We Need To Talk About CFOs

Apparently few others really understand what the Chief Financial Officer (CFO) thinks is important. The most recent survey by McKinsey and Company on CFO’s reveals a range of issues relating to CFOs (read it here). While the whole article deals with a number of observations from the survey relating to the CFO and their roles, one in particular highlights how important it is for the key leaders of the organisation and the CFO to have a conversation to be on the same page.

The following table lists the top 10 activities the CFO believes they have engaged in which adds financial value to the organisation. Next to that is the ranking given to the same activity by other leaders in organisations:

Activity

CFO Ranking

Other Leaders Ranking

Performance management (e.g., metrics, value management, incentives/targets)

1

8

Strategic leadership

1

4

Traditional finance roles (e.g., accounting, controlling, planning and analysis)

3

1

Organisational transformation (enterprise-wide or within finance organisation)

3

7

Finance capabilities (e.g., finance-organisation talent pipeline)

5

9

Speciality finance roles (e.g., treasury, audit, investor relations)

5

3

Cost and productivity management across organisation

7

2

Support for digital capabilities and advanced analytics

8

10

M&A (including post-merger integration)

9

5

Capital allocation (e.g., capital-expenditure allocation)

10

6

Pricing of products and/or services

10

11

 

It is interesting that so much of what the CFOs think is important other leaders place less importance on. The risk with this is that the CFOs will be spending time on activities important to them, but not necessarily important to the rest of the business, potentially causing tension and issues between the leadership team and business units. It is important that leaders within an organisation have the conversation to ensure everyone agrees with what is important, and remain focused on those.

And Avondale Business School (ABS) can help you achieve this, and indeed with any aspect of your business. Simply contact us a ABS@avondale.edu.au or call on 02 49802168.

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