As COVID-19 has shifted from a pandemic to an endemic, CFOs are also transitioning — from a reacting-to-crisis mode to one that is strategic and more forward-looking.
Finance chiefs are still dealing with COVID-era challenges that include remote workforces, persistent inflation, supply chain snarls, and “the great resignation” that has created talent shortages. But they’re also prioritizing projects that will move their companies forward.
While those priorities don’t override the value of corporate finance basics, they do increasingly require additional skills that weren’t in the CFO job description even five years ago. We’ve identified seven skills that top CFOs need to master in today’s evolving business climate.
It’s not enough to be able to present financial performance reports to the board and investors effectively. CFOs are called upon to tell the story behind the numbers to a wider range of stakeholders, including customers and employees.
Steve Priest, eBay’s CFO, stresses the importance of communicating information about the company’s finances with the workforce in particular. “As financial leaders, we don’t generally take enough time to explain technical financial concepts to the broader population. When we do it effectively, though, we bring people on board and create an affinity across the whole organization,” he said.
Communication skills are also essential to innovation and change. “If we can’t communicate to influence a different outcome, all of our data analytics insights may not be understood. I’ve seen situations where there’s been great information but because the message didn’t land appropriately, or because people didn’t quite understand the impact, the information shared wasn’t always used,” said Claire Bramley, CFO of data analytics platform provider Teradata.
Data, data, data. It’s all about the data. And the modern CFO knows how to analyze all that data.
“More and more, my role as CFO is about ingesting and managing massive amounts of data and turning that data – predominantly through technology – into useable intelligence,” said Colin Cunningham, CFO of OnBoard, a board management software provider.
“If you’re a good CFO, you can help the CEO and board understand what’s in the numbers. What can we do differently? What are your recommendations? Give us some ideas of what you’re thinking we should do with this,” adds Tim Murphy, CEO of amusement park company Boomers Parks.
If you’re already tech-conversant, you’re ahead of the game in the finance department and elsewhere in the organization.
“CFOs should be thinking about how they can build a tech stack that will help them and their team be as successful as possible. That means both reducing manual work and having the data and insights more easily attainable,” said Sarah Spoja, CFO of fintech provider Tipalti.
Comfort with technology extends beyond the finance department, though, said, executive recruiter Dave Arnold. He noted, “The best CFOs and their teams are advocating and adopting technology solutions across the enterprise that make it more efficient.”
Vanessa Kanu, CFO of customer experience technology provider TELUS International said the enterprise-wide growth in technology is driving more collaboration, too. “The CFO is never going to be the CIO, but the CFO is expected to partner very closely with the CIO for internal transformation programs and projects. Having strong technical skills and having a bias toward driving internal efficiencies through automation will be important,” she said.
Financial risk management remains a top priority for finance leaders. Tipalti’s Spoja cites a recent conference panel prep call where she and other CFO panelists talked about managing risk in a constantly changing and uncertain environment. Inflation and the possibility of a recession were top of mind.
“We need to always be able to take a couple of steps back and say, ‘Okay, are we in the same situation we were in three months ago?’ And if not, how can we put ourselves in the best position possible? What might we have to change to do that?” she said.
It doesn’t stop with financial risk, though. Today’s CFOs also need to help assess enterprise risk. “Managing cyber risk specifically has now become front and center for CFOs. They’re partnering with their CIO to determine the risks and how to confront them across the entire organization,” said executive recruiter Arnold.
For many finance leaders, focusing solely on the organization’s finances is a luxury of the past. The modern CFO must understand other functions and their metrics while also being aware of what’s happening outside the organization.
“The skill set is around being intellectually curious about all the departments of business, your peers, and understanding things outside of the core CFO purview to be a good contributor,” said Spoja.
“I feel a sense of urgency to be very acquainted with what is happening across the globe,” said Kanu at TELUS International. Kanu, who describes herself as a lifelong learner, adds, “The more global we become, the more we need to be aware of what’s happening in those countries where we operate and in others, as well, because of the geopolitical implications.”
CFOs are increasingly being seen as strategic business partners to the CEO and other C-suite leaders so learning to develop this skill is crucial.
“Helping them think about what’s around the corner and the trajectory of the company, particularly in an ever-changing environment, is incredibly important,” said Priest. To do that, he adds, finance leaders need to be looking forward and anticipating change.
As a recruiter, Arnold uses what happened during the COVID-19 pandemic as an example of how CFOs have more of a voice in developing strategy. “Companies were up-ended, and CEOs and CFOs had to come together to figure out how they were going to react and change their strategy to keep the business moving forward,” he said.
Forward-looking CFOs are increasingly involved in setting a company’s environmental, social, and governance (ESG) strategy and monitoring outcomes. They also have a lot to do with attracting and retaining socially conscious talent.
It’s important enough to Bramley at Teradata that she’s co-chair of the company’s ESG committee. That work led her to a lender that links Teradata’s credit interest rates with its ESG score. A better score yields a better rate, she said.
Priest took sustainability initiatives into account when he stepped down as CFO of carbon-neutral JetBlue to become CFO at carbon-neutral eBay in June 2021. “It’s of paramount importance, that we, as a company, are responsible for our impact on the communities that we serve and the environment in which we operate. I don’t believe it’s a choice. It’s a necessity,” he said.
Expectations for the skills needed by a great CFO today have made recruiter Arnold’s job more difficult. “It hasn’t gotten any easier for companies to find all the things they want in one person. The bar keeps getting raised,” he said.
To increase that talent pool, he recommends that up and comers start preparing for the role by improving their communication skills and broadening their experience. Even if it’s a downward move to get exposure to other areas whether it’s FP&A, investor relations, or treasury, it’s worth it, Arnold said.