The New-Age CFO And His Many Avatars

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The New-Age CFO And His Many Avatars
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As the one person in the organisation who has
intimate knowledge of both the past performance
and the expected future growth, it becomes his
responsibility not only to steer the company
towards a better future but also be able to
provide a transparent, big picture view of the
future, to internal stakeholders, customers and
investors.
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Smart Performance
There has been a shift in measuring performance
from profits to profitability, earnings to
economic value and so on. The focus is on
creating value which comes from both increased
sales, driving better margins, increased
efficiencies in operations among others, which
improves stakeholder confidence and builds
company valuations. Smart performance would,
therefore, mean looking constantly for
opportunities to improve economic profits for the
company, both inside (operational productivity)
and outside (sales). Smart performing companies
and their CFOs are identifying, recording,
measuring, comparing and finding ways to improve
scores on the short- and long-term value and
growth metrics by working on
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Processes and Systems
One of the challenges that companies face is to
constantly look at improving each of their key
processes, be it sales, operations and HR . The
CFO plays an extremely important role in defining
the key metrics, and more importantly, tracking
them on a consistent basis, which not just helps
in measuring business performance but also bring
out possible areas where process improvements are
possible. The need to evaluate and implement
systems, particularly IT systems that cut across
functions and integrate them is a role that most
CFOs are involved with. The CFOs input in the
selection, design and implementation of an
integrated system (ERP) cannot be emphasised
more. In that sense, the CFO is only next to the
CEO in terms of importance within the
organisation.
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Vision Alignment And Relentless Execution
Alignment of thought process and being able to
articulate the companys vision are paramount for
a good CFO. The CFO also needs to have a strong
buy-in to the CEO/companys strategy and should
also play the role as an implementer of the
thought process/strategy to the hilt.
Increasingly, CFOs are playing a key role in
developing and implementing strategy within their
company, partnering with CEOs to creatively
design growth opportunities for the future.
Successful CFO leadership requires a deeper
understanding of strategy, leadership skills and
an ability to effectively communicate knowledge
to non-financial colleagues.
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Communication
The CFO needs to communicate on an ongoing basis
and also provide an assurance on the direction
and pace of growth. A CFO has got to do the
communication himself/herself as far as possible
so that the intent is not lost or misinterpreted.
Any kind of misinterpretation can have
significant implications on the company
concerned. Regular engagement with the
market/investors and with the analysts is crucial
in building investor confidence. A CFO needs to
work closely with multiple stakeholders.
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Communication
A CFO probably needs to work hard on influencing
others, improving his/her diplomatic and people
management skills. A CFO needs to be a leader,
understand the business dynamics and be familiar
with all the elements of the business as well as
the operating model in order to be able to be the
Quasi CEO or the next in command. In todays
economic scenario, CFOs are increasingly seen as
natural contenders to the CEO position.
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Communication
CFOs can become agents of change, creating
smarter work patterns throughout their
organisation with insights that drive performance
and help achieve better results.
This article has been written by Mr. Deepak
Narayanan, co-founder, MyCFO and has been
published in the Hindu Business Line on August 27
2014.
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