The CFO’s job description just keeps getting longer. Along with managing profit margins, modern CFOs must understand—and be able to influence—all the factors that affect their companies’ financial health.
“There’s been an evolution in America in terms of the CFO,” Paul Mandell, CEO and co-founder of the executive conference organization the Consero Group, told Forbes. “The CFO is increasingly being called upon to weigh in on much more strategic decisions involving the company, including everything from transactions to providing assessments of emerging markets and analyses that go far beyond looking at the books and determining whether there will be enough cash to support investment.”
CEOs expect their financial leaders to be tech-savvy trendspotters, informing business strategy with targeted insights, all while keeping operational budgets on track. But while CFOs want to think more strategically, they’re also feeling the strain. According to a 2016 EY Survey, 51% of CFOs said they can’t focus on strategic priorities because of increasing operational responsibilities.
The good news? There are ways to tackle both strategy and operations at once. Here are three tools to help CFOs focus on the big picture without losing sight of key details.
Tool #1: Strategic success measures
CFOs once relied primarily on balance sheets and income statements to get a sense of how their companies were performing. Today, technology has given business leaders access to a whole new array of nonfinancial benchmarks they can use to measure success. According to Adaptive Insights’ CFO Indicator Report Q3 2016, 76% of CFOs said their teams are tracking nonfinancial key performance indicators (KPIs).
But to make the most of this data, CFOs must track the metrics that will efficiently deliver the most value. That means looking for easy-to-measure KPIs that feed directly into the company’s bottom line. Marketing metrics, such as social media engagement or email opens, and HR data, including employee retention, can give CFOs the insights they need to influence smart, strategic changes.
Tool #2: Fresh data
Tech disruption keeps shaking up the status quo. And CFOs know companies that can quickly—and effectively—adopt innovation are more likely to outpace the competition. According to the EY survey, 58% of financial leaders say they need to build their understanding of digital, smart technologies, and sophisticated data analytics in order to drive better business results.
In the past, CFOs managed a more traditional set of systems focused on payroll, billing, and budgeting. But finance departments must now work closely with IT to update legacy systems and make sure that the most valuable nonfinancial metrics can be tracked. Speaking regularly with the company’s tech experts can also help you stay up-to-date on what’s being used the field—while also helping the IT team gain a more sophisticated understanding of the company’s data needs.
Tool #3: Training and delegation
No executive can lead a company alone. For CFOs to consistently think strategically, other finance team members must be able to take on the tasks they leave behind. That might mean training team members to fill key skills gaps. According to the EY report, 52% of CFOs say they can’t focus on strategic priorities because of a lack of necessary skills in the finance team.
Making time for big-picture thinking also requires asking other departments to provide the relevant data and insights needed to inform the company’s strategy. Get other team on board with providing nonfinancial KPIs by involving them in the strategic process. Work with them to identify what information they can provide and set clear expectations around who will provide what information, and how frequently those reports are required.
By looking at the big picture, CFOs can play a significant role in helping point their companies in the right direction. They just need a little help—and a lot of data—to get there.