The office and the role of the Chief Financial Officer continues to evolve.
This evolution may cause apprehension in some seasoned CFOs. These experienced financial executives feel this way because, in part, they have worked very hard to get to where they are. They believe that their past experience and success should speak to their future opportunities.
Yet for any executive, especially one in the finance side of the business, resting on your laurels is so 1980s.
The world is changing at a rapid pace, and the business world is either leading this change or trying hard to stay ahead. Organizations that do not continue to stay relevant wither up and disappear into obscurity. Ditto for CFOs.
Cindy Kraft, a CFO career coach, works with CFOs who want to stay ahead of the curve in their career. I like her work, and am always happy to refer senior finance executives to her. As a fellow blogger, she and I agree most of the time. In recent posts (here and here) she discusses technology and its relevance to CFO careers.
The statistics from Cindy’s questions on whether technology should be in the domain of Finance is interesting. I believe the results would be more telling if there was corresponding information on company size. From my experience, companies of a smaller size have CFOs responsible for IT, while larger companies have an executive in charge of Technology.
From my vantage point, CFOs who are able to stay ahead of the changes in the business world, including technology, are able to continue to stay relevant and add value.
So why does Analytics matter to the CFO?
In my book, Guide to CFO Success, I ask and answer “What is a Chief Financial Officer?” in the first chapter (you can preview a copy of Chapter One here). To summarize, I say that a CFO is a Strategist, Leader and Advisor.
Corporate value comes from making great decisions. Decisions based on analysis rather than gut is where Finance and the CFO have the ability to make a difference at the executive table. Technology is just a tool that helps intelligent people make great decisions.
CFOs need to be a Strategists, Leaders and Advisors to their businesses. If a CFO is not helping the company make decisions and adding value to the organization, they are not a Strategist, not a Leader and not an Advisor. In essence, they are not a real CFO.
To continue to be a real Chief Financial Officer today, you need to be able to help your organization make the best decisions possible.
The term Big Data has been bandied about as the cure-all for corporations. Technology vendors are very happy to use the term to get attention and their portion of corporate spending. But data itself is not enough, no matter how big the data is.
The Data Value Chain illustrates that data is only the beginning. It is the usable information that is pulled from this data, viewed through the lens of intelligence, either human or artificial (or both), that wisdom can be obtained.
As CFO, it is your duty to provide wisdom to your organization. This wisdom will lead to the creation of corporate value. Analytics is the point where you turn all that data into valuable decisions.
If you’re not providing the wisdom you would like (or think that you should) to the rest of the business, understand why that is.
Is it because…
- You do not have the tools?
- You do not have the people? Or,
- You do not know where to start?
As CFO, no one expects you to be intimately aware of the available tools and be able to analyse this yourself. However, as CFO, you are only as good as your finance team allows you to be.
As CFO, no one expects you to choose the right analytical tools by yourself. As CFO, no one expects you alone to do the analysis necessary to come to great decisions. However, as CFO, you need to make sure your team can support you in this value added activity. As CFO, understand the power of these tools and information yourself of what they can do. Then you need to guide, lead and develop the team necessary to do so.
I had the pleasure of meeting RK Paleru at the AICPA CFO Conference last May. RK is the Analytics guru (Executive Director, Systems Analytics and Insights Group) to the CFO at George Washington University.
RK blogged about an article I shared with him about the idea of companies hiring a Chief Analytics Officer. While I do not think that most companies are ready to create another seat at the executive table, I do think that Analytics can add tremendous value to the executive table. I am certain that the CFO of GWU thinks that the analytics that RK does bring tremendous value to the CFO, as well as adding significant value to the institution and its mission.
Anders Liu-Lindberg wrote recently about his take on Analytics within the finance function. Anders, from where he sits in his role as Regional Finance Business Partner at Maersk Line, sees corporate value ONLY IF the talent team is built properly within finance is able to partner with the generalist functions. Finance should act as a true business partner to the business, helping make decisions at all levels of the business.
CFOs who do not continue to improve, change and learn will, as mentioned earlier, wither. Resting on laurels is career limiting.
If, as CFO, your response to “Analytics” is “Analytics, Shmanalytics”, you’re not only missing the boat, you’re doing a disservice to your employer and your team.
To remain CFO, both today and tomorrow, both within your company and at your next employer, understand the power of Analytics. Then, ensure you develop and nurture a finance team that can give you the wisdom to help your company make great decisions.
[…] Dergel, Executive Search Consultant and author of “Guide To CFO Success” posted a story proposing a new name added to the executive table – Chief Analytics Officer or CAO and stating […]