Just a few years ago growth at all costs was the flavor of the day, where cash was cheap, interest rates were low, and businesses could find capital relatively easily.
But now with the increased market volatility we’re seeing, finance leaders—including myself—are having very different conversations with their executive teams.
Now, we’re in the unique position of trying to balance growth and profitability, which means leaning into efficiency.
It’s our job in Finance to turn this into a reality for our businesses and help the rest of the organization figure out how we’re going to continue to grow with fewer resources, or by reallocating the way our resources are currently being spent.
Companies need to be able to depend on their finance teams to help them to make good, informed decisions with all this turbulence around us. And that means we need our finance teams to evolve.
The evolving scope of the finance team
Finance is uniquely positioned to bring value as a strategic business partner to other areas of the company: we have a bird’s-eye view of all kinds of things across the business that others don’t get to see.
We often take this for granted, but with this position comes a responsibility to shine a light on what we’re seeing to help connect the dots across the organization.
That’s why the future state of finance teams—and the role CFOs play in particular—needs to be cross-functional by design.
That means forging strong partnerships with functions such as:
- HR: This, to me, has become one of the most critical business partnerships that Finance has as we think about how to retool and redistribute our workforce around the skillsets we’re going to need for today and tomorrow.
- IT/Technology: Having Finance and IT operate in silos isn’t going to work. Enterprise IT strategies require understanding our processes from start to finish, knowing where our data is, and choosing transformation projects based on what’s going to truly move the needle for the business. And all this requires tight partnership between finance and IT teams.
- Customer Support: Teams like customer support and implementation get first-hand information from our customers about what they need from us, what’s working, and what’s not. Finance should be attuned to this to ensure we’re enabling the right decisions for the sake of our customers.
- ESG: As stewards of the business, Finance is responsible for ensuring the company is on top of its governance requirements. As ESG becomes a wider conversation, we need to consider how we’re managing the company’s environmental and social impact, and how this affects our key stakeholders, communities, customers, and employees.
- Sales and Revenue: Finance should be part of go-to-market planning, looking at data alongside sales and revenue teams to inform decisions around how we allocate investments, determine pricing, and align incentives with where the business needs to deliver.
- Operations: Working closely with Operations is how we in Finance will ensure we’re measuring the right KPIs and delivering the right reports and information to the right areas of the business.
In essence, the finance team of the future is far less siloed and far more integrated within the entire business.
The four traits of the finance leader of the future
For finance leaders, successfully connecting the dots for the rest of the business requires some critical traits that haven’t always been core to finance.
The American Institute of CPAs recently highlighted four traits for the finance leader of the future that I think hit the nail on the head.
These traits are:
- Being a connected influencer: How do we enable conversations with the people who are the experts in our business within their respective fields?
- Being an authentic disruptor: Are we challenging our business to question the status quo and not just do things as they’ve always been done?
- Being an inquisitive storyteller: How do we tell stories with our data in a way that helps others across the business understand it?
- Being a rational value creator: How are we knitting together data, technology, and processes to create value for the rest of the organization? Are we considering not just traditional finance KPIs, but also nontraditional metrics based on what we’re seeing across the business?
Creating capacity for Finance to lead the way
With Finance acting as the connector between the other functions of the business, there’s an opportunity for us to act not just as a passenger to business transformation but a leader in it.
But for finance teams to have the time to actively engage with the broader business and provide their strategic input, they need to be less bogged down by tactical work such as closing the books or building the budget.
That’s where technology investments play a critical role. FP&A software such as Vena allows finance teams to unlock capacity for more strategic work by streamlining critical processes like budgeting, forecasting, financial reporting, and financial close management. What’s more, Vena allows you to consolidate not just financial data but also operational data to support planning processes that involve multiple other departments such as workforce planning and sales performance management.
