From the earliest of entrepreneurs to the largest of today’s global corporations, significant time and resources have been invested in the development of financial management expertise and capabilities – an investment best represented by the Chief Financial Officer or CFO, the executive at the helm of the finance department. Today, finance is, perhaps, the most established field within business; and yet, it is has become one of business’ most dynamic, complex, and innovative areas. It is this specific contrast – being a very traditional function that requires progressive management – that has driven the transformation efforts of many CFOs in recent times.
The CFO: From CPA to CEO (in-Waiting)
Not so long ago, the path to becoming a Chief Financial Officer began with an undergraduate degree in accounting and the pursuit of a public accounting certification. After an early career in public accounting that culminated in a rise to the Manager or Senior Manager level, the accountant would move to a Controller or Assistant Controller position at a client organization. Once inside an enterprise, a very successful track record and an aggressive push was required to ascend to the role of CFO. On the finance and accounting career track, becoming a CFO was the ultimate, and often final, stop. And, while this may still be the plan and track for some current and aspiring CFOs, the business world has dramatically changed in recent decades resulting in the need to expand and transform the CFO role.
For example, globalization of the financial markets has increased the competition for capital between different enterprises, which in turn, has increased the urgency to create shareholder value, while minimizing risk and assuring good corporate governance. The CFO has emerged, in many instances, as the executive best-equipped to shape and communicate the enterprise’s strategic vision and clearly link it to overall performance results.
With an ability to objectively evaluate financial performance by region, business unit, or product line, the CFO has become more involved in setting business strategy instead of setting business controls and more involved in overseeing the overall business instead of only overseeing its numbers. What this means, in sum, is that the duties of a modern CFO now straddle the traditional areas of financial stewardship and the more progressive areas of strategic and business leadership with direct responsibility and oversight of operations (which often includes procurement) expanding exponentially. This significant role-based transformation, which is well underway, is best-evidenced by the “CEO-in-Waiting” status that many CFOs now hold.
Final Thoughts
In business, our experience and job role help form our perspectives. And, from these perspectives, most decisions are made. For the modern CFO, his or her financial background, business acumen, strategic vision, and holistic view of the enterprise form the foundation of an aspiring CEO. Although they may have started as “number crunchers” and “book keepers,” CFOs are best equipped to take the lead as the business leader with a perspective that rivals the Chief Procurement Officer (CPO) in breadth and depth. CFOs (as well as CPOs) are the ones to watch in any organization.
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