Strength in financial core competencies is no longer enough for CFOs. In the future, the role of the CFO will be a fully collaborative one, with finance being just one part of a long list of skills that include leadership, decision-making, and a solid working knowledge of the latest technology trends affecting decision-making.
A global survey of finance executives conducted by SAP in partnership with Oxford Economics found that the high-performing minority (11.5%) stood out for their strong skills in collaboration. Most CFOs collaborate with other departments on governance, risk management, and compliance (GRC) out of necessity. But these leaders took it one step further, collaborating on marketing, customer service, and sales with their respective departments—breaking out of the traditional silo that finance occupies in so many businesses.
At the other end of the spectrum, almost half the companies surveyed that had experienced zero or negative revenue in the last 12 months cited isolation between departments as one of the core reasons behind their business’s poor performance.
Businesses and CFOs with poor collaboration are missing out on one of the greatest strengths of their finance department: the huge value provided by the data they collect. Data-driven decision-making is key to making the correct strategic choices, and businesses that constrict the benefits of financial insights to the finance department are at a significant competitive disadvantage.
Three ways finance leaders can act more collaboratively
Clearly, collaboration is becoming increasingly essential for CFOs, but how can finance leaders boost their ability to positively influence other areas of the business? Let’s take a look at three areas of opportunity:
1. Take advantage of the latest technological innovations
The next wave of technology will have a multiplicative effect on the ability of the finance function to impact other areas of the business. Technologies such as artificial intelligence, machine learning, and Big Data analysis will allow for better insights into financial data and free CFOs to focus on strategic analysis and adding value.
The aspiring collaborative financial officer should embrace new technologies, such as digital assistants, and the efficiency gains they provide. For example, Howdy, a Slack bot, can be trained to automatically collect status updates from team members and collate them in a report, saving a manager from having to perform this function manually. In the future, CFOs will rely on digital assistants to perform a wide range of administrative tasks, including managing employees, booking meetings, and doing data analysis.
2. Cultivate leadership and other soft skills
Technical financial expertise is essential, but the collaborative financial officer will require many other skills. Leadership, communication, and diplomacy are all needed to enable collaboration, and CFOs must improve themselves in these areas.
Additionally, CFOs must work with HR to train existing finance teams in these skills so they can work with other functions more effectively. These skills should also be highlighted when hiring new team members.
3. Empower the entire finance function to collaborate
A collaborative CFO is good, but what businesses need is a collaborative finance function. CFOs must empower their teams to support all other functions with their expertise, including areas that finance rarely gets involved with, such as marketing.
To get started, CFOs should calculate where finance can add the biggest value. When other departments see the performance boost collaboration can provide, you won’t need to seek them out. They’ll come to you.
Learn how organizations are gaining instant financial insights and using them to make better decisions—both now and in the future. Register now for the 2017 Financial Excellence Forum, Oct. 10-11 in New York City.