By now, almost all of us are aware that our roles as CFOs are changing—something I discussed in one of my earlier blogs, The “Thinner,” More Focused CFO. In the wake of digital disruption, many of us are now orchestrating specialist components of the finance department rather than focusing on pure accounting and cash collection.
A 2016 global Ernst & Young study found that 47% of CFOs say their current function does not have the right mix of capabilities to meet its future priorities. As the finance department pivots from a traditional reporting function focused on balancing the books and moves to becoming a data-driven decision center, skills requirements are also being redefined in the shakeup.
A digitally disrupted business requires a digitally fluent finance team. Obviously, some CFOs may be further ahead on the journey than others, and in some cases, customers, partners, and suppliers may be driving this change. But as CFO, it’s up to you to ensure your team remains competent in their skill sets and business acumen to support the increasingly broader remit that lies ahead.
So what exactly is the impact of these changes on your finance team? Do you know what skills and competencies you will require from your team members in both the short and longer term? And if you could create your very own finance “dream team,” what would it look like? You may not know it yet, but modern CFOs have just as much of an HR challenge as a business challenge.
While technology will play an increasingly significant role in executing many traditional finance tasks and delivering greater insight (think analytics, automation, cloud, blockchain, et al.), finance people will spend much more of their time than ever before working with colleagues across the organization to help make decisions and support the strategy.
It’s this area that I’d like you to think about strategically, as without the right skill sets, you won’t get the most out of your technology investments. It’s important to combine the smart technology platforms and tools with the digital fluency, interpersonal skills, and analytical capabilities of your team.
Depending on your industry and pace of change, your own “dream team” may look somewhat different from that of your peers, but we can draw some broad conclusions. For example, the same EY study found that 57% of CFOs said building skills in predictive and prescriptive analytics is critical for the future.
And this is where your HR challenge comes in. Chances are, you don’t have enough of these skills in your current team. It’s a common problem, as it’s a relatively new requirement that almost all finance departments will face. Likewise, 67% of CFOs believe that improving the partnership between finance and the business is a major priority. Again, the types of interpersonal skills required to achieve this have not traditionally been a baseline competency for finance.
For many of us, the question is not so much whether such skills are required, as I believe that will very quickly become self-evident. The real question, is how to find them. These two key competencies – a proficiency in analytics and collaborative, interpersonal people skills – will be in high demand (they already are). So take stock of your internal teams now. Decide who and what can be nurtured and developed in-house, and what external requirements and skills you need to recruit into the organization. By anticipating and planning for these two core competencies, you can “de-risk” the changes ahead and better respond to the wider demands of the business.
Change is now accelerated at a digital speed and will inevitably overtake you if you don’t keep in step. The clear and present danger to a business is that its long-term survival will ultimately get disrupted by technology if it doesn’t adapt. The same can be said for the CFO.
For more insight on building your financial dream team, see What Your Finance Team Can Learn From Millennials.