Navigating Challenges As New CFO
It is no surprise that the past few years have represented a continued scaling-up of the CFO’s role from history-focused gatekeepers to company strategists, partnering with business to drive future performance, and define a path for profitability and sustainable growth. Newly appointed CFOs are expected to ascend beyond functional leadership and serve as companywide catalysts. It goes without saying that new CFOs would need to navigate disruptions from multiple angles and have a vision and ability to drive organisation to deliver value by utilising the opportunities presented by these disruptions. There are four key challenges that need to be navigated as a new CFO.
First on the list would be ‘Time’. Today, the role of CFO faces never-ending pressure to cut costs, grow revenue, and ensure control. Economic uncertainty, increased regulatory requirements, financial restatements and increased investor scrutiny have led to crushing new demands. New CFOs would need to treat time as their most valuable asset. It’s important to understand and list priorities. Charting a focused 180-day plan with defined, measureable outcomes for strategic and other priorities has proven to help leaders manage their responsibilities. For each identified priority, identify support from different stakeholders. It is equally important to identify risks that might prevent CFOs from meeting defined goals and planning mitigation of such risks.
Great talent not only makes one look good but helps one make the most of their time. Often, a new executive's biggest regret is not moving fast enough on their talent challenges and opportunities. This brings us to the second challenge area – ‘Talent’. Our studies show fifty-nine per cent of CFOs considered securing and retaining key talent as their top internal risk. Adapting an existing team to new leadership can be challenging due to ingrained norms and potential resistance to change. Successful navigation requires balancing innovation while respecting the team's experience. New CFOs must rapidly assess the talent of the current team. It is crucial for their success to address key skill gaps and elevate performance standards, crucial for strategic changes.
Third on the list would be ‘Managing Relationships’. Time and again, it has been observed that executives who didn’t make time to cultivate critical relationships later found those people become stumbling blocks for them. It is of utmost importance for new CFOs to identify who their most important stakeholders are (CEO, CIO, Business Leaders, Finance teams, etc.) and how they will communicate with them. Listing influential stakeholder relationships along with mapping the extent of support available from each of them helps new CFOs identify where they need to spend more effort and plan accordingly.
Last but just as important a challenge to navigate would be ‘Technology’. As much as this seems like a lift from a work of fiction, finance is getting ready at an exponential momentum towards a future of unbelievable digital dexterity. The forces of technology are upending the traditional ways to closing books, paying vendors, and planning for tax exposures, in an increasingly cyberinsecure world. In these transformative times, new CFOs and their financial organisations must adapt and enhance their systems and structures to fortify their readiness for objectives that lie ahead.
The role of a CFO is complex and demanding. Some new CFOs step into crisis situations, while others join stable companies. Some are taking on the role for the first time, while others have experienced multiple CFO transitions. Clearly, there is no one formula for assuming the reins as a new CFO. Our perspectives are rooted in past experience, numerous CFO surveys, and our comprehension of the CFO role. We believe the above insights would empower new Chief Future Officers to make a meaningful impact.
Nandita is a Valuation Specialist, based in Mumbai, with over 28 years of professional experience. Currently, she is Partner, CFO Program Leader at Deloitte India
