I’ve spent a decade and a half working in the world of Finance - across PE and VC investing, management consulting and corporate finance. From a wide-eyed associate consultant during the great recession to a CFO riding the final waves of the post-recession boom in 2019, I believed I had seen most aspects of what the markets can throw at finance teams. But none of that diverse experience prepared me for a pandemic that would reshape our world and radically disrupt how nearly every business operates. But what my experience across boards and executive teams did prepare me for was having the resilience to take a punch, regroup, reassess and rebound quickly. And now, as we face inflation, highly volatile markets and potential economic headwinds, it’s clear that the CFOs who take a creative and nimble approach to operating their businesses will continue to fare better than those taking the more classic, slightly deliberate and conservative approach of even the more “modern” CFOs.
When uncertainty reigns, trailblazing CFOs thrive
Global conflict, inflation, supply chain shortages, tight labor markets - these types of disruptions have been happening for decades. But history has taught us that turbulent times force teams together in urgency and let the brightest of us shine. It’s when we’re challenged in these crucibles that innovation, fresh perspectives and a heavy reliance on innovative uses of data separate those who merely survive from those who can thrive and charge forward once the headwinds shift - or better yet, steal share while your competitors are on the back foot.
Yet when I talk with other finance and accounting executives, everyone is swamped, just trying to keep up with day-to-day deliverables and compliance, not carving out the time and resources to push the envelope. This is the exact opposite of what needs to be done to be well positioned in a volatile, uncertain moment. I propose that if you’re relying on manual financial operations and teams that stick to antiquated modes of thought and execution, you’re well positioned for one thing: to be left behind.
I’m conscious that my aggressive proposal isn’t earth shattering - you’ve heard this perspective in other articles and conference sessions - but I hope my brazen wording does invite a discussion about what a CFO and her or his teams can do to adapt to win in this cycle. In lieu of a TED talk, I’ll offer a short list that I hope will spark interesting and actionable conversations with your teams.
1. Digital transformation to drive decision making is critical to CFO success.
The Office of the CFO has relied on spreadsheets and email for the past 40 years. Yet, for Sales, Marketing and most other teams across the organization, process automation, data analytics, access to real-time insights and other innovations have fundamentally altered how they operate, how fast they act and how accurate their decisions can be.
The digital transformation of Finance and Accounting has created a seismic shift for the CFOs bold enough to embrace it. This shift gives them more time to analyze more data and make better decisions with higher confidence and more speed. If that’s not enough, a modern approach to FP&A brings more agility, which helps you quickly recognize challenges and opportunities, model different scenarios and make those career defining decisions that avert disaster or capitalize on new opportunities.
And yet, for too many CFOs, digital transformation is long overdue. If you don’t have the leading indicators of your business served to you on a daily (at least weekly) basis in a format that you trust, how do you know if you should charge ahead or evaluate trade-offs? And do those leading indicators automatically feed into your rolling financial forecast? Email me if they don’t, you don’t have to live that way!
2. Cyclical finance and accounting processes must be highly automated.
Too many CFOs continue to rely on slow, manual processes for highly repetitive tasks that occur every month. Yes, technology will reduce your reliance on error-prone spreadsheets, but the low-hanging fruit of digital transformation is in the financial processes the Office of the CFO does repeatedly. When was the last time you reimagined those processes, your expectations of the deliverables and the time they take away from more strategic financial activities?
These cyclical, periodic processes—monthly close and consolidations, accruals, A/R dunning, billing, ad hoc reports, board reports, annual or quarterly planning, etc.— are mission critical and consume massive chunks of your teams’ time. And guess what? Your team hates the manual, repetitive elements of this work. The benefits of automation are obvious, but they take time, money and a shift in entrenched mental frameworks to realize. There are always other priorities and bigger initiatives, so you put it off another quarter or year and continue to just get by. The easiest thing to do is accept the status quo.
Trailblazing CFOs haven’t put it off. They have recognized the importance of automation in eliminating slow, mundane, human error prone tasks. If you can cut an eight-day close down to five days, imagine not just the time saved but the strategic impact of giving three full workdays each month back to your teams. They’ll have the opportunity to focus on critical initiatives, learn the levers that drive the business and work side-by-side with the business to model opportunities, respond to questions and provide financial guidance. Now extend those benefits by automating report creation and distribution, cutting hours off every forecast and ad hoc analysis, automatic data collection and more.
3. Your team is and always will be, your superpower.
Whether the recently super tight labor market persists or relents, the Great Resignation pushed professionals to rethink career expectations and CFOs would be wise to reflect on the work their teams are doing and how they are doing it. Is it stimulating? Do they have the right tools and support? Will it attract and retain the best talent? Do they have a path to their career aspirations at your firm?
It is table stakes that top talent wants to be using innovative, current technology that makes them more productive and gives them more time to focus on the strategic, creative and challenging aspects of finance and accounting. Your existing teams share this sentiment - they want to put their expertise to work in guiding key initiatives and raising the financial IQ in every corner of the business.
Automation, challenging and interesting analytical projects and a clear path for career progression are critical to keeping your teams engaged and productive, attracting new talent and better accomplishing your overall goals.
Becoming a Trailblazing CFO
The Golden Age of the CFO tech is unfolding in front of us because so many new, purpose-built technologies are available, finally, for all Finance and Accounting professionals - not just those with massive IT teams at Fortune 500 companies. To be clear, this train has been slowly moving since the 1970s, but it has officially arrived in the form of Finance-owned, intuitive technology that is available and accessible to the masses of finance professionals.
You’re being pushed to drive smarter, faster, more financially intelligent decisions across the business, financial uncertainty is increasing and progressive challengers lurk around every corner. But those factors also put the Office of the CFO to the white-hot center of every business. The only way to win is by putting these finance and accounting technologies to work, taking advantage of this Golden Age to realize more time, insights and confidence.
So where to begin? Set a three-year vision for modernizing Finance and Accounting and start executing against it. Make your modernization a priority equal to those in other areas of the business. Create internal champions of Finance; frame modernization accurately as beneficial to the entire business because Finance and Accounting will serve up more valuable insights, be more responsive to requests and have more time for collaboration. Continually reassess your progress with your team, your CEO and the business as you evolve - be nimble, be humble, adjust when actions aren’t achieving the intended results.
We’re now living in a world where increasing uncertainty is the only certainty. It’s critical you start making the shift to becoming a trailblazing CFO today. If not, at what point do you find your approach obsolete?
