28 February 2023
Organizations will start to look at the modern skill sets of today’s finance executives rather than providing job descriptions for the role.
In recent years, the role of Chief Financial Officer (CFO) has undergone significant changes. Gone are the days when CFOs were simply responsible for managing a company’s finances. Big things are expected from modern CFOs and today’s CFOs understand numbers and produce reliable reports, but their role has expanded appreciably.
What should we anticipate from this new generation of CFOs? Organizations will start to look at the modern skill sets of today’s finance executives rather than providing job descriptions for the role. This is because some of the abilities listed in the job descriptions are dated, while the skills that are not, are the ones guiding businesses into the future. Today’s CFOs are expected to have a much broader skillset, encompassing strategy, technology, risk management, and more. In this article, we’ll explore the new breed of CFO and what it takes to succeed in this critical role.
The Evolution of the CFO Role
The CFO role has evolved significantly in recent years, thanks in large part to the increasing importance of technology in the workplace. Today’s CFOs need to be comfortable working with complex systems and data analytics tools, and they must be able to provide strategic insights based on the data they collect.
Another factor driving the evolution of the CFO role is the growing emphasis on risk management. In the wake of the 2008 financial crisis, companies have become much more focused on managing risk, and CFOs are at the forefront of these efforts. Today’s CFOs must be able to identify potential risks and develop strategies to mitigate them, whether they relate to financial, operational, or other areas of the business.
The New Skills Required of CFOs
Given these changes in the CFO role, it’s not surprising that the skills required to succeed in this position have also evolved. Today’s CFOs must be able to do much more than just crunch numbers. Here are some of the key skills and attributes that are now essential for CFOs:
Strategic Thinking
Today’s CFOs must be able to think strategically and provide insights that go beyond traditional financial analysis. They must be able to understand the broader business landscape and provide guidance on issues such as mergers and acquisitions, market trends, and competitive pressures.
Technology Savvy
In today’s digital age, technology is essential for any business to thrive. CFOs must be comfortable working with a wide range of tools, including data analytics platforms, enterprise resource planning (ERP) systems, and other software applications. They must also be able to use technology to drive innovation and streamline processes.
Risk Management
As noted earlier, risk management has become a critical focus for many companies, and CFOs must be able to play a key role in this area. They must be able to identify potential risks, develop mitigation strategies, and work with other stakeholders to ensure that the company is adequately prepared for any eventuality.
Communication Skills
CFOs must be able to communicate effectively with a wide range of stakeholders, from investors and analysts to employees and customers. They must be able to explain complex financial information in a way that is easy to understand, and they must be able to inspire confidence and trust.
Leadership
Finally, today’s CFOs must be strong leaders who can inspire and motivate their teams. They must be able to set clear goals, provide guidance and support, and hold their teams accountable for delivering results.
The Importance of Soft Skills
While the technical skills outlined above are essential for any CFO, it’s important not to overlook the importance of soft skills. In fact, many experts believe that soft skills such as emotional intelligence, empathy, and resilience are becoming increasingly important for CFOs.
For example, CFOs must be able to navigate complex interpersonal dynamics within the organization, build relationships with stakeholders, and manage change effectively. They must also be able to deal with the stress and pressure that comes with the job, and maintain a positive outlook in the face of challenges and setbacks.
The Role of the CFO in Driving Digital Transformation
One of the key areas where the CFO can make a significant impact is in driving digital transformation within the organization. By leveraging technology and data analytics, CFOs can help to streamline processes, improve efficiency, and drive innovation. For example, CFOs can use data analytics tools to accurately predict what the company’s cash flow will be over the next week, month or even year so that they can take the right financial decisions to keep the business running smoothly and to secure its future.
As companies pursue strategies for digital transformation in finance, CFOs are the key drivers of this digitalization. Digital technologies will transform every sector by 2026 and will continue to impact the future of finance. As a result, CFOs need progressive solutions to ease the transition. This also means that CFOs will be called upon to work closely with IT departments as companies progress with their digital transformations.
However, The Fundamentals Of CFOs Remain The Same
Despite all the differences exhibited by the new breed of CFO, financial executives still base their work on traditional, critical foundations. When it comes to balance sheets and debt repayments, the buck still stops with them. CFOs still manage the substantial work of reporting and forecasting, so stakeholders have accurate information.
Also, the need for simplicity and cost-effectiveness in finance operations will never disappear, even if the methods for achieving them may change. The new CFOs typically embrace flexibility and scalability. They resemble well-rounded entrepreneurs who are willing to customise finance departments while they adopt global best practices.
