Increasingly, CFOs are leading strategy conversations and driving financial decisions within the business. They have a unique perspective to provide insights and perspectives that are crucial to the success of broader corporate strategy initiatives. This has led to a shift in the finance function, from the traditional gatekeeper of the bottom line to orchestrator of growth and strategic vision.
According to Aleksey Krylov, an experienced CFO, the best finance leaders possess a deep understanding of the impact of their decision-making on the company’s overall direction. They have the ability to bridge commercial, operational and financial considerations when developing forecasts, scenario models and strategies to help businesses navigate uncertainty and unforeseen challenges. They are also well-versed in integrating financial data into a unified platform and have a proven track record of creating and managing financial processes that improve the effectiveness of the organization as a whole.
One of the most important roles a CFO can play is to be a voice of reason, helping other senior executives understand the real costs of decisions and how those costs might be mitigated. For example, launching a new product or relocating a plant can involve substantial upfront investment in marketing and equipment. Similarly, the cost of refocusing or spinning out divisions can be high. An experienced CFO can provide an understanding of these costs and make recommendations to the CEO based on the best use of resources to achieve the desired outcome.
They also possess a keen sense of how the market is changing, both in terms of customer needs and competitive pressures. This helps them identify potential opportunities for top-line growth and profit improvement, bringing a broader perspective to the commercial and operations teams when exploring these ideas.
A CFO can also be a great source of creative ideas to help shape the strategy, drawing on their experience across different industries and companies. They can provide a fresh perspective that is often missed by those who think about products day in and day out. As a result, it’s important for the finance team to create a space where these types of ideas can be generated and explored, rather than shut down at the first sign of inconvenient or risky financial implications.
While a strategic mindset is essential for finance leaders, they must be able to balance their own fiscal ambitions with the business’s mission-driven objectives. As a result, they need to be able to develop robust plans and forecasts (see strategic planning) that can help the organization navigate uncertainty, ensuring profitability coexists harmoniously with the company’s higher purpose. By combining their analytical prowess with cross-functional alignment and technology, CFOs can lead the way to sustainable, profitable and resilient business outcomes.