GLOBAL SURVEY

Courtesy Ernst & Young

DISRUPTED CFO ROLES ON THE RISE

The role of the CFO is entering a period of disruptive uncertainty amid less clarity

The role of the Chief Financial Officer (CFO) is being disrupted in an unprecedented way. As a result, it is now more likely that the career development path to a senior finance role will flex and shift on the basis of variables that include market context, personal ambitions and expressed or implied expectations of key stakeholders in the process.

And CFOs are responding to these pressures in different ways.

Research undertaken by Ernst & Young (EY) reveals that it is increasingly difficult to decode the DNA of a finance leader because profiles and job descriptions are becoming more diverse. Roles vary depending on the disruptions CFOs and their organisations face, as well as their company, sector, geographical and personal strengths.

In this environment, perceptions of what makes a great CFO are more difficult to pin down, and the expectations of colleagues are shifting. Tomorrow’s CFO must bring a breadth of finance and non-finance experience, capabilities, new perspectives, know-how and a degree of creativity to the role.

MOBILE CAREER PATH The finance leader must define a more forward-looking and mobile career path that builds capabilities in key areas in addition to finance – such as operations, customer and commercial focus, business partnering, strategy and transformation.

These capabilities must be complemented by leadership qualities like the ability to inspire and motivate high-performing finance teams, leading change, shaping a dynamic culture and setting out a compelling vision that helps navigate change.

A leadership development plan is imperative for an aspiring leader, and it must encompass experiential and academic training, mentoring and managing change projects. And as organisations face a more connected, globalised and scrutinised future, tomorrow’s finance leaders must think strategically about the know-how and credentials they need to succeed in the future.

BUSINESS INFLUENCERS What experiences will they need? And what formative relationships do they need to cultivate with key influencers in the organisation?

A global survey by EY among finance leaders in large organisations suggests that 64 percent have ‘worked in more than one sector,’ while 53 percent have ‘significant experience working in different international environments’ and 43 percent have ‘significant business experience
gained in roles outside finance.’

Until recently, the steps that aspiring chief financial officers needed to take followed a relatively clear and linear path that had been trodden by many successful CFOs at major organisations as they rose through the ranks. But today, the CFO’s career path has been severely disrupted on all rungs of the ladder.

The emergence of shared services is executing many finance tasks and disrupting the training ground of many graduate finance executives. Robotics and process automation will continue to reduce opportunities for junior finance executives to gain experience in managing the fundamentals of finance. Secondments to shared services centres will become a common feature of the finance apprenticeship.

NEW TECH CHALLENGES And the midpoint of entry to a CFO role is being challenged with sophisticated technology, leading to changes in the skills of individuals at this level where the need is insight to derive more informed business decisions. Business partnering skills that include high emotional intelligence, influencing power and communication skills will become increasingly important.

The profile of a CFO will be varied in terms of experience and skills. It needs to be customised to the strategy, culture and maturity of the business and industry. In some organisations, non-traditional CFOs are being parachuted in over staff with finance backgrounds.

In some cases, operational skills are being prized over traditional finance know-how. Group financial controllers who might have once been the natural successors to the CFO now require a broad spectrum of non-finance skills to make the step or remain as the second in command.

EY asked finance leaders worldwide what skills and experiences would be important for high-performers to make the transition to the CFO role in the future. Strategy and commercial experience emerged as being key.

FLEXIBLE CAREER PATH So how do we replace the traditional linear career path with a more flexible one?

It involves gaining international exposure, building effective relationships (including the board), acquiring a breadth of finance experience (including M&A), leading finance transformation projects or other change management leadership roles, taking on business partnering roles, becoming involved in strategic planning, establishing operational roles with a customer or commercial focus, building experience across the value chain (including the front office, back office and suppliers) and securing secondments.

CFOs will continue to wield considerable influence across the organisation. Finance leaders will enjoy a high profile both internally and externally. And finance leadership will continue to be a route to the top of the organisation… including the CEO’s office. But it is also a role that’s becoming more demanding and challenging for incumbents.

The role of a CFO is entering a period of disruptive uncertainty and there is less clarity on how success will be defined in the future.