Growth Strategy: A CFO’s Perspective

By Jack Perkins, founder at CFO Hub, which provides on-demand CFO, controller, accounting and HR services.

As technology and business customs have changed, the role of the modern CFO has transitioned from money manager to financial growth leader. These developments require that the CFO’s focus and strategies also change. Let’s explore these changes and how they create opportunities for CFOs to add more value to a business’s growth strategy.

The Digital Revolution

AI is currently the focal point of the tech discussion. And as new machine learning algorithms are powering the release of new AI tools every day, it is easy to see why. While some are concerned that AI will take people’s jobs, the savvy CFO utilizes these technologies to improve efficiency and gain insights.

Traditionally, a CFO would focus on ensuring internal company compliance through managing profit and loss statements, balance sheets and tax returns. While these reactive elements are still essential to a CFO’s role, greater importance is placed on proactively strategizing through financial forecasting.

Predictive AI makes this process easier and more accessible to everyone. This technology can quickly analyze large historical datasets, identify patterns and trends, and offer predictions.

Sustainability And Ethics

Investors increasingly use a company’s ESG rating to determine where they spend their money. This deals with environmental, social and governance concerns. What is considered necessary in these categories is constantly changing as cultures shift their focus. A CFO must pay attention to this moving landscape to ensure the company remains well-placed to receive investment.

While being up-to-date and well-informed about trends in ESG is important, fundamentally remaining true to the company’s own ethics and culture is crucial. Just as the CEO embodies the company brand and culture, so must the CFO. Financial decisions should, first and foremost, align with the company’s own clear and consistent messaging. You shouldn’t compromise the company’s fundamental values for a temporary ESG trend that may harm your bottom line in the long run.

Previously, a CFO would only consider the financial bottom line. Now, they must embody the company’s values and make financial decisions based not only on short-term profit but also on the long-term positive impact they want to make on society.

Collaborative Synergy

Just as the CFO must understand and internalize the company’s values, they must also ensure that every other department head understands their impact on the company’s finances.

This cross-department understanding allows for more informed and transparent decision-making within the C-suite. It turns a combative boardroom where each department competes for resources into one where everyone understands their role in working toward a common goal.

I’ve found that when the head of each department fully acknowledges how their efforts impact other areas of the business, a collaborative effort helps drive company growth with much less friction.

Beyond Numbers: The Human Element

Analysis and forecasting for the modern CFO do not stop at costs and revenue. Tangible financial data remains crucial, but a CFO must look past tangible factors impacting these bottom-line numbers. This means looking at more qualitative data detailing human perceptions and motivations. And you need to perform these analyses on both your workforce and your customers.

Understanding employee motivation and satisfaction is primarily the job of HR. While this remains true, it is also imperative that the CFO sees the value in allocating resources to foster a culture that allows people to grow. Modern attitudes no longer see employee wellness programs as a cost but rather an investment in productivity.

When making financial forecasts, your output will only be as good as your input, even if you use predictive AI. This means you must include all factors contributing to a particular outcome. As we’ve discussed, cultural shifts and people’s perceptions quickly change. The marketing department may conduct this research, but the CFO must use this customer research as a factor when forecasting future trends and demand.

Taking A Holistic Approach

The common theme throughout the factors discussed is that the CFO must think holistically when planning the growth strategy. CFOs must strategize in the context of a changing social and technological environment. They must stop compartmentalizing decisions and give each department head the knowledge to empathetically collaborate with other department leaders, working together toward sustainable growth.