To successfully reinvent the role of the CFO and reimagine the finance function for the future, there are three suggested areas for CFOs to focus on:
1. Elevate emotional intelligence
The COVID-19 pandemic has been a significant disruptive challenge, but it has also brought about some positive changes, including leadership styles and a focus on workforce. As CEOs, CFOs and other leaders looked to protect their employees and deal with high levels of employee anxiety, many adopted more frequent, empathetic and human communication approaches. This has placed much more emphasis on emotional intelligence and empathy as critical leadership qualities. This is relevant not only for today’s COVID-19 pandemic situation but also for the future, as companies look to earn the trust of new generations of employees and multiple stakeholders. CFOs can elevate emotional intelligence to one of the most important attributes of their leadership philosophy and approach. This means pinning down what makes for a constructive and valuable peer relationship, approaching discussions with an open mind, and taking the time to share problems and challenges with other leaders.
2. Put the finance team center stage when it comes to reframing long-term value and nonfinancial reporting
Every day, CFOs perform a difficult balancing act in which they optimize and protect today’s value while also exploring new growth and long-term value. But the way in which organizations define, demonstrate and measure how they create value is changing, with many shifting from a focus on short-term to long-term value strategies. This means CFOs should seek to lead the development of a value framework that allows the organization to measure and communicate not only financial value but also other areas, such as consumer, human and social value.
CFOs should also aim to put the finance team in a more central role in building out the connection between the tangible and intangible assets contributing to long-term value creation. This involves establishing which KPIs are material to long-term value – both financial and nonfinancial. To achieve this, CFOs should look to promote closer collaboration between the teams involved in financial reporting and those involved in nonfinancial performance reporting, helping to instill discipline into nonfinancial reporting processes and controls to build confidence and trust in the numbers.
3. Provide the open finance function with a focus on trusted technology transformation and a new talent profile
New and innovative technologies that are capable of producing forward-looking and predictive intelligence – and that have trust built into them, both in terms of cybersecurity and data confidence – are likely to form a core part of the future finance function. But CFOs should also consider their talent base and partnerships, as well as their technology platforms and applications. As markets become more fluid in the future, talent will likely also become more fluid. The leading and brightest finance people will probably choose to build their affiliations with organizations that can develop their skills. Developing a future talent strategy for the function – based on continuous and dynamic learning – will likely be important to earning the long-term loyalty and commitment of creative and talented finance professionals while meeting the challenges of constant change and disruption ahead.