In part two of this blog series, we continue to look at the most important skills and capabilities required of future CFOs, based on multiple studies and interviews with finance experts and practitioners.
A big part of the future CFO role will be not only delivering data, but providing meaningful context for what that data means to multiple stakeholders, many of whom don’t have finance backgrounds. Future finance leaders should seek out opportunities in their organizations to work with different stakeholders and improve their communication skills.
This is new territory for many CFOs, who until now have typically worked behind the scenes. Dr. Ilya Strebulaev, professor of finance at Stanford University, started The Emerging CFO: Strategic Financial Leadership Program to teach current and future CFOs the skills needed to be successful today and in the future. “One of the biggest challenges I’ve seen CFOs deal with is communication skills. CFOs increasingly have to present data to people with non-financial backgrounds, and many weren’t trained on how to do this,” he says.
Strong communication skills are also important for building strong relationships in the organization as the CFO takes on more leadership responsibility.
CFOs are working in a time of unparalleled business change and disruption. The CFO and finance teams of the future will need to adapt quickly to change, whether it’s supporting their company’s ability to move into a new market, comply with new regulations, or create a new business model.
CEOs are also looking to CFOs to help drive innovation and transformation within their organizations. According to KPMG’s “The View from the Top” report, one out of three CEOs say experience with transformation is one of the most important attributes for a CFO.
Strebulaev also views innovation as one of the most critical areas of focus for future CFOs. “We are living in an era of disruption and CFOs need to be thinking of two things: How do I make sure that my company is innovating and staying on top of its industry and what is happening when the company is disrupted—how is this impacting the business and culture?”
Global experience is now regarded as the most important attribute a CFO can possess, according to a KPMG study.
As leading champions of innovation in their organizations, CFOs need to understand how disruption can impact business models, and be able to assess risk and financial results to determine where to put investment dollars in innovation. Providing data and insights that can help identify opportunities for innovation and inform strategies is also important.
The CFO of the future faces an increasingly complex global economy, with high-growth emerging markets, developed markets, and continued volatility in the financial markets all impacting business priorities and strategies. Having global experience will be a necessity. In fact, global experience is now regarded as the most important attribute a CFO can possess, according to KPMG’s “The View from the Top” report.
Understanding the business through a global lens will be critical to developing the right growth strategies, especially when it comes to expanding into new markets. According to the report “The Changing Role of the CFO,” from the Association of Chartered Certified Accountants (ACCA) and the Institute of Management Accountants (IMA), “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.”
To prepare, future finance leaders should look for opportunities to work in both developed and emerging markets, and build relationships with peers across borders.
There are other critical skills and capabilities that are important today and will continue to be important for the future CFO role, including risk management experience and the ability to navigate the increasingly complex regulatory environment.
Yet as their role grows in breadth to take on less traditional responsibilities, CFOs should continue their personal and professional development and take the initiative to develop new skills and capabilities that might not have been as important in the past. Preparation now will play a necessary role in future success.
(For a more in-depth look at this topic, read “The CFO of the Future.” You can also learn more in the video, “Work Talk Episode 5: Tech Trends Impacting the CFO.”)