints and research what others are doing
- Use all the information to plan a roadmap for the future
6. Communication and collaboration
Traditionally, CFOs analyzed past business performance to drive decisions. Today’s CFOs contextualize data from the past, present, and future to create meaningful insights and make decisions. The future? Smart tech is enabling CFOs to predict trends and plan ahead when it comes to business spend, policies, and processes.
Plus, to find relevant data and make meaning of it, the CFO and finance teams work in collaboration with multiple stakeholders not directly associated with finance. This is where communication skills are needed the most.
As the role now expands beyond the financial domain, CFOs are required to broaden their skillset and become excellent communicators.
To become an effective communicator in the CFO role, you should:
- Keep meetings engaging and interactive
- Translate your financial acumen into layman terms for others
- Understand departmental goals to have relevant conversations
7. Business intelligence
In a constantly evolving business landscape, CFOs can use Business Intelligence (BI) to fuel the company’s progress.
BI translates raw, unstructured data into useful insights for strategic decisions. Sound knowledge of BI empowers a CFO to check the company’s financial health, improve its competitive edge, and drive profitability through informed decisions.
Here’s a look into the importance of BI for a company:
- Helps in compliance and reduces or mitigates risks
- Allows thorough, competitive analysis to gain an edge
- Assesses operational performance to optimize workflows
- Monitors multiple metrics for conversion, retention, and churn to ensure profitability
With complete know-how of BI tools and frameworks, CFOs can analyze and plan better.
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Becoming a better CFO
With these seven essential skills, you now know what makes a great CFO.
That being said, the bottom line still remains—the role of a CFO is constantly evolving. Changes in technology and the way businesses operate make it difficult to conclude how to be a successful CFO. You’ll need to stay on your toes, that much is for sure.
TravelPerk can help minimize CFO stress of managing business travel expenses by making booking and reporting on travel a whole lot easier. At least that’s one thing off your to-do list!
Get in touchwith the team to find out more_._
