A chief financial officer’s role is constantly evolving. In the past, CFOs were often expected to deal with the intricacies of their company’s financial matters, with little to no communication between them and the other departments.
But this is no longer true; the modern CFO must be accountable and approachable. He must be able to interact with other departments and staff to present actionable, meaningful metrics that help achieve goals. In that regard, the CFO position now carries with it more power than ever — but also lends itself to a far more hands-on approach.
The Proactive CFO
Today’s CFOs will educate themselves on all financial aspects of a business. This allows them to better communicate their needs to their employees and helps identify and resolve potential issues before they become problems.
A CFO should be both transparent and communicative; he should be able to discuss his needs and be open to suggestions. By learning more about how each individual department operates, a CFO can get a more complete vision of the business’s finances and quickly pinpoint areas of improvement.
The Tech-Savvy CFO
Technology has vastly changed the way CFOs interact with their companies. Through improved technology, CFOs can receive continuous, real-time updates on the financial status of their businesses. They can rapidly track financial flags and metrics and diagnose any potential issues.
A modern CFO must be well-versed in the technology that drives the company. Though not the chief information officer, a CFO can still augment his knowledge and skills through the use of finance-related technology.
An accomplished CFO will always look for ways to improve upon an existing system but won’t be able to do so without at least a basic understanding of the networks involved.
The Team-Oriented CFO
CFOs must be able to operate within teams and understand their roles within them. A CFO may no longer be aloof; he cannot be above the day-to-day workings of the business. The more involved a CFO is in the business, the better his results will be. Further, a CFO who is directly involved with the business will inspire more confidence within his workers and improve company culture.
Taking an active approach benefits the CFO as much as it does the business. The CFO should learn from the combined experience and skills of the rest of his team. CFOs may discover new strategies for unresolved issues or may be able to source thoughts and opinions from others.
Ultimately, communication between the CFO and his employees aids the entire company.
The Communicative CFO
Not only must a CFO branch out to improve his contributions to his business, but he should also be skilled in the art of communication. CFOs must be able to explain and implement changes in a way that employees understand, relate to, and support. They need to clearly convey what they need from their employees so they can serve them best — all while managing other financial aspects of the business. In short, the ideal CFO is not only a numbers person, but also a people person.
The Functional CFO
At its core, the position of CFO is still responsible for the clerical, monetary, and risk-management processes of a company, so it only makes sense that a CFO should be detail-oriented and experienced in resource management. Preserving a company’s financials is a tall order. To do it correctly, a CFO should be able to juggle many tasks — from developing and monitoring financial plans to managing different departments to monitoring the company’s investment profile and cash flow.
The role of a CFO is always changing, and it’s absolutely essential for a modern CFO to adapt to the new business environment. Today’s CFO is always on, engaged, and active throughout his business — not holed up in his office sorting through reports. A CFO must be able to communicate well with his teammates, learn from them as needed, and stay abreast of modern technology.
About the Author
Titu Agarwal is an account manager at SUM Innovation. He has a diverse background, which started with a passion for theatre at the West Chester University of Pennsylvania and followed up with a career spanning more than 13 years in stock broking and investment banking. He learnt from the markets and witnessed and grew from some of the biggest blunders of the markets.