Beyond the Numbers – More Than Ever, CFOs Need a Strategic Mindset
I don’t think anyone would doubt the importance of the CFO role (or at least I hope they wouldn’t!). But what many don’t understand is the magnitude of this role’s transformation over the past several years. It’s not just about financials. And it’s much more than tracking and compliance, as some may have thought. At the base of this transformation is an increased emphasis on having a strategic mindset.
Organizations are facing unprecedented challenges in supply chains, labor supplies, and overall skills gaps that must be rectified, or at least minimized, at every level and in every department. CFOs are plagued with the continued uncertainty these challenges bring, as they attempt to align the organization’s current and projected finances with the organization’s growth goals and strategies.
So, how can CFOs exceed expectations and sustain organizational growth? What separates the good ones from the great ones, especially in light of today’s challenges? What are the successful CFOs doing differently? Simply, they have the required financial acumen and leadership skills of most, but also a strong, developed strategic mindset.
Strategic Mindsets Lead to Success
CFOs look at the drivers of business growth to deliver both short-term financial gains and sustain long-term organizational growth. But to be successful at both requires a strategic mindset. In a recent Forbes article, a strategic mindset is listed as one of the top attributes of successful CFOs. “A strategic CFO understands that success tomorrow depends on creating the right financial structure today. The right person will work alongside the CEO to create a viable financial plan that will carry the business through future growth stages. This includes thinking several steps ahead to minimize risk.”
With a strategic mindset, CFOs often consider these types of questions:
- How much cash do we need on hand at any given time?
- How much should we have in reserves?
- Where can we reduce costs?
- What actions should we take to increase revenue? Short-term? Long-term?
- Are our financial processes ready to scale? If not, what do we need to do so they are?
- At what point will we be able to position ourselves for a merger or acquisition?
Seeing beyond the numbers to both the opportunities and risks that can only be found “in between the lines,” a successful CFO becomes a trusted strategic business advisor to the CEO. And a strong relationship between the two helps the financial and operational strategies stay aligned. “Strategic leadership from the CFO’s office in these scenarios can keep the company moving forward. When the chemistry between the CEO and CFO is right, their unique leadership traits will sharpen each other and work in tandem to get the best possible results for the company.”
As with much else in life, this comes down to strong relationships. Without the ability to communicate and collaborate effectively with others, a strategic mindset alone will never move the needle. We are at a time where everything in business is seemingly connected. Leaders can no longer operate in silos—there is simply too much at stake.
For example, the CFO should take that same strategic mindset to collaborate with the Chief Information Officer with respect to technological advances and data, with the Human Resources Director to manage the organization’s culture and employee experience, and the COO to decide where the most effective operational investments can be found. In this way, CFOs are about entirely more than the financials. In fact, they are the drivers of organizational transformation.
Barker Associates provides strategic guidance and outsourced CFO services to companies of all sizes. We can provide the higher level of strategy your company needs to grow. If you need assistance, or have any other questions, please click here to schedule a 30-minute consultation at a rate of $100.