The role of the CFO has not always been viewed as a business-enabling position, simply because it so often requires the unglamorous work of budget-setting and financial risk analysis. And yet, with the right process improvements, technological integrations and mentality, the CFO can become a driver of superior business performance. If you’re a CFO, it’s time to think about how to move past the traditional remit of your role – and become a strategic authority and key player in your business’ growth.
Taking less responsibility
Taking less responsibility may seem like a counterintuitive way of becoming an authority, but one of the benefits of holding a considerable amount of power is being able to release it – to shift the decision-making responsibilities onto department heads and senior managers.
The job then becomes less a matter of saying ‘yes’ or ‘no’ to spending requests and more about trusting your colleagues to make sensible, responsible decisions. And that’s probably for the best. A member of the C-Suite is often too high-level to know whether that new member of staff or that new software subscription represents value for money.
If the sales director requires an extra salesperson, they should possess the authority to hire one. If a piece of software will enable the marketing team to reach new audiences, the marketing director should be able to freely allocate part of the marketing budget to this.
Involving the CFO in this decision-making process is unnecessary. In fact, it may even be harmful. CFOs are unlikely to possess the required subject matter knowledge to make informed decisions – as a result of this, they will often go for the least risky option, which can hamper business development. Accordingly, you can benefit from offloading these decisions to budget-holders – it’ll give you more time and more resources to put towards strategically useful activity.
This doesn’t have to mean allowing your senior staff to spend freely, unchecked. The right technology will allow you to view company finances in real-time and keep a track on spending, which also has the effect of making each budget holder accountable. However, if you can’t trust your senior staff enough to make these decisions, they shouldn’t be senior staff. Take less responsibility for them and take more time to focus on your own team.
A new CFO for a new era
The COO and CTO are roles that have grown in status and significance, and it’s time the finance function is given the same opportunity to evolve.
If the finance department is to meet its potential, it will need attention and resources. This will doubtless involve a number of initiatives and substantial consultation with your colleagues, but it will also involve allocating the finance team a budget – which CFOs are often reluctant to do, both because it’s perceived as self-interested, and because it’s another cost that many consider optional.
But no department can thrive without the necessary resources, and you shouldn’t be afraid to spend money on the tools you need to flourish. Technology can be particularly worthwhile: with the right investment, you can benefit from greater productivity, fewer errors, and superior insights. With data-gathering tools, you can gain full visibility into the company’s financial status at any time – enabling you to make the more complex financial decisions that you can’t necessarily delegate, from a position of greater knowledge and understanding.
Such considerations become even more important if your business is thriving. Fast-growing businesses are likely to have seen an increase in money leaving and entering the company. This often leads to pressure on the finance team – and when the pressure is on, mistakes can be made. Having an eagle eye view of company finances allows CFOs to make the correct financial decision on time, every time.
The most successful CFOs realise that keeping a tight-lid on spending in the finance department is the wrong approach. Companies are happy to pour money into sales and marketing tools, and finance should be no different. If the finance team relies on outdated methods, business efficiency and growth will be impacted.
Finance is at its best when it facilitates other parts of the business. To do so, it should embrace a more strategic and collaborative attitude – one that moves away from micro-level decisions about hiring and spending, towards big-picture financial strategy and decision-making.
The finance department of a business may never drive direct profit, but it can certainly enable it – so long as it is performing efficiently. With Brexit looming – and potentially bringing several changes to the country’s regulatory, commercial, and recruitment environments – the CFO who can find creative ways of boosting profit and minimising waste will be worth their weight in gold.
Automate the parts of your job that don’t require your input; share responsibility with those experienced and senior enough to handle it; and above all, think about how you can help your company achieve its goals.