So there ’ s a real role for CFO ’ s to look at commercial drivers and how the business responds to them , rather than making judgements not based on fact .”
To achieve these insights , Meacock says the CFO must position himself or herself as more than a number cruncher , but as someone with a deep understanding of business as a whole .
“ A lot of organisations are now appointing a financial controller who is taking on much of the old role of the CFO , which is starting to push the CFO up the organisation and take a more strategic position .” Meacock adds .
CFO coach Brendan Sheehan from White Squires agrees being able to strategically communicate across the business is key . To aid strategic development and implementation , he says a superior understanding of technology is not paramount .
“ CFOs have to use technology in a way that is effective for growth and decision making .” he says . Behind this must be a sound grasp of the data the organisations produces , as well as information from external sources . “ They have to correlate the two to pull out meaningful , insightful information that supports decisions .” says Sheehan .
According to Sheehan , understanding the essence of the business model , as well as gaining an appreciation for other business models , is also important for the CFO ’ s input into strategic thinking .
Responding to a world of unknowns
Making a meaningful contribution to strategy can be difficult in a world where there are many unknown variables , such as economic and political factors CFO ’ s must navigate .
One approach Meacock suggest is for CFO ’ s to engage in detailed scenario planning . This involves brainstorming a range of likely situations that could impact the company , and then ranking them in order from very likely , to likely , to unlikely . strategic direction of the organisation .” Meacock explains .
Overall , says Meacock , there ’ s a real opportunity for CFO ’ s to make a greater contribution to strategy .
Certainly in larger organisations , we ’ re seeing a lot more Chief Strategy Officers than in the past , which is changing the C-suite dynamic . Some chief strategy officers reports to the CFO , others reports to the CEO . So how the CFO works in conjunction with the chief strategy officer is an important dynamic .”
Meacock suggest if the Chief Strategy Officer has the same level of seniority as the CFO , both should be focused on connecting the corporate strategy to the financial plan .
“ There ’ s the potential for a very good partnership between the CFO , CSO and CEO , which is something that ’ s a new dynamic in organisations ,” he adds .
Finally , Sheehan says it ’ s essential for the CFO to think strategically about HR planning in the finance team and in the wider business to effect strategy .
“ That ability to think strategically about human resource planning is really important ,” says Sheehan . “ This requires emotional intelligence , and an ability to read people and communicate effectively around what needs to be done . That ’ s really important to get the best out of people .”
“ CFO ’ s must get a real understanding of the skills and competencies required to do a particular job , and make sure the people being interviewed and are being brought in to do that job have those skills and competencies ,” he adds . They have to have the emotional intelligence and empathy with people in the organisation to get decisions made and act on them .”
Ultimately , if CFOs are able to influence planning across the business and gain access to accurate data to make decisions , they can be positioned to make a meaningful contribution to strategy , and potentially elevate themselves beyond the numbers .
“ The CFO should play a role modelling these scenarios . You are never going to predict everything that ’ s likely to happen to the company .” he says . “ But by understanding the various scenarios that can play out , you ’ ll really understand in a much better way how the business will respond , which starts to shape the
34 itSMFI Forum Focus — June 2017