A good CFO-CEO relationship can be as difficult as it is important to maintain. CFOs, who must act as company skeptics and realists in their role, must also balance the CEO’s wishes and what is ultimately best for the company. But the relationship between finance and other areas of the company can become strained, when revenue growth and profitability are at odds.
While disagreement may occur, new data from Gartner suggests both groups agree on the importance of growth and new technologies. When it comes to growth, 45% of CEOs surveyed ranked it in their top three strategic priorities — though down from 53% in 2022 — while 62% of CFOs put growth in their top three, which is up from 59% in 2022.
Technology Drives Growth
Technology, an area in which CEOs, CFOs, and Gartner alike have had their eyes set upon, is an area in which leadership agree upon. Data shows over a third (36%) of CFOs believe this effort is a top focal point. A nearly identical number of CEOs (33%) agree.
“Balancing future growth investments and CEO expectations, while still tightly managing cost and cashflow, is the tightrope CFOs must walk in the back half of 2023,” said Alexander Bant, chief of research with the Gartner finance practice.
“The top questions CFOs should be educating the CEOs and the board of directors on as the business cycle begin to turn more positive include: How should we sequence funding for organic and inorganic growth bets? How best do we secure capital? What does it look like when we model out the impact on margin and ROIC?” Bant said.
Inflation still is considered one of the top three factors damaging business outlook. More than half of CFOs want to raise prices (54%) in response to inflation, and that number has dropped by 11% since 2022. While the change year-over-year is less, the number of CEOs who think raising prices is a solution to inflation is dropping, too.
According to data, CFOs have also outpaced their CEOs in the rate of concern about inflation when it comes to optimizing costs in response. CFO focus in this area jumped 17% compared to this time last year (23% in 2022 to 40% in 2023), a sign they may be seeing something that their CEOs are not.
Just over a third of CEOs are focused on cost optimization as a way to counter inflation and, although this number is the second most common answer among the group, the number of CEOs that answered the same way last year is unchanged.
Other ways CFOs are working in conjunction with their CEOs to counter inflation include improving productivity, efficiency, and automation. Although there is little change in comparison to last year’s responses in this area, the focus remains prevalent in both groups. Just under a fifth of CFOs (19%) say efforts in those places can combat inflation, alongside just over a fifth (21%) of their CEO counterparts.