An Agent of Change in Difficult Circumstances

Radical shifts in business models, technology and talent made the rise of the transformational CFO visible to the corporate world: a financial leader with the skills to build trust throughout the organisation and drive change. Moving forward into 2021, this profile continues to expand once again. To succeed in unprecedented circumstances, today’s CFO requires resilient adaptability, technical finesse and emotional intelligence.


 

KEY TAKEAWAYS

Today’s financial leaders need technical finesse, emotional intelligence and resilient adaptability to navigate an unpredictable landscape. Forwardthinking CFOs are a force of dynamic stability for organisations, planning for potential issues and increasing robustness while integrating productivity gains into the company. Working in close collaboration with the C-suite, CFOs are reinventing business models and steering organisations towards long-term profitability.

  • Resilient CFOs are taking the crisis as an opportunity to face problems head-on and make organisations less vulnerable in the future.
  • In staging the return to post-pandemic work, CFOs need to analyse the risks of different possible scenarios, balancing short-term needs with opportunities for long-term growth.
  • As digitalisation accelerates, CFOs should prepare to invest intelligently in a virtual future while ensuring that they bring everyone on board.

 


The sudden financial challenges brought on by industry shutdowns and mass furlough schemes have put extra pressure on the hard skills of CFOs and their teams. Meanwhile, accelerated digitalisation has led to additional expense, but also opened doors to productivity gains and new business models. Among the C-suite, all eyes are on the CFO’s emotional intelligence and ability to convey understanding of these changes throughout the organisation.

In this rapidly evolving landscape, how can CFOs embrace change and pave the way for organisational growth?

A FORCE OF DYNAMIC STABILITY

According to author Thomas Friedman, “Some of our leaders want to build a wall against the hurricane. And my argument is you have to build an eye that moves with the storm and draws energy from it, but creates a platform of dynamic stability within it. That is the healthy community where people can feel connected, protected and respected.”

CFOs need to provide dynamic stability now more than ever. “Clients are looking for resilience at the centre of the CFO,” agrees Adriana Fraga, Associate Partner Latin America. The ability to take different financial scenarios into account when making decisions is essential. It’s a juggling act: “CFOs must consider economic variables, geographical differences, new business models – and let’s not forget technology. This is their strength,” she adds.

Clients are looking for resilience at the centre of the CFO. CFOs must consider economic variables, geographical differences, new business models – and let’s not forget technology. This is their strength.

-Adriana Fraga, Associate Partner Latin America

With so many short-term and long-term uncertainties, bringing dynamic stability to the business is all about adaptability and reinvention. According to Daniel Yates, Global Head of the Finance Practice, “The best CFOs are using the crisis to instigate change and acceleration – to transform the business, to make it more robust, to future-proof it.”

Resilient CFOs are helping organisations to make a post-pandemic comeback, adapt to digitalisation and chart new paths towards profitability.

MOVING WITH THE EYE OF THE STORM

“No one saw the challenges of last year coming, but some CFOs reacted better,” says Dan Plourde, Partner North America. “That’s who I’m searching for: how are top financial leaders facing the unexpected – and finding windows of opportunity?”

The challenges have been many: from shutdown-induced revenue loss to the tax burdens of furlough schemes, CFOs and their teams are being summoned to analyse and mitigate the impacts of the current crisis. “At the moment, cash is king and balance sheet management is the crown,” says Yates. For CFOs, the challenge is to balance short-term liquidity needs with long-term plans for recovery and profitability.

“Is risk analysis becoming a bigger part of it? I think so,” says Palladino. The hard skills of number-crunching are still key, with risk analysis becoming even more essential in today’s fast-changing context. Smart CFOs are harnessing dynamic risk-modelling tools and portfolio optimisation to build risk-resilient plans and plot new ways forward. Fraga explains, “The CFO must take advantage of the crisis in terms of changing the business model, of divesting, of balance sheet control.”

However, proposing alternatives to the business-as-usual approach requires empathy as well as financial savvy. Today’s CFO needs to be open to diverse ideas, listening to shareholders and learning from other companies. On the other hand, with their nuanced understanding of risks and opportunities, CFOs must be brave enough to go against the grain. “We want someone who’s going to bring different perspectives and different views: someone who will challenge the board and the business,” says Yates.

