The post-pandemic world, when it arrives, will transform many aspects of business as usual. As a result, CEOs will turn to finance leaders who not only have accounting experience, but also wider operational backgrounds and a broader mix of business experience.
2020年一直是社会、政治和economically transformational. Businesses have never before faced complete shutdowns that forced them to change where and how they operate. Yet, every challenge brings with it opportunity. It could be argued that there has never been a more opportune time for the office of finance to have an impact, with CEOs increasingly looking to the finance function to help shape business direction and strategy.
Once considered a numbers-only role, finance is now balancing traditional responsibilities with growing demand for data-driven analysis and insights that support growth and strategy. All of this is happening against a backdrop of rapidly changing business and regulatory environments.
Such forces are redefining the role of the chief financial officer (CFO) and other key positions, such as the controller, financial planning and analysis (FP&A) leader, treasurer, and auditor. Beyond the traditional accounting career path followed by most finance leaders, what skill sets, knowledge, areas of focus, and business relationship-building skills will the office of finance need to master to become tomorrow’s finance leaders? In this article, we take a look at the emerging, and some more traditional, skills finance needs if it is to become the strategic guide the C-suite requires.
As the remit of finance has shifted and widened, so too has the complexity of key areas, such as treasury management, tax, and auditing. This has increased the need for broader ranges of expertise and new skills. Finance leaders today often bear responsibility for areas such as risk management, and they watch over IT and other key business functions. Balancing the books is no longer the primary function for finance.
The term “new normal” may have become a buzz phrase, but the post-pandemic world, when it arrives, will transform many aspects of business as usual. As a result, CEOs will turn to finance leaders who not only have accounting experience, but also wider operational backgrounds and a broader mix of business experience.
The changing skills trend was clear from data in a study from organizational consulting firmKorn Ferrythat found at the 1,000 largest U.S. public companies, the portion of CFOs who are certified public accountants fell to about 36% last year, down from nearly 50% in 2014.
The same study also found that 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.
Diversification seems to be the key word when it comes to the skill sets needed by finance professionals. CEOs have not turned their backs on candidates from accounting backgrounds when choosing finance leaders for their organizations—they just require a broader range of capabilities.
“The person in that position just needs to have an evolving skill set, regardless of their initial training,” said Bob Ryan, an executive adviser at Shields Meneley Partners, a career-transition firm that advises executives,to theWall Street Journal.
Access to data and actionable insights are now fundamental to business success and helping companies identify new market opportunities, improve customer experiences, drive business planning, and support change and innovation. CEOs are looking to CFOs and finance teams to deliver analytics and insights that support strategy and decision making.
CFOs and finance teams will need to understand how to harness data—beyond just the financial numbers—to tell a business story that explains context and the reason behind a decision, and answers “what if” questions.
Dr. Ilya Strebulaev, professor of finance at Stanford University, believes that data expertise will be critical. “We now live in a sea of data and have the technology to evaluate that data and make decisions about consumers, competitors, markets, and much more,” he says. “CFOs must understand how to use all of this data—not just financial data—to understand the business and drive decisions. The companies that don’t won’t survive.”
Technology will play an important role in the ability to make data timely, accessible, and relevant. New cloud-basedfinancial management systems, in-memory databases, visualization, and mobility are enabling finance leaders to move beyond just analyzing historical financial data to accessing real-time insights about business performance. Even better, it’s making it easier to deliver these insights to other business leaders, further strengthening those partnerships.
Looking ahead, finance teams will increasingly use advanced analytics to run predictive models and develop better forecasts. Understanding technology and systems—and whether they are capable of enabling greater efficiencies, agility, and insights—will be critical.
Robynne Sisco, Workday co-president and CFO, agrees. She explained, “If I think about tomorrow’s finance leaders and their functions, they will need to think about how they are going to leverage technology to change the way they operate. We want to see finance spending less time on recording and verifying the numbers, and more time making the data connections and explaining the implications to the business—applying the finance lens on decision-making.”
Finance’s journey to become a more strategic function will depend a great deal on its ability to find the skills to allow it to embrace digital technologies, such as artificial intelligence and machine learning. That requires a shift to more technical skills and better links with IT leaders to bring together the two functions more effectively.
CEOs are looking to CFOs and finance teams to deliver analytics and insights that support strategy and decision making.
The importance of CFO partnerships with the CIO is clear from ACCA’s / PwC’s 2020 report “Finance Insights – Reimagined” that calls out the importance of collaboration between finance leaders and those with the remit for information management and the technology that underpins it. “Clearly, the CFO has a significant role to play in the management of data across the entity. The relationship between the CFO and those responsible for data and information technology is key. This is certainly an area that is evolving but one that CFOs of the future ignore at their peril,” the report states.
Stanford University’s Strebulaev emphasizes the importance of the CFO-CIO partnership in creating a more data-driven organization, but says it will require learning how to better understand each other. Working more closely together, they can also evaluate what technologies and financial systems are required to support CFOs and their teams’ expanded responsibilities.
“CFOs need to partner closely with CIOs on this data-driven revolution and help them understand what kind of data they need,” Strebulaev says. “The challenge in the past has been that they often speak different languages, so improving that communication channel will be important.”
It’s interesting that beyond finance and technical skills, there is a desire and need for finance leaders to bring ethics and trust to the table. According to the report “The CFO of the Future” from the Association of Chartered Certified Accountants (ACCA) and the Institute of Management Accountants (IMA), the ability to apply an ethical lens is a strong attribute of the CFO, and the finance community in general. In the study, Gwen van Berne of RIPE NCC commented that, “Ethical standards are important and will become more and more prominent for the CFO as it is an important element in the storytelling. You need to be able to defend how you are making money and what kind of key performance drivers you are using to drive your business.”
This school of thought is backed up by Gina Mastantuono, CFO, ServiceNow, whowrote in herForbesblog, “Financial and business expertise are table stakes. It’s interpersonal skills, such as empathy, curiosity, courage, and creativity combined with business acumen, that takes a finance organization from an essential function to a strategic business partner.”
Given the pace of change and level of disruption experienced, a failure to develop appropriate skills poses a serious threat to finance teams. In PwC’s “Finance Insights – Reimagined” study, more than half (55%) of survey respondents said their role could be obsolete within five years without appropriate skills development. Fortunately, reskilling and addressing such gaps are becoming a priority for the function. PwC’s research found that 17% said it’s an issue they’re actively working on now, with a further 15% planning to do so.
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