Today’s CEOs expect their finance chiefs to be strategic partners, growth champions, and masters of best practices. Over the past decade, CFO responsibilities have widened to include managing the company’s business model and overseeing the effective allocation of capital. At the same time, though, nearly half of CFOs surveyed in our CFO Indicator Q2 2016 report said their teams are already working up to 50 hours per week.
So how can busy CFOs maintain their traditional duties while also serving as agents of change in their organization? Here are six questions to keep top of mind as you strive to bring the most strategic value to your business.
Strategic CFOs aren’t only eyeing revenue and spending—they have an eye on operational metrics as well. Take the case of Google CFO Ruth Porat, who joined the company from Morgan Stanley in May 2015 and made an immediate impact by pumping the brakes on Google’s spending. Porat’s effort to prevent Google’s operational expenses from ballooning impressed investors and sent the stock soaring.
The lesson is clear: No company, not even Google—which posted nearly $70 billion in ad revenue last year—can avoid fiscal discipline. Google’s expense management is key to its long-term success, because online advertising competitors are racing to steal its revenue. As such, Porat and her team regularly urge Google’s business units to bring their spending and earnings in line. “Ruth is approachable and warm, but she is persistent in what she wants—and she asks direct questions,” an anonymous employee told Fortune.
An Accenture study found that the No. 1 area of needed improvement for finance leaders was communication. That’s a big problem when CEOs need their finance chiefs to be more involved in strategy and essentially act as a COO, monitoring the entire company to ensure resources are efficiently deployed. Businesses cannot operate well in silos. Make sure you’re meeting consistently with every department, from HR and IT to customer service and sales.
Giving budget managers more access to the financial data, via cloud tools and dashboards, means your team isn’t drowning in requests for information—and you’ll have better buy-in from departments during the budget planning process. “I suspect that most senior corporate executives—especially those in finance—fail to appreciate the value of self-service reporting,” wrote Robert Kugel, senior vice president and research director at business tech firm Ventana Research. “It frees up the considerable resources organizations collectively waste on unproductive work, and it increases responsiveness and agility of the company as a whole.”
Once you’ve taken a holistic look at your company and established regular forecasts, you need to really drill down to ensure that individuals and teams are committed to the goals you’ve created. Employee reviews and team evaluations need to be tied to an organization’s financial goals. That means breaking down big goals by using scorecards or dashboards to track progress, which keeps team members motivated.
Gathering data is a time sink, and it robs your team of the time to think strategically. That’s particularly true if you’re a company dealing with multiple currencies, multiple regions, or multiple branches, where data has to be pulled from numerous sources and then possibly converted and verified. Automation also helps you see the big picture—and possible problems—more clearly. “Automating and consolidating business processes gives us invaluable, real-time insight into spending, policy adherence, and potential abuse,” wrote Ted Pastva, CFO at Philadelphia’s Archer Investment Management Solutions and a former finance team member at food delivery service Seamless.
Tactical finance leaders get bogged down in the past, focusing retrospectively on whether the company hit its budget goals. But strategic CFOs know they need to be able to look around corners to understand their businesses’ future. According to our CFO Indicator Q2 2016 survey, 44% of CFOs say predictive analysis, strategic modeling, and answering what-if scenarios are critical. They’re not just interested in mitigating risks as they occur, but in proactively measuring risks and offering strategies for turning them into opportunities. How do you ensure you’re looking ahead?
It all comes down to process and tools: Make sure you’ve got clearly defined processes and procedures that allow you to look at the past and present, and bring that into a clear picture of where the company is headed in the future. Ensure you have the right tools to allow flexibility in modeling a continuous and comprehensive financial forecast.