VideoThere is no question that over the past decade or so, chief financial officers have risen to prominence in the corporate landscape. And with the new century upon us, it's only natural to wonder how the role may continue to evolve. What new responsibilities will they be expected to assume? Could a significant economic downturn mean a return to bean- counting? Will the Internet shrink the finance department to a one-person outpost monitoring legions of outsourcers?
What follows are our predictions--based in part on your perceptions--for the future of finance in the next decade. Some predictions may seem obvious; others, far-fetched. About all we can say with absolute certainty is that the rules of the game will continue to change, and that finance executives must be ready to change with them.
1
Speed, not structure, will rule.
It is 57 days, 3 hours, and 49 minutes to the end of the century, and Craig Monaghan is a bit frantic. The CFO of iVillage Inc., which runs a leading online site for women, has just come off a two-week road show for a follow-on offering to last March's initial public offering. Now, with a fresh $75 million on hand, he's staring at an earnings-release deadline that's just hours away.
As the clock ticks down, Monaghan checks on the work of staffers who are double-checking the third-quarter numbers, while fielding calls from an advertising sales manager, an investor-relations consultant, and iVillage CEO Candice Carpenter as she steps off a plane. The next day's announcement should add to the four-year-old company's legacy of losses, yet he hopes investors will focus on the progress being made on key nonfinancial, brand-building, and core metrics.
For the 42-year-old Monaghan, the speed and intensity of the job is nothing like what he experienced growing up in finance at General Motors, Bristol-Myers Squibb, and Reader's Digest. Rather, it feels more like his life back in 1980, when he commanded a tank unit in South Korea and had the authority to launch missiles if the North Koreans fired on his platoon. "There we were on the front edge, and here [at iVillage] I think we are on the front edge as well," he says.
In Monaghan, it seems safe to say you can glimpse the multiple roles CFOs will play in the future--strategist, technologist, deal maker, financier, and CEO partner. There is little evidence that the pace of change will slacken. In a recent survey of 620 readers, in fact, we asked them what they think the future holds: 67 percent said they expect the rate of change to accelerate. Only one respondent thought things would slow; the rest predicted that the pace would stay about the same.
For Monaghan, whose new-century priorities-- manage rapid growth, push for profitability, seize new strategic opportunities--reflect those of many finance chiefs, the speed is exhilarating. Yet this 21st-century CFO secretly yearns for that relic of corporate finance--the inches-thick binder of management reports. "I'm envious of the sophisticated systems, formal policy manuals, and monthly reporting packages that big companies have," he confesses. Reminded that many firms want to stop delivering reams of backward-looking data, Monaghan agrees that there's no need for them, but adds ruefully, "I'd like a little more structure than I have right now."
Prediction 2
Responsibilities will increase.
In recent years, CFOs have faced a slew of new challenges as financial markets have become global, investors have become more demanding, and the Internet has reshaped how value is created. To keep up, says Frank Gatti, CFO of Educational Testing Service, in Princeton, New Jersey, "the CFO has to have a more integrated view of the business, a greater understanding of the impact of technology, and an ability to align people with the organization's objectives. Without these qualities, you can't support the company's needs in the future, or now."
The problem, of course, is one of balance. Rick Fleming, the CFO of building-products giant USG Corp., estimates that he now spends more than half his day on what he calls "nontraditional areas"--for example, market-segmentation issues, optimizing the supply chain, and exploring E-commerce opportunities. Which means, of course, that he has only half a day for everything else a CFO is expected to do.
Others are just as busy. In fact, according to our survey, the number of priorities CFOs count as major is rising. And we predict that their plate will be at least 10 percent fuller in the new century.
Not that they are complaining. "I wouldn't like a job that was narrow and predictable," says Linda Havard, CFO of Playboy Enterprises Inc. "Having a broad set of issues to deal with makes the job more fun." The trick, says Fleming, " will be to not drop the ball in the areas where I'm ultimately held accountable. I'll still have to do what I've always done, but I'm going to have to learn to handle a more complex job. And there will still be only 24 hours in the day."
Prediction 3
The work week will lengthen.
The problem with those 24 hours is finding time to sleep. When asked about the one thing they would change about the job, CFOs complained most about the hours. Almost three out of four respondents already work more than 50 hours a week, with almost half of that total putting in more than 60. And with the ubiquity of E-mail, faxes, and cell phones, the workplace is now everywhere, and the workday, in theory, is never-ending.
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