From CFO to Chief Value Officer: A Strategic Evolution

In this article we discuss:

• The Evolving Landscape: Why the CVO Is Essential
• The 4 Core Competencies of a Chief Value Officer
• The CVO’s Role in Driving Strategic Transformation
• Transitioning to a CVO: A Roadmap for Success

Rapid technological advancements, intensified global competition, and growing stakeholder demands have made the need for a more strategic and forward-thinking finance leader clearer than ever. Now, a successful CFO must transcend traditional financial management expectations and become a driving force behind value creation, essentially transforming into a chief value officer.

The CVO combines technical skills and financial expertise to partner with the business and monitor performance of both financial and nonfinancial “value markers,” according to industry group AICPA & CIMA.

“We’re no longer report generators. We want to move toward being value generators,” says Ash Noah, vice president and managing director, learning, education, and development, at AICPA & CIMA. “The CFO is the new CVO: the chief value officer.”

The Evolving Landscape: Why the CVO Is Essential

Automation and AI have already begun transforming business processes and creating new opportunities, while globalization has intensified competition, requiring organizations to improve their agility. Meanwhile, stakeholder pressure from investors focused on long-term value creation has increased significantly. These dynamic forces demand a new breed of finance leader, one who can not only manage finances but also contribute strategically to the overall success of the business.

The traditional CFO—often perceived as a gatekeeper focused on cost controls and financial reporting—must give way to the CVO, a strategic partner to the business who actively participates in developing sustainable growth. The CVO possesses a broader perspective, deeper business acumen, and a proactive approach to value generation. They’re moving beyond reporting on the past to also actively shaping the future.

The 4 Core Competencies of a Chief Value Officer

The transition from CFO to CVO requires a conscious effort to develop a specific set of core competencies:

1. Strategic Vision and Foresight

The CVO must possess a clear and compelling vision for the organization’s future. Moving beyond simply analyzing financial statements and developing a deep understanding of the business, its industry, and its competitive landscape, the CVO must also be able to anticipate future trends and disruptions, using tools like scenario planning to prepare the organization for uncertainty. Crucially, they must translate data insights into actionable strategies, connecting financial performance to overall business goals and ensuring resources are allocated effectively to support strategic priorities.

2. Data Leadership and Analytical Prowess

Today, data is a strategic asset. The CVO must not just understand data but be able to visualize how it can be used for predictive and prescriptive analytics. They must be able to identify key data sources and understand how to interpret complex data sets. Building a data-driven culture within the finance team and across the organization is also essential. This involves investing in the right data infrastructure, analytics tools, and talent. The CVO must champion data literacy and empower employees to use data effectively in their decision-making. CFO.com notes that finance leaders must prioritize “how to more effectively utilize their data.”

3. Collaborative Leadership and Communication

The CVO is a collaborative leader who builds strong relationships with key stakeholders across the organization, including the CEO, the board of directors, and other department heads. By necessity, the CVO is also a storyteller, able to translate complex financial information into clear, concise, and persuasive narratives that resonate with diverse audiences. They must be skilled at building consensus, driving cross-functional alignment, and ensuring that all departments are working toward common goals.

4. Value Creation and Performance Management

The CVO’s core responsibility is to drive value creation. First, it’s important to define value for the organization—whether it be shareholder value, customer value, or societal value—and related KPIs. The next-generation finance leader must track progress, identify areas for improvement, and drive continuous improvement initiatives across the organization. This involves not only financial metrics but also non-financial metrics that capture the broader impact of the organization’s activities.

The CVO’s Role in Driving Strategic Transformation

“Today’s CFOs are active business partners alongside the CEO and others, working closely with these executives to drive large-scale and high-impact organizational initiatives,” the Association for Finance Professionals (AFP) says. “They aren’t just required to curtail overspending and safeguard funds; CFOs are expected to drive strategic planning, business development, digital transformation, and innovation.”

The CVO plays a crucial role in driving strategic transformation within organizations:

Leading the Digital Transformation: AI has already been a game changer, and CFOs have the opportunity to lead their teams to help them embrace the technology in order to realize its full potential. Workday CFO Zane Rowe has said that AI is “going to be augmenting a lot of what we do today—and it should be a leverage point to drive more value no matter where you fall within an org chart.”

Fostering Innovation: Innovation is essential for long-term success. CVOs play a key role in fostering innovation by providing the necessary funding, resources, and strategic guidance. They create a culture that encourages experimentation and risk-taking, while also ensuring that innovation initiatives are aligned with the organization’s overall strategy.

Driving Sustainable Growth: CVOs understand that sustainable growth requires a long-term perspective. They balance the need for short-term financial performance with the need to create long-term value, while also considering environmental, social, and governance (ESG) factors that can impact the organization’s long-term sustainability and integrate these factors into their decision-making.

Managing Risk and Uncertainty: In today’s business climate, risk management is more critical than ever. CVOs play a central role in identifying and mitigating risks, both financial and operational. They develop robust risk-management frameworks and ensure that the organization is prepared for a range of potential scenarios.

Transitioning to a CVO: A Roadmap for Success

The journey from CFO to CVO is a continuous process that requires dedication and commitment. Here are some key steps for CFOs looking to level up:

• Develop Key Skills: Focus on developing the core competencies of a CVO, including strategic thinking, data analysis, communication, and leadership. Seek out opportunities to expand your knowledge and experience in these areas.
• Build a Strong Team: Invest in talent development and create a culture of collaboration within the finance team. Empower your team members to take on new challenges and develop their skills.
• Embrace Technology: Champion the adoption of new technologies that can support data-driven decision-making and improve efficiency. Stay up-to-date on the latest technological advancements and their potential applications in finance. Nearly one-quarter (24%) of finance leaders view the right technology as the most important element to digital transformation, according to a Workday global survey.
• Communicate Your Value: Actively communicate your contributions to the organization and demonstrate your strategic impact. Showcase how you are driving value creation and contributing to the overall success of the business.

The role of the CFO is evolving rapidly, and the rise of the CVO is a testament to this transformation. The CVO goes beyond the role of a financial expert to become a strategic partner, a data leader, a collaborative figure, and a driver of value creation.

By embracing the core competencies and actively driving strategic transformation, CFOs can position themselves for success in the dynamic business landscape of the future. The journey requires a commitment to continuous learning, a willingness to embrace change, and a focus on developing both technical and leadership skills. But the long-term value propositions are significant, both for the individual CFO and for the organizations they lead.