In the past, CFOs were seen as the “bean counters” of a company—responsible for crunching numbers and managing money. However, times have changed, and the role of a CFO is no longer just about managing cash flow. It also includes forging customer relationships, motivating and nurturing talent, and being at the forefront of innovation. Let’s explore why this evolution has happened and how it has made a positive impact on businesses.
Traits of a Great CFO
As the world of business evolves, we are seeing businesses demand from their CFOs, who have a lifespan second on to that of a CEO. In fact, at many businesses CFOs have effectively replaced the need for a COO altogether, leading many to believe that CFOs need to have a skillset far greater than they did, say, 20 years ago. For example, they must be:
- Puzzle Solvers
- Forward Thinkers
- Effective Motivators & Leaders
- Shapers — visionaries who can see the big picture and minute details. But why has the landscape changed?
The Growing Complexity of Businesses
It is no secret that businesses are becoming increasingly complex. As technology advances, markets become more competitive, and consumer behaviors evolve, companies need to shift their strategies accordingly or risk being left behind. A traditional financial manager can no longer keep up with these changes without taking on additional responsibilities. That’s why CFOs are now expected to understand customer relationships and lead strategic shifts in addition to managing money.
Leading Strategic Shifts
A good CFO must identify potential opportunities for growth within an organization by understanding its current market position and analyzing data-driven insights. They must also be able to make informed decisions that will help move the company forward while staying within budget constraints. This requires an understanding of not just financial data but also customer behavior data so that they can better anticipate future market trends. As such, the role of a CFO has shifted from simply managing money to leading strategic shifts in an organization’s business model.
Hiring & Retaining Talent
In addition to leading strategic shifts, modern-day CFOs are responsible for hiring and retaining talent—something that was traditionally handled by human resources departments. By understanding both financial trends as well as human insights into what motivates people to join or stay at an organization, CFOs can help ensure that their organizations attract top talent while keeping employee retention rates high. This is especially important in a competitive job market where employers need to stand out from the crowd if they want to gain an edge over their competitors in terms of talent acquisition and retention.
As you can see, the role of the CFO has changed significantly over time due to advances in technology and changes in consumer behavior patterns. Today’s CFO must understand not only financial data but also customer relationships, lead strategic shifts in business models, hire top talent, and retain key employees—all while staying within budget constraints! By embracing this new reality and adapting accordingly, businesses have been able to gain a competitive edge over their rivals in terms of growth potential and profitability.