The need for nimbleness
While the trend of CFOs going from the back office to the front office has been snowballing over time, the current global public health crisis has emphasized the need for CFOs to be more than financial leaders. “It’s almost ideal now to have a businessperson who happens to have a strong finance background,” says Barry Toren, North America Leader of the Financial Officers practice. “They need to have a nimbleness and an ability to deal with ambiguity.” Indeed, the Korn Ferry survey showed that the two items keeping CFOs up at night were organizational alignment (23%) and the need to align finance with overall business strategy (13%).
A dynamic and evolving relationship
It’s no surprise that CFOs and CEOs work closely together—96% of CFOs said they sit on the executive committee and 94% report directly to the CEO. Despite this close working relationship, CFOs have expressed a desire for even tighter communication with their CEOs: 34% said greater alignment on strategic initiatives would improve their relationship with the CEO, while more than a quarter said greater communication would improve their relationship.
“CFOs need to evolve with the changing role of the CEO,” Toren says. “If the CEO is becoming more externally facing, CFOs need to elevate and become an enterprise leader. If the CEO is a functional leader, CFOs need to be a strategic leader.”
Wanted: Strategy and risk skills
Almost half (45%) of the CFOs surveyed said the two capabilities most critical to the future of the finance function were operational information (such as reporting and analytics), and strategy enablement—both beating out more specialized finance skills.
CFO Action Plan
- Deal with cash preservation concerns
- Weigh need for furloughs versus layoffs
- Simplify communication to make it often and open with all stakeholders
- Look at what can be written off as responses to COVID-19 and what may need to be longer-lasting decisions
- Reassess company investments
- Revisit company budgeting and forecasting
- Consider strategies going forward, including M&A, growth, or course corrections
- Really understand at the top what the five-year plan looks like
- Consider whether coronavirus pivots are something that need to be adapted as part of the path going forward