- Author: Blake Beattie
- Posted: September 13, 2023
What World Class Strategy Execution Looks Like for CFOs
The Chief Financial Officer role has changed significantly over the past two decades. Focus has shifted from number crunching & financial reporting, to becoming a strategic partner to the CEO and a critical cog in the strategy execution wheel. Over the past 35 years, Quest Worldwide has had the opportunity of working with diverse leadership teams in over 70 countries. We’ve seen the good, the bad and everything in between regarding how businesses go about strategy execution. In many businesses, we’ve seen CFOs become the ‘go to’ strategy person and become integral partners in shaping and executing strategic initiatives.
So what is it that world class CFOs are doing differently in strategy execution?
Strategic Partnerships: CFOs of today work more closely with the executive leadership team in the development and execution of business strategy. They are involved in many of the broader business discussions related to marketplace, operations and people outcomes to go with their financial mandate. Integration of real time data analytics has enabled CFOs and their teams to add real value in strategic discussions. They can offer much better support in decision making within different functions, business units and teams.
Focus: 100 Watts of power can light up a room. 100 Watts put into a laser beam can cut through steel. The difference? Focused, directed power. CFO’s play an important role in ensuring the executive leadership team and direct reports are focused on the things that matter. Increasingly we are seeing CFOs playing a key role in maintaining focus on the priority goals through effective Scorecard reviews.
Data Driven Insights: The digital age has changed the way strategies are created. It has gifted CFOs data driven insights that are invaluable for informed strategic planning and execution. We have seen more CFOs utilising predictive analytics. Chat GPT and other generative AI platforms opens up more tools that can add value, when used effectively (avoiding any unintended consequences). According to a study by PwC, 79% of CFOs believe that data analytics is crucial for strategy formulation.
Risk Management & Scenario Planning: As custodians of financial governance, CFOs have always been responsible for risk management. However, the approach has shifted away from reactive, just in time fire-fighting. CFOs are now actively involved in scenario planning, assessing potential risks and developing mitigation strategies well in advance. This shift is not only essential for financial health but also for the successful execution of strategic initiatives. An Ernst & Young report highlights that 68% of CFOs consider risk management to be a vital aspect of their strategic responsibilities.
Alignment of Financial Objectives with Strategy: In the past, financial goals and strategic goals were often viewed separately. Today’s CFOs understand the critical need to align these objectives. By intertwining financial planning with strategic vision, CFOs can ensure that resources are allocated optimally to support the organization’s overarching goals. A survey conducted by the Australian Financial Review revealed that 82% of CFOs believe that their involvement in strategy development has enhanced their ability to allocate resources effectively.
While the expanded role of CFOs in strategy development and execution brings significant opportunities, it also presents challenges. CFOs need to balance their strategic responsibilities with the ongoing demands of financial stewardship. They must possess a versatile skill set that combines financial acumen with strategic thinking, leadership, and effective communication. They also need a capable, empowered team behind them as bandwidth can only be stretched so far. It makes sense that 82% of CFOs expect to hire or train people with skillsets that are different to the ones currently held by their employees (Deloitte).
The rapid pace of technological advancements requires CFOs to stay updated with the latest tools and trends. The emergence of artificial intelligence, blockchain, and automation are reshaping industries, and CFOs need to harness these technologies to drive value adding innovation within their organisations.
In summary, the role of CFOs in strategy development and execution has evolved into a dynamic and multifaceted responsibility. We have the privilege of working with many CFOs who have embraced this transformation, becoming strategic partners who drive growth, manage risks, and align financial objectives with overarching strategies. As CFOs continue to navigate this evolving terrain, their ability to blend financial expertise with strategic insight will remain instrumental in shaping the success of their organisations.
Author | Blake Beattie
Blake is a strategy execution consultant, facilitator, speaker and published author who is recognised as one of the next generation leaders of Australia (by the QLD premier at parliament house). For the past 12 years, he has worked with award-winning Quest Worldwide, helping executive teams develop and implement winning strategy for many large, complex business globally. He has several years’ experience sitting on boards as the Vice Chairperson of the Life Changing Experiences Foundation and as the NSW President of National Speakers Association of Australia. Blake is also the founder of international Pay it Forward Day, which has inspired over 10 million acts of kindness in more than 80 countries with over 100 state and city proclamations. His first book “Bullseye” is published by the largest non-fiction publisher in the world, was selected as part of the Times Lifestyle Series in India and was named by the Australian Institute of Management as one of the must-read books of the year. He is also a regular contributor to a number of leadership publications.
For more information visit – www.quest-worldwide.com