How CFOs can be architects of change to influence innovation

The Chief Financial Officer has traditionally been seen as the gatekeeper of financial prudence. However, this crucial role is undergoing a significant transformation and is increasingly being seen instead as an architect of change and a catalyst for innovation. This shift requires CFOs to adopt a more holistic and strategic approach to achieve organisational success, combining their financial expertise with a deep understanding of operations, technology, and market dynamics.

CFOs tend to have a reputation for being primarily concerned with cost control and risk management and, as such, can be seen as inhibitors of change. While this is still a crucial part of the CFO’s role, it’s an outdated perception that overlooks the potential for CFOs to drive transformation and influence innovation within their organisations. CFOs can support the modernisation of business processes and the implementation of new technologies that enhance efficiency and competitiveness by championing change. There are four ways CFOs can achieve this.

Move beyond ‘the finance voice’

CFOs must move beyond their traditional roles and immerse themselves in the operational aspects of the business to effect change and success. By doing this, CFOs gain a comprehensive understanding of the unique challenges different departments face, as well as the potential impact of investments on overall business performance. For instance, visiting data centres and engaging with operational teams can give CFOs valuable insights into the practical implications of capital expenditures. This doesn’t mean that CFOs need to become experts in business operations; however, this hands-on approach enhances their credibility while fostering a collaborative environment where financial decisions are aligned with operational needs more closely.

Additionally, as organisations increasingly harness the power of generative artificial intelligence (GenAI) and AI-driven insights, it’s crucial for CFOs to balance their technology adoption with human intuition and experience. Engaging directly with teams provides nuanced understandings from across the business and market more broadly that AI cannot replicate, ensuring decisions are well-rounded and genuinely value-adding.

Embrace the team’s strengths

The majority of organisations (81 per cent) identify attracting and retaining talent as one of their top business priorities for the next 12 months.1 However, the right talent can be even more valuable to a business when their unique skills are recognised and used effectively. One of the key attributes of a successful CFO is to identify their team’s strengths and use them to the business’s advantage. Encouraging innovation within the finance team, and across the organisation more broadly, can lead to the development of new ideas and processes that drive business growth. There’s a lot of truth in Henry Ford’s notion that doing what has always been done will always yield the same results. CFOs can tap into their team’s collective creativity through innovation challenges and other initiatives to uncover new, creative solutions that may not have been identified through traditional, top-down approaches. Recognising and promoting emerging talents within the team further reinforces a culture of innovation and continuous improvement. Encouraging team members to leverage their unique strengths and perspectives also ensures that the organisation benefits from the irreplaceable value of human creativity and judgement.

Use business indicators effectively

The CFO is no stranger to key performance indicators (KPIs) and key business metrics, and effective use of such business indicators is a crucial aspect of the CFO’s role; yet just 56 per cent of finance teams are prepared to use business insights for decision-making.2 It’s also critical in championing change. Clear and measurable indicators provide a framework for evaluating the success of various initiatives and driving accountability across the organisation. However, it is important that these indicators are not solely finance centric. Involving senior leadership teams in developing and tracking business indicators creates a sense of ownership and collaboration, linking performance metrics to broader business objectives more effectively. This approach shares the responsibility for achieving targets across the organisation instead of confining it to the finance department.

Promote collaboration

Collaboration has become a hallmark of modern organisations and the benefits are palpable. Hybrid and remote work created opportunities for colleagues across functions and regions to collaborate more closely despite their physical distance, driving innovation. Engaging with peers in other regions or departments lets CFOs share best practices, gain new perspectives, and identify opportunities for improvement across the business. This collaborative approach helps in overcoming the silo mentality that hinders innovation and lets organisations benefit from diverse insights and experiences instead. For example, discussing sales targets and commission structures with counterparts in different markets can lead to the development of more effective and tailored strategies that reflect each market’s unique characteristics. Human interaction and relationship-building is paramount, and CFOs should prioritise fostering strong interpersonal connections and trust within their teams to achieve sustained success.

While the CFO’s role is changing, the perception of the CFO as an innovation blocker persists in some organisations. CFOs must demonstrate the tangible benefits of their initiatives and communicate the value of investments in new technologies and processes to overcome this challenge. Presenting a clear financial rationale and highlighting how specific investments will enhance operational efficiency, customer satisfaction, and overall business performance are essential.

A CFO that embraces their role as an architect of change recognises that success is a collective effort, and that failure should not be attributed to any one function or department solely. CFOs can champion change by adopting a partnership approach and working together with other departments to address challenges and drive positive outcomes. This collaborative mindset is not dissimilar to how human resources (HR) or marketing managers have evolved to support their respective functions by providing strategic guidance and aligning their efforts with overall business objectives.

CFOs must embrace the opportunity to no longer be confined to financial stewardship alone. CFOs can influence valuable innovation and drive impactful transformation within their organisations as architects of change. While the journey from traditional financial management to becoming a catalyst for innovation requires a shift in mindset, the rewards for both the CFO and the organisation are substantial.

Author – Tim Reddoch, Finance Director | Logicalis Australia