Opportunities to collaborate in small groups are among the few ways finance leaders can answer questions in a low-stakes environment outside their organization and get answers from peers. Organizations like the CFO Alliance offer these opportunities and host events across the United States that focus on bringing together CFOs and their peers.
In Q2 2024, the CFO Alliance founder Nick Araco Jr. and his team traveled across the U.S., meeting with members of their network and driving conversations around the CFO role. Their latest Q2 report makes it clear that technology’s impact on finance is continuing to reshape the CFO function, but a “fight” over whose data is correct has ensued.
The newest addition to the trifecta of the CFO relationship
As Araco Jr. describes, the CFO’s relationship is part of a trifecta of leadership. The CEO and CFO will always be there, and that third seat is always rotating. In the past, it may have been the chief people officer or human resources officer during times like the COVID-19 pandemic, but now, according to Araco Jr., that seat is being filled by finance and adjacent leadership.
“The third seat in the trifecta is now the chief revenue officer or chief sales officer because of the amount of enterprise around revenue,” he said. “Lots of companies set very aggressive growth goals for 2024, and now we are seeing some tension, and it’s developing in the data.”
There’s a bit of a battle between the chief revenue officer or chief sales officer and the CFO about budgeting, forecasting and actual performance, leaving CEOs stuck in the middle. This makes things difficult for CFOs who are working with a growth-oriented CEO driven by sales and data.
Araco Jr. says this has developed into a great source of tension because many companies and their investors are making decisions based on projected revenue plans. “There’s a fight about whose data is right, whose forecast was right and what to do about it when there are discrepancies in data.”
The importance of data visualization
To portray their data as correct and make it actionable across the company, conversations at CFO Alliance events indicate that data visualization has become a “way of life” for CFOs.
“CFOs have to be confident that there is a central source of truth, and they have to be able to ensure that through data that is actionable and capturable in real-time,” said Araco Jr. According to him, there are three big opportunities around data visualization, and mastering this benefits the finance function and the organization alike.
- Mastering the complexity of the tech stack. As tech stacks have become “increasingly complex, intertwined and intervened,” eliminating ambiguity around the “central source of truth” using proper data visualization can help CFOs and their teams make decisions based on good information while also reducing friction between revenue/sales and finance.
- Process reengineering. CFOs have expressed a desire to develop a “documented, systematic approach to redesigning and redeployment of skills before taking on a new technology.” How to proactively prepare employees whose labor may be impacted or supplemented by AI is increasingly important for CFOs, and being able to see and share that data across the organization is increasingly valuable.
- Change management. Resistance to change was a hot topic of conversation when it came to challenges around technology implementation across the country. “CFOs are seeing a resistance to change; there’s this overall sense that finance teams can’t believe they are being asked to change how things are being done,” he said. According to him, many CFOs feel as if their teams aren’t satisfied with the technology or the implementation process around it.
Networking post-pandemic
As the events and networking industry’s COVID-19 pandemic-induced lull seems to be a thing of the past, Araco Jr. says the future of how CFOs will connect could be in small groups. According to him, “micro-events” are the trendiest style of get-together in the CFO world right now and appear to be growing in popularity.
“Nowadays, you can’t just look at a room full of CFOs and tell them to talk about budgeting and forecasting — you’ll hear either crickets or chaos,” he said. “We also don’t want to bring someone to explain to our community things they already know like mechanics and budgeting. We focus on creating an environment where members can share stories, fresh approaches and use these as mental stimulants for ideas.”
The oldest millennials are now in CFO seats, and this is something we’ve noticed in particular that they desire,” he continued. “These CFOs want to know what they aren’t seeing that they should be. They want to be better, faster, smarter and be a bit of a futurist. Many have had coaches, therapists and mentors throughout their career, and what they are looking for is a community, and we try to drive that idea and put our members at the center of that dialogue.”
