To keep up with the fast-changing times, modern CFOs require additional skills that were not formerly envisaged in the job description. Hence, to keep on top, the role of today’s CFO goes far beyond just being a financial expert and focusing on balance sheets. So, what skills should a CFO have?
The CFO role has evolved into that of a strategic business partner who understands the company’s business model and knows what’s going on in the different areas of the organization. Accordingly, modern CFOs are no longer merely concerned with the finance function but work together with the company’s CHRO, CEO and CIO to plan, provide insight and ensure that business decisions are underpinned by solid financial criteria.
2. Business Intelligence expertise
Digitalization is crucial to a company’s survival and, therefore, one of the answers to what type of person makes a good CFO is ‘someone comfortable with new technology solutions’. As a result, modern CFOs should embrace data analytics and advocate Business Intelligence tools to enable finance productivity. Indeed, BI know-how to understand the organization’s financial health is essential to planning for future growth and contributing to informed decision support across the company.
3. Leadership and communication skills
If asked what makes a great CFO, the answer would certainly include being a good leader and communicator who can strategically manage the team and assist with key decision-making. Consequently, the role of the modern CFO involves:
- Managing relationships with the team and stakeholders to drive the company forward while balancing finance.
- Actively participating in the recruitment process to ensure that the finance function relies on the right financial controllers.
- Effectively communicating complex information, translating it into clear and accessible terms.
4. Risk management
Mitigating the impact of crises or, better still, being able to prevent them by identifying risks in advance is also among the skills a CFO should have. Indeed, modern CFOs should be prepared to manage risk while the company continues to execute its strategies and initiatives, maintaining strong internal controls and solid financial reporting processes. This entails looking beyond finance to what’s happening outside the organization to make planning ahead easier, as well as the ability to assess and manage not only financial but also enterprise-level risk, including IT and cyber risk, operational risk, supply chain risk, etc.
The challenges of the COVID-19 pandemic have taught companies that resilience and the ability to adapt to changing scenarios are key to staying afloat. Hence, the capacity to navigate uncertainty is probably another of the top skills needed by a CFO. This involves:
- Good planning skills and ability to think outside the box.
- Agile performance to stay on top of rapid and unexpected change and quickly update strategies accordingly.
- Readiness to research new tools to make finance processes more efficient, like our financial performance management software or a budget forecasting software.
Of course, there are many more skills to master, but these five must-haves are definitely part of the answer to what makes a good CFO in today’s evolving business climate.