In its third year running, Programic Asia’s CFO Leadership Beyond Finance Program culminated in a 2-day MasterClass of well-attended sessions at The Holiday Inn Mumbai (Feb 20-21, 2017) followed by Holiday Inn Delhi (Feb 22-23, 2017). The forum was attended by high ranking CFOs and financial heads. Sectors represented included Pharmaceutical, Media & communication, banking, Research & Analytics, Manufacturing, Information Technology, Energy, Financial Institution, Engineering, Non Government Pvt Foundation, Management Consulting & Retail. This Program equips senior financial executives with the insights they need to become more effective leaders and better strategic advisors to their CEOs and Boards of Directors. We were privileged to bring together such an esteemed gathering of the heads of finance of the world’s leading brands. The meaningful dialogue and candid exchange of ideas among Fortune 1000 CFOs was a testament to an industry that is evolving more dynamically than ever.
Almost all the attendees agreed that the role of the CFO historically has been one of gate-keeping, primarily around accounting: looking at budgets, looking at what occurred in the past. having said that, our audience concluded that today, the CFO is being asked to play a more proactive role in planning and adding more value to the strategy of the company.
In one of the presentations I heard from the CFO of NAB quote, “We have to change the way we look at things: looking forward more, not backward. We have to look at both non-financial and financial information to make your decisions. You have to be seen to have the right skills to be able to work with your business partner.”
After having running similar sessions in Singapore, Malaysia, Hong Kong and Indonesia, we realised that the crux in India was no different. This change requires a more analytical skillset and also that the CFO have strong communication skills. This includes not only communication and improved analytics, but how to talk and master new communication styles.
Delegates in both cities agreed that CFOs must move beyond financial wizardry to embrace their evolving role as surrogate CEO and corporate strategist. “The role of the CFO has changed over the last ten years. CFOs are now seen as business strategists and partners to CEOs. We are in charge of managing the risk side of the business as well as the opportunity side of the business. Today’s CFO needs to have excellent quantitative skills, people skills and also be a great strategist. They key for a CFO to be successful in the C-Suite is to have the power to persuade. First, to be fact based and be able to make judgment calls based on imperfect information. You’re never going to know everything, but the ability to make intelligent decisions based on imperfect information and analysis is crucial”, said CFO Dentsu Aegis.
The CFO as A STRATEGIST.
One of the sessions around the right fit for the role concluded that today’s CFO needs to have excellent quantitative skills, people skills and also be a great strategist. They key for a CFO to be successful in the C-Suite is to have the power to persuade. First, to be fact based and be able to make judgment calls based on imperfect information. One is never going to know everything, but the ability to make intelligent decisions based on imperfect information and analysis is crucial.
Another excellent session was around the Sources of Power. The power to persuade others to your point of view without making it personal is also very important. The CFO also must have the conviction that, even when short-term actions may be painful, they are aligned with strategy. Finance is very valuable in helping plan the business as opposed to reporting the postmortem of the business.”
Key Takeaways: –
The globalization of businesses has had a significant impact on the role of the CFO and physical set up of the finance function. This will be compounded in the future. Tomorrow’s CFO relationships will be global, and often virtual. The days of off-the-record conversations in the corridor are diminishing.
Businesses are rethinking their business models and strategies. Global experience on the CV for tomorrow’sCFO will be a baseline expectation. The basic building blocks will be awareness and understanding of how different business models play out in particular regions or countries together with the different strategic challenges and opportunities faced.
Tactical issues are one thing – culture and cross-border working relationships are quite another. With finance responsibilities increasingly crossing borders, the CFO needs to navigate through, and embrace a vision for, the finance function that cuts across different cultures, working practices, beliefs, languages and time zones. Global leadership will be the cornerstone of the future CFO’s role.
Tomorrow’s CFO will need to ensure finance is a catalyst for change across the business, driving outcomes that affect long-term business performance, not just short-term finance outcomes or one-off cost reductions. In this respect, there is much more that can be done.
Increasingly CFOs need to act as the perfect partner to the CEO. On the one hand they must support them in bringing strategic decision making to bear, whilst also demonstrating great finance leadership and controllership. They will need to keep an eye on their traditional gatekeeper responsibilities, acting as a voice of caution in the face of poor investment strategies and business decisions that are short term and detrimental to shareholder value in the long run. The balancing of priorities concerning collaboration and independence will be one of the defining attributes of the future finance leader’s role.
Tomorrow’s CFOs will also increasingly need to be good at dealing with the media and at brokering the external relationships that matter for the face of the business. In many senses they will be the face of the corporate brand. They already fill this role with investors, but they will have a broader circle of business relationships, from their traditional partners – the banks, tax authorities, external auditors – through to customers, suppliers, supply chain partners and so on. They will need to embrace and use new media channels.