Increased leadership. Responsibility. Influence.
These terms have defined the ever-evolving role of the CFO in the past few years. Much has been written about the growing influence that chief financial officers now have within their companies, even outside of the finance departments, in every industry. But how and why did this evolution begin?
To understand this trend, we must consider the abrupt economic downturn in 2008, which affected many sectors. Aside from sharp declines, the economy remained morbidly sluggish for many months. In the midst of these struggles, CFOs were entrusted with strategy and crisis responsibilities. The downturn gave CFOs their introduction to more important managerial roles. The economic crisis suddenly showcased the importance and logic of having the CFO closely involved in strategic company decisions.
Meet Donna Carter, who has been working as a CFO for over two decades. When reflecting on her career in 1988, Carter suspects that up to 80% of her work duties were related directly to the traditional responsibilities of a financial officer. Now, however, Carter says that as little as 30% of her workday is spent covering those financial duties. In other words, CFOs are spending more time working in sync with executive management instead of simply heading the finance department.
But this change isn’t without its own challenges. Nearly two-thirds of CFOs recently surveyed couldn’t identify a predecessor that they could contact about an issue or for advice. In many ways, CFOs today are pioneers in their field, facing many situations, circumstances, and responsibilities that the CFOs before them never faced. It’s a growing process for both finance professionals and companies, but one that will certainly benefit both.
Most CFOs such as Donna Carter embrace the change, acknowledging that it’s career growth that has developed their skill set and sense of professionalism. “I love it,” says Carter. “The broader the role gets, the happier I am, because I like learning new things and doing new things, so the challenge is great.”
So what new skills are CFOs developing to handle this broadened role? The most common responses are:
- Time management. Aside from having to properly delegate time to perform all their duties, CFOs have to balance their work lives with their personal lives.
- Soft skills. Communicating, negotiating, and management are new skills beyond finance that CFOs are now learning to master and present.