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Co-Pilot of the business: Finance is the new guidance system
The CFO has long been at the right hand of the CEO, and often ends up filling the chief executive’s shoes entirely when it comes time to choose a successor. Oracle’s own Safra Catz is just one example of a CFO who has made the leap. On a wider scale, a recent report found that 55% of FTSE 100 CEOs have a background in finance, while nearly one quarter (23%) are qualified chartered accountants.
This is no real surprise, and in fact the progression is a very logical one. What has changed is that today’s CEOs face a new set of challenges. They operate in markets that are constantly in flux while heading up companies with considerable flatter hierarchies. They are expected to make their organisation disruptive on an industry-wide scale while also fostering a more agile work culture that can support frequent innovation.
It’s crucial that CEOs build an environment that attracts, develops, and retains the best talent.
More so then ever, versatility is the hallmark of a successful chief executive and CFOs who have expanded their thinking beyond finance operations are best prepared to successfully step up into the role. This includes being able to intuitively understand how to lead a mobile and diverse workforce, to “get” the correlation between productivity and employee engagement, and even more importantly how to drive the latter. It’s crucial that CEOs build an environment that attracts, develops, and retains the best talent.
Report Dirving Transformation from Within
This is why the role of the CFO has evolved, as have the expectations of the entire finance department. In particular, they are being asked to get more out of the company’s technology investments. The back office is no longer just a centre for reporting. CFOs and their teams are now tasked with keeping a watchful eye on the entire business and providing the CEO and line of business managers with the resources they need to function at the highest level.
Finance professionals understand this need. Our recent survey, Modern Finance: Driving Transformation from Within, found that more than half (54%) of finance leaders support changing the company’s current finance systems to meet needs for greater productivity and agility. Just as tellingly, 43% support making these changes to respond to a greater need for innovation and fresh thinking.
The push towards ever more flexible technologies in the service of an agile business couldn’t be clearer.
There needs to be more collaboration between finance and IT leaders if the entire company is to truly modernize its way of working.
Another challenge for finance leaders lies in building and maintaining close strategic alliances with other line of business leaders. CEOs have traditionally had excellent people management skills, including the ability to keep colleagues onside even if they occasionally disagree with some of the decisions being made. As the right hand of the chief executive, and in many ways the strategic compass for every department in the business, CFOs are honing their people skills to help align each line of business towards a profitable future.
The ability to do this is supported by cloud-based technologies that allow key decision-makers across the organisation to access relevant information more quickly, and which promote a constant flow of data between the finance department and the rest of the business.
More than half of major organizations are running some cloud applications in their back office, but there needs to be more collaboration between finance and IT leaders if the entire company is to truly modernize its way of working. Those CFOs that are driving closer relationships between lines of business and taking a more open and strategic approach to data are in an ideal position to achieve this and secure their position as leaders in the business.