CFOs are Becoming Strategists in These 3 Areas

FEI Daily spoke with Chris Stephenson, managing principal of Product Innovation at Grant Thornton, about a recent survey which revealed just how quickly the CFO role is evolving.

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FEI Daily: In May 2020, 42 percent of CFOs spent as much as half of their time as strategists, a 13-point jump compared to the February 2020 pre-pandemic survey. What are the activities or projects that fall under the “strategist” category?

Chris Stephenson: While the Grant Thornton survey didn’t ask CFOs to identify specific activities, we’ve spoken to many finance leaders to gain an understanding about the ways their roles have evolved. Looking closer at the “strategist” role, several themes emerged.

One is forecast scenario planning. Since the onset of COVID-19, CFOs have seen an increase in the number of forecast-scenario requests, which include inquiries on an array of external factors. Because of this, forecasting activities are much more labor intensive and time consuming.

Another is business and operating model shifts. As organizations work to lower infrastructure and delivery costs, there’s a growing need to go beyond minor changes. This means taking a step back and analyzing the entire operation, which could ultimately result in transformational changes. Today’s CFOs see themselves as a key voice when it comes to assessing options, costs related to these options and leading the organization in a new direction when necessary.

The third is customer engagement. The global pandemic has created a tremendous amount of uncertainty with regard to pricing models and customer accommodations. This often results in new terms and agreements, adjusted pricing and restructured contracts, and CFOs regularly lead these efforts.

FEI Daily: 28 percent of finance leaders said the top skill they valued was operations management, which was a 20 percent jump from three months earlier. Is this big jump surprising?

Stephenson: Looking back, the answer would be no. That’s because many organizations were forced to change operations almost overnight. For several businesses, this meant shifting from an on-site to a remote workplace in the short term. Long term, decision makers have been focused on identifying strategies to operate with less revenue. To accomplish these goals, it’s vitally important for leaders to lean into operations-management skills. The jump from February to May was significant, though, and it will be interesting to see CFOs perceptions in the future. We expect operations-management skills will continue to be prioritized beyond the pandemic.

FEI Daily: How should finance candidates market themselves with this information in mind?

Stephenson: This is a great question. In addition to being able to delegate many accounting functions to a deep bench of experts, CFOs indicated that they value those team members who can help scale and automate operations.  For finance candidates looking to market themselves, I would encourage them to be very deliberate on the skills they have mastered and tie these to past experiences when they’ve helped organizations scale and automate. By working these experiences into a resume and job application, this will demonstrate the candidate’s flexibility, willingness to adapt work styles and help them differentiate themselves during this period of uncertainty.

FEI Daily: Do you predict operations management will continue to be a highly valuable skill?

Stephenson: Yes, I do.  Establishing new business models is just one key element of operations management. The second part is scaling the new model with an emphasis on automation. CFOs will continue to push for both in regard to operations management.

FEI Daily: In what other ways are CFOs stepping up to the plate?

Stephenson: As you would expect, many organizations are rewriting business models, and CFOs have been heavily involved in this process. CFOs have been charged with modeling updated business plans, forecasting the impact of key changes, adjusting budgets and negotiating new supplier and seller contracts.  CFOs are also getting more involved in the planning stages of these business-model changes with the full C-suite team. 

FEI Daily: Is this the future of the CFO?

Stephenson: The initial reaction to the global pandemic likely resulted in an overcorrection of CFOs’ time allocation, with more time dedicated to strategy and change-agent responsibilities. However, this allocation will likely work its way back toward the pre-pandemic numbers. That said, there’s another possibility that the strategy and change-agent roles have shifted permanently, which would mean the CFOs’ guardian and transactional responsibilities have permanently decreased. This doesn’t necessarily translate to a decrease in transactions or exposure to risk. Rather, we see this time shift as a catalyst for CFOs to delegate, outsource and automate because the crises has demonstrated finance leaders’ value to the organization when they spend more time on the strategic needs.