One useful approach to seeing how significantly the chief financial officer’s role must change over the next decade is to weigh the questions finance leaders should be asking today—but often are not.
A traditional CFO might ask, “How can we reduce costs?” By contrast, a strong CFO today is more likely to ask, “Which costs should we remove to fund growth and innovation?” Although the second question is likely to lead to a more successful outcome than the first, even that is not good enough. Increasingly, the question needs to become more elemental and even consequential: “Which activities should be automated, outsourced, or eliminated entirely?”
The same kind of progression applies to other aspects of the CFO role:
“Are we meeting budget?” becomes “Are we creating value versus plan?” and ultimately “Should we fundamentally change the way we operate?”
“What is next year’s capital budget?” turns into “How do we optimize allocation across the current portfolio?” and then “How quickly can we reallocate capital as market conditions change?”
Many CFOs are still asking the initial conventional questions and are operating with a definition of their role that is already falling at least one generation behind. Instead, CFOs should be determining how to best respond to the many changes that may be directly impacting their company’s business model:
CFOs who remain primarily focused on controlling costs, allocating annual budgets, and reporting results after the fact risk rendering their companies slower to redirect capital, capture the value of new technologies, and respond to market shifts. Reporting, controls, compliance, treasury, and financial planning remain indispensable, but they are no longer enough. Today, CFOs need to help resolve how the business deploys capital, technology, talent, and risk—and they must continually reassess those choices.
The raised expectations of boards and investors compound these challenges. These stakeholders increasingly want CFOs not only to explain past performance but to articulate how the company will create value amid AI disruption, market volatility, and geopolitical uncertainty—and how emerging technologies and strategic investments will change the economics of the business. In an uncertain environment, building confidence in the company’s future may become as important as reporting its past results.
Simply put, by 2030, leading CFOs will not merely measure their company’s performance but also increasingly help determine it.
By Jody Foldesy, Henning Streubel, Tom Casey, Julien Ghesquieres, and Edoardo Palmisani
Source: bcg.com
I’ve written before about how good leaders give effective feedback when the stakes are high. That article articulates a method for structuring feedback to ensure you effectively deliver the content of your message so that it can be heard and so that it can actually help change behavior going forward.
Important decisions benefit from genuinely different perspectives. The job is not to eliminate bias, which is impossible, nor is it necessarily to reach consensus. Too much consensus can produce what I sometimes call ‘consenseless’: a conclusion sufficiently diluted for everyone to accept and no one particularly to believe.
There is a significant risk in continuing to develop leaders for yesterday’s role. Leaders who are given more interpersonal responsibilities without the tools, time, or space to carry it will burn out. Organisations will lose talented people, and others will look at the role and decide they do not want it.
