8 minute read 3 Nov 2020
businessman sitting on stairs using laptop

How the CFO can balance competing demands and drive future growth

Authors
Myles Corson

EY Global and Americas Strategy and Markets Leader, Financial Accounting Advisory Services

Supporter of finance leaders and functions of today and tomorrow. Global citizen. Podcast host. Curious mind. Father of two energetic boys.

Tony Klimas

Partner, Business Consulting Finance, Ernst & Young LLP

Focused on bringing the best we have to offer to CFOs and other finance leaders.

Local contact

EY MENA Financial Accounting Advisory Services Leader

Passionate about our people, clients and communities. Inspired by megatrends, innovation and global transformations. Advocate for finance 4.0, sustainable growth, trust and long-term value.

8 minute read 3 Nov 2020

CFOs should evolve and become inspirational agents for change to drive organizational transformation.

Three questions to ask
  • What are the different perceptions of the CFO role and the priorities for the finance function?
  • How will CFOs balance their existing role while reimaging the finance function?
  • As CFOs look to drive long-term value, how will they balance it with the drive for digital innovation?

The EY 2020 DNA of the CFO survey explores how the CFO role is being transformed, and the steps finance leaders can take to embrace the disruption, shape their role and build the future finance function. This data insights article offers a deeper look into the data behind the DNA of the CFO survey and lets you explore the perspectives of more than 800 CFOs and senior finance executives, on these issues. 

To look more deeply at how different CFO profiles perceive key aspects of their role and finance priorities, three cohorts were identified as part of the research:

  • CFOs who are inspirational people leaders: working seamlessly across the organization and driving the talent and culture agenda in finance (motivational change agents)
  • CFOs who are digital leaders: driving bold, cohesive and innovative strategies to accelerate the digitization of finance
  • CFOs who are long-term value leaders: leading fundamental change on the measurement and communication of corporate value — from a narrow or short-termism perspective to creating long-term value for multiple stakeholders

The insights in this article have been classified according to these three cohorts to show how the survey respondents who exemplify these three profiles view the long-term future of the CFO role and the finance function, and how their views compare against the overall survey sample. For a more detailed explanation of these groupings, see the “Methodology” section.

The data is grouped under three major themes: 

  1. Balancing the competing demands of the CFO  
  2. Balancing the need to grow, optimize and protect value 
  3. Balancing the potential of talented people with the capabilities of smart machines

Find further information about the EY 2020 DNA of the CFO survey and methodology used to conduct the analysis under “Methodology” at the end of this article. 

1. Balancing the competing demands of the CFO 

The transformation of the CFO role is accelerating as it is disrupted by digital acceleration, increased volatility and intense scrutiny.

Balancing competing demands

Finance leaders may be enthusiastic about the challenges ahead but they should look at how they balance competing demands and reimagine their teams.

Note: this includes only respondents who “strongly agreed” with the statement and does not include those who “agreed”.

Driving the C-suite agenda

Trust is likely to be critical in creating and maintaining effective C-suite relationships, but a significant number of respondents say they do not have a strong partnership with their peers.

Balancing the old and the new

As the adoption of digital technologies continues to accelerate and organizations look to drive business model innovation, CFOs are likely to be increasingly involved in tech-focused mergers and acquisitions (M&As) and ecosystem development.

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2. Balancing the need to grow, optimize and protect value

Growing value

CFOs should look to balance long-term value with demands for short-term results, and drive performance against purpose.

Reinventing corporate reporting

As organizations move toward driving long-term value for multiple stakeholders, they should look at how performance is measured and communicated.

Optimizing value

CFOs are deeply involved in driving enterprise-wide efficiency and effectiveness, including adoption of new technologies such as artificial intelligence (AI).

Protecting value

As CFOs look to protect value, their focus should be on balancing the drive for digital innovation and the ability to manage digital risk.


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3. Balancing the potential of talented people with the capabilities of smart machines

Finance 2025: the open finance function

In the future, finance is likely to become more open as it works as part of an extended ecosystem, with deeper collaboration and a more fluid operating model that extends beyond the enterprise’s four walls.

Finance culture shift

Finance leaders are prioritizing culture change as they see it as a key driver toward their ambitions for the future of the finance function.

Rewiring finance skills

Many finance roles are under significant threat of displacement by automation and AI over the next three years.

Accelerating finance digitization

CFOs should look to accelerate the digitization of finance if they are going to turn data into a competitive advantage.

  • Methodology

    More than 800 CFOs, finance directors (FDs) and other senior finance executives were surveyed to understand how the CFO role is changing, and what the future holds for both the role and the finance function. Including divisional and regional finance leaders, more than a quarter (27%) of them were operating as Group CFO or Group FD. Respondents were split across three regions: the Americas, Asia-Pacific, and EMEIA — including Europe, the Middle East, India and Africa. 

    The respondents were from across 14 sectors: advanced manufacturing & mobility, consumer, government & public sector, insurance, oil & gas, private equity, technology media & entertainment telecommunications (TMT), banking & capital markets, financial services, health sciences & wellness, mining & metals, power & utilities, real estate hospitality & construction and wealth & asset management. 

    The three cohorts were established by segmenting the respondents based on a number of key questions, for example:

    • “Digital leaders” considered it extremely important for CFOs to spend time with technology start-ups.
    •  “Long-term value leaders” had a particularly strong belief that CFOs should be seen as the primary stewards of long-term value.
    •  “People leaders” were focused on people-oriented “right-brain” skills (e.g., creativity and emotional awareness) and culture change in finance.

Summary

The role of the CFO is unrecognizable from a decade ago, but the pace of change in this key leadership position continues to accelerate. Successful CFOs are likely to be those who can balance traditional mandates with new ones, protect value today while driving future growth, and combine the potential of talented people with the capabilities of smart machines.

About this article

Authors
Myles Corson

EY Global and Americas Strategy and Markets Leader, Financial Accounting Advisory Services

Supporter of finance leaders and functions of today and tomorrow. Global citizen. Podcast host. Curious mind. Father of two energetic boys.

Tony Klimas

Partner, Business Consulting Finance, Ernst & Young LLP

Focused on bringing the best we have to offer to CFOs and other finance leaders.

Local contact

EY MENA Financial Accounting Advisory Services Leader

Passionate about our people, clients and communities. Inspired by megatrends, innovation and global transformations. Advocate for finance 4.0, sustainable growth, trust and long-term value.