Accenture recently released research on the current challenges facing chief financial officers (CFOs), revealing that CFOs are confronted with business transforming decisions and many feel as though they are met with significantly more responsibility than those in the past.
Accenture’s report, ‘The Paradox of Choice for CFOs,’ found that 93% of CFOs feel as though they have greater responsibility today than in the past, and that 9 out of 10 CFOs make critical decisions that impact the entire company.
To discuss the results of the study and the evolving role of CFO, Finextra spoke with Jason Dess, Accenture’s global lead for CFO and enterprise value.
Over 100 CFOs based in Australia, Brazil, France, Germany, Italy, Japan, Singapore, Spain, Switzerland, the UK, and US participated in the study, taking input from an array of industries including banking, capital markets, chemical, communications and media, consumer goods and services, insurance, technology, retail, software platforms, oil and gas, travel and hospitality, utilities, and others.
Dess explains that the “paradox of choice” that current CFOs are facing refers to “the increasing complexity of business and the necessity for leaders to make quick decisions.” Expanding on this point, Dess places CFOs as a centre-point in an interconnected space which includes a volume of options and transformational decisions.
“CFOs are at the centre of a quandry: how do they make decisions without being overwhelmed by the available options and weigh of their decisions? As they grow more comfortable making decisions in this environment, they will begin to see that cross-enterprise visibility and analytics give them an advantage over their C-suite partners. They can connect the dots in ways their peers cannot, allowing them to make more informed decisions that affect entire organisations.”
Due to the digital transformation of the financial industry, CFOs’ decisions have become more critical across the board. The study indicates that 68% of CFOs are pursuing multiple transformation initiatives simultaneously, and 86% agree that the speed of strategic decision-making has increased. The leading types of transformation that participating CFOs are focusing on are sustainability, workforce and workplace development, and digital transformation.
The report indicates that the role of the CFO has evolved over the past few decades, citing an example of a retail CFO who spends half their time on transformation initiatives and the other half focusing on growing talent to drive the business forward.
Looking at the weight placed on modern CFOs’ shoulders, it brings into question whether the responsibilities can be delegated to other areas and if the role of CFO can be reconstructed. Dess agrees that many companies are redefining the position of CFO.
“I’ve certainly seen the role of the CFO drastically change in my twenty-five plus years of experience in the finance transformation and operations industry. The transformation challenge is real. 68% of CFOs confirm that their organisation are working through three or more transformation initiatives in parallel and two-thirds feel paralysed at times by the number of decisions and volume of choices they need to make.”
Dess concludes that the responsibilities that CFOs have today has the potential to shift the trajectory of the entire company, which causes them to face an increasing amount of pressure to manage their company’s brand, performance, innovations, revenue streams, and financial health.
Commenting on how CFOs should react to their new responsibilities, Dess recommends that they “be introspective.” He adds that CFOs should focus on empowering their teams and maintaining balance while ensuring that they have the capabilities to delegate tasks. He emphasises the focus on measurable results and revising set goals based on the evolving context of the market, the company, and its stakeholders.
Looking to the future, Dess states: “CFOs have been at the forefront of dealing with four major disruptive trends across the last few years – Covid-19, supply chain challenges, high inflation and geo-political instability. Each challenge has impacted businesses in a significant way, with the level of impact varying by industry. We see challenges continuing to be relevant over the next 12-18 months.”
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