The idea of leading a private equity firm’s portfolio company can seem attractive to many experienced CFOs. In some cases, this may involve reviving ailing companies. In many instances, however, the CFO will be controlling costs and improving operations.
Now more than ever, it is the role of the CFO to be technically focused, commercially driven and agile in their decision making.
As CEOs look to create a high-performing senior leadership team, they see the biggest value being the strategic insight of their CFO and they view this relationship as being fundamental to the success of the business.
According to the McKinsey Digital Transformation Report 2020, digital tech in the health and social world has sped up by 7 years due to the Covid-19 pandemic. Such digital transformation has allowed finance chiefs to deliver far more strategic input to the business. The most sought-after CFOs have a collaborative and can-do attitude in supporting activities to create the conditions for success whilst understanding how value can be created within the business.
The emphasis on a CFO’s strategy, leadership and influencing skills are being sought alongside their traditional technical ability in finance, which in many cases are taken as read. The CFO has a broader role to play across the business where performance is now being measured against people, profit and purpose and this is where technology has provided up to date commercial insight to ensure agility in decision making.
It is an exciting time for CFOs and we see them focusing more on the following:
- Stakeholder and investor management, rather than pure reporting and safeguarding
- Business strategy formation, validation and execution
- Growth optimisation rather than historic-based cost control
- Measurement and commentary on all aspects of the strategic directives of the organisation
- Forward insight rather than retrospective reporting
As a concluding comment, in order to maximise their input into the strategy, it is imperative that the CFO has well-honed interpersonal skills and world-class internal collaboration so as to drive change at all levels across the business – something many do not associate traditionally with the CFO.