How CFOs Can Shift Operating Focus to Value Creation

Some finance chiefs struggle to drive growth while also running traditional finance functions, such as quarterly reporting and budgeting.
Christian Campagna and AccentureNovember 1, 2016

Opinion_Bug7CFOs are now business value architects rather than cost controllers — and their operating models are being reshaped to reflect that. To re-architect outdated operating models, CFOs are finding new ways to adapt their organizations to a new value proposition. In many cases, that can be an uphill climb.

At a recent CFO conference sponsored by Accenture Strategy at Harvard University, I heard from CFOs about how digitalization is affecting operating models. Many finance chiefs are looking for change and want to move beyond traditional models to those that drive growth and value. But are hesitant – afraid of disrupting the business when the original model is already working.

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Some attendees were concerned about taking the business forward under contradictory mandates, making it difficult for them to focus sharply on re-architecting the way their firms operate. They question how to drive growth while also running traditional finance functions, such as quarterly reporting and budgeting. They wonder how to control risk but fuel digitalization, which can actually fuel risk.

Christian Campagna

Christian Campagna

To begin to lead change in their organizations, CFOs need a better understanding of changing market dynamics. While they understand that digitalization is driving corporate change, many finance chiefs still feel they need much greater knowledge of emerging digital technologies.

Some have experimented with new ways to provide growth but are looking for more experimentation and agility in financial systems and acquisitions so they can have greater involvement in breakthrough projects.

Even though changing the business will involve an ongoing education for CFOs in the coming years, there are a few first steps to consider when assessing how to shift to an operating model that creates value successfully.

  • Find fuel for growth and find it early. Most leading CFOs realize they need to know how much money they can find to invest in growth. The money a company saves by partially digitizing is often what’s put in the coffers to invest in new growth opportunities.
  • Move away from a zero-failure culture. Finance has traditionally lived in fear of errors, and rightly so. Balance sheets matter. But, when driving value and finding new ways of doing business, failures matter because they indicate movement and growth. It no longer makes sense to spend six months developing business processes around a product that may have a shelf life of one year before the next iteration is developed. Be fast and flexible and allow for failures. They mean your team is innovating.
  • Make finance flashy. To create value via an operating model, the finance function must become a driver of growth. This change may be the tallest order of all, because the profile of a finance professional must change significantly for the digital environment. Convincing digitally savvy talent to work for the “boring” finance department will require a CFO who can communicate the new value proposition.
  • Build from the outside in. Since digital processes flow across departments and functions, so building a new operating model in the old-fashioned, step-by-step and department-by-department way will not work. Building silos wreaks havoc on efficiency and effectiveness. A new model, with a digital culture to support it, needs to be built from the outside in, across all organizational dimensions.
  • Eat, sleep, and breathe the change. Companies who do this well have leadership teams who adopt the change first. They do not advocate innovation while only supporting cost curbing. They do not embrace digital while still sporting stacks of paper on their desks. They touch all parts of the operating model at once: people, software, systems. And they lead by example.

Despite their doubts, the CFOs at the conference agreed that their primary operations focus is no longer about accounting or spreadsheets. It’s about becoming a predictive, analytic powerhouse that generates value for the organization.

Christian Campagna is a senior managing director for CFO and enterprise value at Accenture Strategy.