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Today’s CFOs want — and need — to be strategic. But more and more, they’re forced to be merely tactical.
Amid mounting inflation and widespread economic uncertainty, CEOs are calling on finance chiefs to drive big-picture solutions for revenue growth and cost savings. In an increasingly digital landscape, integrating new technologies and data analytics to do so is paramount. Meanwhile, diversity, equity, and inclusion (DE&I), ESG, and corporate sustainability will only become more important in years to come, and CFOs have a role to play in translating these goals into tangible actions.
Chris Spurio
Even in the best of times, it would be difficult to juggle all of these priorities. But now, facing a slow-growth economy with limited resources and talent, the challenge has become particularly stark. It should come as no surprise that CFO turnover continued to rise throughout 2022, while retirement rates have shot up for the first time in three years.
It’s a new business world, one which requires leadership agility and new standards of excellence – and this calls for a new kind of CFO. Here are four key priorities executives should focus on to stay in the game.
This whitepaper outlines four powerful strategies to amplify board meeting conversations during a time of economic volatility.
CFOs aren’t always known for being the best communicators. But in today’s labor market, that has to change.
Three CFOs we work with all told us the same thing: we have mediocrity in our ranks, but we’re afraid of telling an underperforming employee that they have to step it up because if they leave we’re not sure we can replace them. The truth is, you’re going to lose your best people if you don’t motivate your less engaged ones to do better. It’s also more costly to hire a new worker than to upskill an existing one.
So sit those staffers down, and don’t shy away from the truth. Tell them we’re all in this together. Be very clear about pain points, the steps they can take to improve, and what you can promise if they achieve them. Accept the difficulty of these conversations and remember that people aren’t necessarily leaving because the grass is greener on the other side; they’re leaving because their grass isn’t getting watered anymore. And you don’t have to wait until there’s a problem — have clear, courageous conversations early and consistently from day one to drive retention.
You’re going to lose your best people if you don’t motivate your less engaged ones to do better.
This courageousness should also play a part in recruiting. Have conversations with candidates who might not fit the typical profile (e.g., college finance majors versus CPAs) and take this moment to improve diversity and even explore alternative staffing models, such as apprenticeships, outsourcing, or co-sourcing.
Amid widespread labor shortages and cost pressures, nearly half of the executives surveyed in a recent report said self-service data and analytics could drive employee productivity; others cite the beneficial use of automation and artificial intelligence in areas like accounts payable, invoices, and forecasting.
But integrating these tools is no simple feat. CFOs need to understand what technologies are out there, how to deploy them strategically, and how to best acclimate employees to new tools. That requires technical expertise, an emphasis on continuous innovation, and collaboration with IT departments to ensure the right data is captured and aligned with key business goals.
It also entails moving away from finance’s traditionally held notions about technology.
“CFOs tend to see technology as a tool but rely on people to make decisions,” Gartner vice president Dennis Gannon said at a recent conference, reflecting on the firm’s digital transformation research. “Even when the evidence shows that technology makes better or more accurate decisions, people are still reluctant to trust it.”
That means finding the right combination of platforms, processes, and people that can be enhanced by digital solutions. Actions, therefore, need to be taken in concert: automation for collections and invoice processing; a modernized enterprise resource platform (ERP) and general ledger platform to help employees leverage information faster; data analytics to improve decision-making; and real-time operational insights through tools used in the field, as well as the back office.
That’s what a CFO of a mid-market manufacturing company did after acquiring a new company that doubled the back-office workload. He integrated a digital accounts payable solution with their existing ERP to increase visibility and accountability, reduce uncertainty, and better manage cash flow. Beyond that, the shift empowered employees to make analytics-driven decisions and automate tracking, providing higher confidence in business operations and financial controls.
Upskilling has taken on fresh urgency in today’s talent market. CFOs trained to follow the hard numbers might not have as much experience with the soft skills needed to develop talent effectively.
This exercise is less about addressing a team’s finance-related questions — they’re already experts in that area — and more about nurturing talent more broadly, be it around topics like leadership, customer relationships, or strategic transformations. For instance, training new hires on digital tools such as Path and Tableau demonstrates CFOs understand the way work gets done is changing and that technologies like these are here to stay.
Employees don’t just want to be another cog in the machine — to truly make behavioral changes, they’ll have to know why they’re developing a given skill and how this work fits into the broader picture.
On that front, CFOs should also take advantage of a variety of channels. Remote learning can reach more people, but it needs to have features — like polling questions — to make it interactive and engaging. At the same time, digital-first workers are increasingly looking for training on the go: real-time answers to issues that they can look up and find quickly and efficiently. At our firm, we have a CBIZ Solutions App that provides training snippets that can be easily searched anytime, anywhere.
Throughout, communication is critical. Employees don’t just want to be another cog in the machine — to truly make behavioral changes, they’ll have to know why they’re developing a given skill and how this work fits into the broader picture.
A client of ours is a longtime CFO for an HVAC company, and, like so many other business leaders today, faced a new demand from employees: the need for purpose and meaning in their work. Being in the business of selling heating and air conditioning equipment, it wasn’t immediately obvious what this might entail.
Yet the company took the need seriously, and eventually developed a community outreach program to upgrade HVAC systems at public schools. The CFO told us it created unity amongst his team, drove recruitment and retention, and made a real difference in their community.
This is a fairly new concept for most CFOs. But now is the time to evolve for the better. For instance, when we recruit, we now lead with our community engagement programs and DE&I commitments. The key is to ensure these community initiatives align with your firm’s overall corporate purpose and vision and vice versa.
ESG and corporate sustainability are part of this endeavor, too. CFOs will be increasingly responsible for sharing, reporting, and quantifying the narrative around these efforts while managing the investments that go into making them a reality. The accounting and finance function might even be one solution to the problem of current ESG reporting, and progressive CFOs can be leaders in this area.
To meet the demands of today’s fast-paced business world, CFOs must figure out how to manage new technologies, a new team dynamic, and a workforce that likely has different professional experiences and expectations.
Now, however, is the time to shift the mindset and evolve. Now is the time for even more agility and excellence. Now is the time for a new kind of CFO.
Chris Spurio is president of financial services at CBIZ, an accounting, insurance, and advisory firm.
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