In “The CFO of the Future – Part One” article, we introduced the upward trend of transfer operating responsibilities of a departing COO to the existing CFO. In this article, we take a closer look at how the evolving CFO position combines both competencies.
The Chief Financial Officer Role Re-Envisioned
The CFO of yesterday provided financial oversight and management by looking backwards to report a company’s reliable, timely, historical financial information.
Today’s CFO looks forward, identifies problems and opportunities swiftly, and brings long-term value to an organization.
As defined by the AICPA, the CFO of the future is “someone who offers the kind of multifaceted high-end skills that organizations can use to achieve their strategic financial goals and drive innovation.”
Progressive Change for CFOs: The Chief Future Officer
In the past, the COO would manage the daily operations of the company and the CFO would handle all the financial aspects, but rarely did the two align.
The profile of the modern CFO has evolved in the past decade to establish a bridge between operations and finance by
- Serving the business strategically
- Modernizing finance with high-quality, transparent financial information about the company’s performance
- Developing competitive differentiation
- Performing operational functions such as customer centric business models, manufacturing, supply chain, procurement, and information technology
- Collaborating to steer the organization from intent to results
- Making decisions that promote growth
- Preparing the company to adapt to an unknowable future
- Ensuring a healthy bottom-line
As technology and global opportunities expand, “CEOs understand that the overall risk to the company will be diminished if the CFO has some direct involvement” in operations, says Jonathan Schiff, advisor to large corporations and a professor at Fairleigh Dickinson University. This means that it’s no longer just about the numbers for the chief of finance.
By the way, Highbeam.com states that more than 60 percent of Fortune 500 companies no longer have a COO. This may lead us to believe that the COO is an endangered species, yet the position may not disappear altogether. Technology companies that are highly regulated, such as pharmaceuticals and life sciences, require COOs with specialized degrees and skill sets; globalization may require a COO with international operations experience, particularly in Asia; high tech companies that specialize in computers or software can benefit from both a COO and a CFO as the COO may possess more of the high level technological skills required.
Preparing for the Future with the Expertise of a Part Time CFO
The CFO Connection is a diverse group of members who have served as CEOs, COOs and CFOs in a wide range of industries. Our combined expertise and capabilities make us uniquely qualified as CFOs of the Future, or as we like to say, Chief Future Officers.
We help organizations uncover and capitalize on opportunities for the future. Contact us for a complimentary assessment to find out how we can do this with you.