At the moment, cash is king and balance sheet management is the crown.

-Daniel Yates, Global Head of the Finance Practice

DRIVING DIGITALISATION BUY-IN

The rapid digitalisation of 2020 has added another layer of complexity to the CFO’s role. According to a Deloitte survey, more than 60% of CFOs expect their investments in information technologies for virtual and automated business operations to increase.

Close collaboration with technology leaders has become key for CFOs to identify the best digital solutions in terms of business continuity and productivity. Many digital tools, including remote work environments and online business channels, have been launched and expanded in a short amount of time. The onus is on CFOs to understand what’s working and what can be improved for long-term success, measuring revenue and productivity gains as well as the ongoing costs of supporting digital ecosystems.

As the future becomes increasingly virtual, demand for digitally fluent CFOs is on the rise. But contrary to what clients may think, the best CFO for the job isn’t always one from the tech sector. Fraga points out, “If CFOs come from a tech company, they come from an already digitalised firm. So, that CFO perhaps wouldn’t perceive, at first sight, the associated costs of digitalising an organisation. We’ve seen the demand is higher for CFOs that have collaborated on digital transformation projects inside their organisations, regardless of the sector they come from.”

For CFOs to lead digital transformation, soft skills are just as important as analytical skills. “You could implement the best technology in the world, but if you can’t sell it to the people within your organisation, it will fail. Bring everybody along, and you will get that extra invisible 10–15% of performance,” says Yates.

CHARTING THE PATH TO PROFITABILITY

The transition to a world of remote work has amplified the need for CFOs to build trust throughout the organisation. “It’s leadership by influence, right?” says Palladino. “The CFO is a key part of influencing, from the board of directors down and vice versa.”

You could implement the best technology in the world, but if you can’t sell it to the people within your organisation, it will fail. Bring everybody along, and you will get that extra invisible 10–15% of performance.

-Daniel Yates, Global Head of the Finance Practice

So how can CFOs influence from a distance? Palladino notes, “Reputation, quick decisionmaking, trust and relationships with leadership all help CFOs adapt to the reality of making big decisions remotely.” Emotional intelligence is key, as financial leaders rely on their relationships with the CEO and across the C-suite to steer the business towards profitability.

Reputation, quick decisionmaking, trust and relationships with leadership all help CFOs adapt to the reality of making big decisions remotely.

-Dan Plourde, Partner North America

With a finger on the pulse of the modern global economy, CFOs are vital to creating long-term stability through awareness of and preparation for potential issues. Their task is to safeguard the organisation from vulnerabilities while strengthening sustainable business structures and establishing new avenues of growth aligned with the CEO’s agenda.

The modern CFO is constantly evolving, learning and reinventing. As Yates says, “I know several CFOs who are currently acting as the interim CEO, and given where we are in the economic cycle, it absolutely makes sense. It wouldn’t surprise me if we see even more CFOs stepping into Chief Executive roles, hand in hand with this idea of dynamic stability, of resilience.”


 

KEY TAKEAWAYS

Today’s financial leaders need technical finesse, emotional intelligence and resilient adaptability to navigate an unpredictable landscape. Forward thinking CFOs are a force of dynamic stability for organisations, planning for potential issues and increasing robustness while integrating productivity gains into the company. Working in close collaboration with the C-suite, CFOs are reinventing business models and steering organisations towards long-term profitability.

  • Resilient CFOs are taking the crisis as an opportunity to face problems head-on and make organisations less vulnerable in the future.
  • In staging the return to post-pandemic work, CFOs need to analyse the risks of different possible scenarios, balancing short-term needs with opportunities for long-term growth.
  • As digitalisation accelerates, CFOs should prepare to invest intelligently in a virtual future while ensuring that they bring everyone on board.

 


Contact the Consultants Quoted in this Article

daniel yates

Daniel Yates
Senior Partner
UK

adriana fraga

Adriana Fraga
Associate Partner
Mexico

dan plourde

Dan Plourde
Partner
USA

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