There are a number of misconceptions about the CFO role, but the digital transformation has dramatically changed the types of skills CFOs must bring to their organizations. CFOs are now expected to drive operations, strategy, and IT, or face being left behind or replaced. To compete in today’s marketplace, financial executives need to focus their efforts beyond the stereotypes and develop the skills necessary to be seen as versatile, technologically savvy, and innovative leaders.
CFOs are often thought of as meticulous people with a limited impact on their organization as a whole. In reality, CFOs are now expected to bring a broad range of skills and fresh ideas to their roles. Speaking about the demands being placed on the modern CFO, Henner Schliebs, vice president and global head of Finance Audience Marketing at SAP, explains, “I think the general mindset of a CFO is not what a lot of people that are not familiar with the business think. It’s not this pencil-pusher anymore, sitting over their screen and reading through paper spreadsheets and the like. They’re driving the business.”
And the requirement for new skills and perspectives is encouraging many individuals without finance degrees to step into senior financial roles. Thack Brown, general manager and global head of Line-of-Business Finance at SAP, says, “The other day I met a CFO of a fast-growing company who came from McKinsey. Never had done finance in his life.”
We hear this more frequently: the former communications, marketing, or operations professional moving into senior-level finance roles. Brown attributes this shift to several factors, starting with the strategic thinking aspect that’s required of present-day financial executives and a broader recognition of the CFO’s evolving role.
“I took a handful of accounting courses in university and that was it,” he says. “At the end of the day, I have a brilliant accountant and a great audit firm. And I have the technology. I rely on those pillars to make sure my books are closed correctly. It opens the door for new profiles in finance.”
“The question is: what’s easier?” Schliebs notes. “To have a finance guy and transform him or her into a business person, or is it the other way round? I think this is happening in all functional areas. Take a chief human resources officer, for example. Their team knows about the labor laws and the country, and they have software that has it embedded. No longer do you have to be an HR-educated person to be a CHRO.”
Similar to the misconception that CFOs are primarily bean counters, many believe CFOs are married to archaic bookkeeping and “control freaks” with their accounting processes. In reality, a strategic CFO embraces tools and platforms that minimize error and automate financial processes for their teams.
Schliebs explains, “With new technologies and solutions, it’s not only what you have within the four walls of your organization. You also connect to your environment, with the business network. You have full visibility into your whole value chain. And this is what enables an executive in general, but specifically the CFO, to drive the business.
“It’s no longer ‘How did we perform last year?’ It’s, ‘Here’s where we are going to go in the next three years,’ because he or she foresees the results for their organization.”
The third common stereotype is the fearful, cautious CFO unwilling to take risks. This is not a fair assessment of many CFOs today. “I find CFOs to be a lot less risk-averse on average than most people think. They are risk-conscious, but they’re willing to take a risk if they see a commensurate payout,” Brown says. “All of these new technology capabilities are coming along, and CFOs are suddenly realizing, ‘wait a minute, this completely changes the way we work.’ But rather than viewing it as a risk, they’re viewing it as a way to get rid of all of these painful processes or elements of the business that they’ve had to deal with for so long.”
While these stereotypes can create challenges for financial executives competing for positions, new tools and changing expectations highlight the opportunities available to financial leaders able to move beyond traditional functions. Effective financial leaders must be able to support their organizations with strategic thinking and to embrace financial technologies that automate routine functions while enabling a stronger understanding of organizational risks and opportunities.
This article originally appeared in Financial Executives International Daily. It is republished with permission.